File cash transaction reports for your business — on paper or electronically

Does your business receive large amounts of cash or cash equivalents? You may be required to submit forms to the IRS to report these transactions. Filing requirements Each person engaged in a trade or business who, in the course of operating, receives more than $10,000 in cash in one transaction, or in two or more related transactions, must file Form 8300. Any transactions conducted in a 24-hour period [...]

By |2020-08-05T08:44:27-04:00August 5th, 2020|CPA-Blog|Comments Off on File cash transaction reports for your business — on paper or electronically

The tax implications of employer-provided life insurance

Does your employer provide you with group term life insurance? If so, and if the coverage is higher than $50,000, this employee benefit may create undesirable income tax consequences for you. “Phantom income” The first $50,000 of group term life insurance coverage that your employer provides is excluded from taxable income and doesn’t add anything to your income tax bill. But the employer-paid cost of group term coverage [...]

By |2020-08-05T08:44:12-04:00August 5th, 2020|CPA-Blog|Comments Off on The tax implications of employer-provided life insurance

Why do partners sometimes report more income on tax returns than they receive in cash?

If you’re a partner in a business, you may have come across a situation that gave you pause. In a given year, you may be taxed on more partnership income than was distributed to you from the partnership in which you’re a partner. Why is this? The answer lies in the way partnerships and partners are taxed. Unlike regular corporations, partnerships aren’t subject to income tax. Instead, each [...]

By |2020-07-28T17:09:28-04:00July 28th, 2020|CPA-Blog|Comments Off on Why do partners sometimes report more income on tax returns than they receive in cash?

Are scholarships tax-free or taxable?

COVID-19 is changing the landscape for many schools this fall. But many children and young adults are going back, even if it’s just for online learning, and some parents will be facing tuition bills. If your child has been awarded a scholarship, that’s cause for celebration! But be aware that there may be tax implications. Scholarships (and fellowships) are generally tax-free for students at elementary, middle and high [...]

By |2020-07-28T17:08:41-04:00July 28th, 2020|CPA-Blog|Comments Off on Are scholarships tax-free or taxable?

Take advantage of a “stepped-up basis” when you inherit property

If you’re planning your estate, or you’ve recently inherited assets, you may be unsure of the “cost” (or “basis”) for tax purposes. Fair market value rules Under the fair market value basis rules (also known as the “step-up and step-down” rules), an heir receives a basis in inherited property equal to its date-of-death value. So, for example, if your grandfather bought ABC Corp. stock in 1935 for $500 [...]

By |2020-07-21T09:59:15-04:00July 21st, 2020|CPA-Blog|Comments Off on Take advantage of a “stepped-up basis” when you inherit property

Even if no money changes hands, bartering is a taxable transaction

During the COVID-19 pandemic, many small businesses are strapped for cash. They may find it beneficial to barter for goods and services instead of paying cash for them. If your business gets involved in bartering, remember that the fair market value of goods that you receive in bartering is taxable income. And if you exchange services with another business, the transaction results in taxable income for both parties. [...]

By |2020-07-21T08:38:23-04:00July 21st, 2020|CPA-Blog|Comments Off on Even if no money changes hands, bartering is a taxable transaction

Business charitable contribution rules have changed under the CARES Act

In light of the novel coronavirus (COVID-19) pandemic, many businesses are interested in donating to charity. In order to incentivize charitable giving, the Coronavirus Aid, Relief and Economic Security (CARES) Act made some liberalizations to the rules governing charitable deductions. Here are two changes that affect businesses: The limit on charitable deductions for corporations has increased. Before the CARES Act, the total charitable deduction that a corporation could [...]

By |2020-07-14T18:00:43-04:00July 14th, 2020|CPA-Blog|Comments Off on Business charitable contribution rules have changed under the CARES Act

A nonworking spouse can still have an IRA

It’s often difficult for married couples to save as much as they need for retirement when one spouse doesn’t work outside the home — perhaps so that spouse can take care of children or elderly parents. In general, an IRA contribution is allowed only if a taxpayer has compensation. However, an exception involves a “spousal” IRA. It allows a contribution to be made for a nonworking spouse. Under [...]

By |2020-07-14T18:00:31-04:00July 14th, 2020|CPA-Blog|Comments Off on A nonworking spouse can still have an IRA

Steer clear of the Trust Fund Recovery Penalty

If you own or manage a business with employees, you may be at risk for a severe tax penalty. It’s called the “Trust Fund Recovery Penalty” because it applies to the Social Security and income taxes required to be withheld by a business from its employees’ wages. Because the taxes are considered property of the government, the employer holds them in “trust” on the government’s behalf until they’re [...]

By |2020-07-07T14:19:53-04:00July 7th, 2020|CPA-Blog|Comments Off on Steer clear of the Trust Fund Recovery Penalty

After you file your tax return: 3 issues to consider

The tax filing deadline for 2019 tax returns has been extended until July 15 this year, due to the COVID-19 pandemic. After your 2019 tax return has been successfully filed with the IRS, there may still be some issues to bear in mind. Here are three considerations. 1. Some tax records can now be thrown away You should keep tax records related to your return for as long [...]

By |2020-07-07T14:19:31-04:00July 7th, 2020|CPA-Blog|Comments Off on After you file your tax return: 3 issues to consider
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