News and Posts

Are you wondering whether alternative energy technologies can help you manage energy costs in your business? If so, there’s a valuable federal income tax benefit (the business energy credit) that applies to the acquisition of many types of alternative energy property. The credit is intended primarily for business users of alternative energy (other energy tax breaks apply if you use alternative energy in your home [...]

Owners of incorporated businesses know that there’s a tax advantage to taking money out of a C corporation as compensation rather than as dividends. The reason: A corporation can deduct the salaries and bonuses that it pays executives, but not dividend payments. Thus, if funds are paid as dividends, they’re taxed twice, once to the corporation and once to the recipient. Money paid out as [...]

The May 17 deadline for filing your 2020 individual tax return is coming up soon. It’s important to file and pay your tax return on time to avoid penalties imposed by the IRS. Here are the basic rules. Failure to pay Separate penalties apply for failing to pay and failing to file. The failure-to-pay penalty is 1/2% for each month (or partial month) the payment [...]

In recent months, there have been a number of tax changes that may affect your individual tax bill. Many of these changes were enacted to help mitigate the financial damage caused by COVID-19. Here are two changes that may result in tax savings for you on your 2020 or 2021 tax returns. The 2020 return is due on May 17, 2021 (because the IRS extended [...]

If your company is planning to merge with or buy another business, your attention is probably on conducting due diligence and negotiating deal terms. But you also should address the post-closing financial reporting requirements for the transaction. If not, it may lead to disappointing financial results, restatements and potential lawsuits after the dust settles. Here’s guidance on how to correctly account for M&A transactions under [...]

Taxpayers who skirt tax rules could be banned by the IRS from claiming certain tax credits, according to the National Taxpayer Advocate (NTA). These taxpayers could lose the ability to claim: the Earned Income Tax Credit, the Child Tax Credit, the American Opportunity Tax Credit and the credit for other dependents. Most taxpayers act responsibly and some make simple errors. But if the IRS finds [...]

Cybersecurity challenges continue at the IRS, according to a Government Accountability Office (GAO) report. The GAO noted that, in May 2019, they’d given the IRS eight recommendations for tightening cybersecurity, and the IRS agreed with them. But a more recent look showed “inaction” on six of those issues, including having a comprehensive cybersecurity strategy and protection of sensitive data. Third-party vendors, the GAO stated, should [...]

In April 13 testimony before the U.S. Senate Finance Committee, IRS Commissioner Charles Rettig said that he believes the annual “tax gap” may total $1 trillion annually. The tax gap is the difference between taxes owed the U.S. government and taxes paid. He noted that this amount was more than double the $441 billion amount that the IRS believed to be the gap from 2011 [...]

Not-for-profit organizations are different from for-profit businesses in many vital ways. One of the most crucial differences is that under Section 501(c)(3), Sec. 501(c)(7) and other provisions, nonprofits are tax-exempt. But your tax-exempt status is fragile. If you don’t follow the rules laid out in IRS Publication 557, Tax-Exempt Status for Your Organization, the IRS could revoke it. Be particularly alert to the following common [...]

The housing market in many parts of the country is strong this spring. If you’re buying or selling a home, you should know how to determine your “basis.” How it works You can claim an itemized deduction on your tax return for real estate taxes and home mortgage interest. Most other home ownership costs can’t be deducted currently. However, these costs may increase your home’s [...]

In December 2020, Richard Jones stepped up as chairman of the Financial Accounting Standards Board (FASB). After meeting with stakeholders in early 2021, Jones identified a list of high-priority projects that he plans to tackle under his leadership. Big picture The FASB is responsible for creating and updating U.S. Generally Accepted Accounting Principles (GAAP), the rules that many domestic businesses use to report their financial [...]

Spouses filing a joint federal income tax return generally are both liable for the tax owed. But those who qualify may seek “innocent spouse relief” from joint liability. In one case, the ex-wife of an attorney-turned-physician was denied this relief relating to tax returns filed for 2008-2010. She signed the returns and said she assumed the taxes were paid. The 11th Circuit Court of Appeals [...]

More than $1.3 billion in unclaimed tax refunds from 2017 are waiting at the IRS, but they won’t be available much longer. Taxpayers generally have a three-year window to claim tax refunds, and for 2017 that window slams shut on May 17th. The IRS estimates that 1.3 million taxpayers are owed refunds, but they haven’t yet filed their Form 1040s for 2017. The midpoint for [...]

Are you thinking about setting up a retirement plan for yourself and your employees, but you’re worried about the financial commitment and administrative burdens involved in providing a traditional pension plan? Two options to consider are a “simplified employee pension” (SEP) or a “savings incentive match plan for employees” (SIMPLE). SEPs are intended as an alternative to “qualified” retirement plans, particularly for small businesses. The [...]