Have employees who receive tips? Here are the tax implications

Many businesses in certain industries employ individuals who receive tips as part of their compensation. These businesses include restaurants, hotels and salons. Tip definition Tips are optional payments that customers make to employees who perform services. They can be cash or noncash. Cash tips include those received directly from customers, electronically paid tips distributed to […]

AICPA recommends changes to tax code

The American Institute of Certified Public Accountants (AICPA) is recommending more than 60 changes to the current tax code. In a recent letter to the chairs and ranking members of the Senate Finance and House Ways and Means Committees, the AICPA raised “noncontroversial” issues that its members believe should be addressed in the interest of […]

Billionaire minimum tax proposed

President Biden renewed a proposal during the Feb. 7 State of the Union address to impose a 20% minimum tax on billionaires. In a typical year, the average billionaire pays only 8% in taxes, according to a White House fact sheet. This minimum tax would help ensure that the wealthiest Americans don’t pay a tax […]

Answers to your questions about 2023 limits on individual taxes

Many people are more concerned about their 2022 tax bills right now than they are about their 2023 tax situations. That’s understandable because your 2022 individual tax return is due to be filed in 10 weeks (unless you file an extension). However, it’s a good time to familiarize yourself with tax amounts that may have […]

President Biden proposes quadrupling tax on stock buybacks

In the Feb. 7 State of the Union address, President Biden called for quadrupling the tax on corporate stock buybacks. Critics say that such buybacks enable corporations to funnel tax-advantaged payments to wealthy investors instead of paying taxable dividends to shareholders. In August 2022, an excise tax on corporate stock buybacks was enacted that was […]

CBO brief on the US Tax gap

Tax experts from the Congressional Budget Office (CBO) conducted a briefing for officials from the Brazilian Tax and Customs Administration that focused on the U.S. “tax gap.” The gross tax gap generally is defined as the difference between estimated “true” tax liability for a given period and the amount of tax that’s actually paid on […]

Common accounting pitfalls for startups to avoid

Accounting is a critical element when launching a successful business venture. Unfortunately, it’s also an area where startups tend to make mistakes. Here are some common (and avoidable) errors that entrepreneurs should watch out for. Failing to track expenses Starting a new business is exciting — and it’s natural to focus on generating revenue and […]

IRS issues propsed Service Industry Tip Compliance Agreement

The IRS has issued a proposed revenue procedure that would establish the Service Industry Tip Compliance Agreement (SITCA) program. The SITCA program would be a voluntary tip reporting program between the IRS and service industry employers (excluding gaming industry employers) with at least one business location operating a “covered establishment.” Generally, a covered establishment is […]

Do you work for tips?

Do you work for tips? Like most income, tips in the service industry are taxable. This includes tips paid directly to you by customers, tips paid by credit, debit or gift cards and tips split with other employees. Noncash tips such as passes or tickets are also taxable. If you receive tips, the IRS advises […]

Test your knowledge about the electric vehicle tax credit