Debt Bill passes

On May 31, the U.S. House of Representatives passed a bill to suspend the debt ceiling through Jan. 1, 2025. The Fiscal Responsibility Act will limit non-defense federal spending, and according to the Congressional Budget Office, would reduce federal budget deficits by $1.5 trillion over the next 10 years. Among other provisions, the bill will […]

Student Loan Debt

Tax relief may be available for student loan debtors, but only if they meet income requirements. Individuals with qualified student loans can deduct on their federal income tax return up to $2,500 of interest annually if their modified adjusted gross income is $75,000 or less ($155,000 for married couples filing jointly). If they earn more, […]

Can we simplify the tax code?

The American Institute of CPAs (AICPA) believes the U.S. tax code should be simpler, much simpler. In a letter to the IRS, the AICPA urged the agency and U.S. Treasury Dept. to “continue pursuing tax simplification.” Among the suggestions supplied by the AICPA were safe harbor alternatives; clear and consistent definitions and simple, general rules; […]

Do you maintain your tax-exempt status?

Under Section 501(c)(3) of the tax code, an organization can be exempt from federal income tax if it’s operated exclusively for charitable, religious, scientific or other qualified purposes. In one case, a coffee shop/restaurant was operated as a tax-exempt organization. It was granted a tax exemption to provide training and employment opportunities for certain individuals. […]

IRS renewing efforts to alert businesses of misleading ERC claims

The IRS is renewing its efforts to alert business owners of misleading claims involving Employee Retention Credits (ERCs). Indeed, there continues to be a barrage of broadcast advertising, direct mail solicitations and online promotions about ERCs. “Aggressive promoters are wildly misrepresenting and exaggerating who can qualify for the credits,” the IRS said. In response, the […]

Income matching on your tax return

The IRS electronically matches the information you report on your tax return with what’s reported by others on documents such as W-2s and 1099s. If there are discrepancies, your return may be flagged for closer scrutiny by the IRS. When we prepare your return, be sure to tell us about all income, even if you […]

Report criticizes Nonprofit hospitals

Nonprofit hospitals are exempt from paying federal tax if they meet certain requirements. These include providing free or discounted care and operating community health education activities. In a recent report, self-described nonpartisan think tank the Lown Institute found that more than 1,350 nonprofit hospitals didn’t meet the requirements. “Americans desperately need hospitals to use their […]

Estimated Tax Payment due soon

You’re required to pay taxes as you earn or receive income during the year, either through withholding or by making estimated tax payments. For estimated tax purposes, there are four payment periods. The due date for 2023’s next quarterly payment is Thursday, June 15. (The first payment was due April 18, and the last two […]

Is your passport at risk?

If you have seriously delinquent tax debt (SDTD), it could put your passport at risk, unless an exception applies. In 2023, SDTD is an unpaid federal tax debt of more than $59,000. So long as the IRS first follows certain procedures, the U.S. State Dept. generally can deny, revoke or limit the passport of someone […]

Changes in Interest Expense deduction limits

Before 2022, businesses could deduct 30% of their earnings before interest, tax, depreciation, and amortization (EBITDA). Currently, they’re required to calculate their interest expense deductions based on the more stringent earnings before interest and taxes (EBIT) standard. Businesses affected by the change are estimated to see, on average, close to a threefold increase in their […]