Insights
When does a hobby become taxable?
Do you have a hobby that pays the bills? During the uncertainty of the last year and a half, many people have turned a hobby into a source of income. If so, that income must be reported on tax returns. Deductions & Reporting The extent to which you can deduct expenses related to the activity…
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Employee Retention Credit Summary
2020 Highlights: An employer becomes eligible if they: can demonstrate a 50% or more decline in gross receipts in any quarter of 2020, compared to the same quarter in 2019 eligibility ends the last day of the first subsequent quarter when gross receipts return to at least 80% compared to the same quarter in 2019…
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Farm Use Valuation
The reporting period for Farm Use Valuation is open from July 1, 2021, until September 1, 2021. Each year the reporting period runs July 1st through September 1st. You may file this report electronically or as a paper copy. You might receive a pre-printed copy from your County Assessors’ office if you filed in 2020.…
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The long and short of succession planning
For many business owners, putting together a succession plan may seem like an overwhelming task. It might even seem unnecessary for those who are relatively young and have no intention of giving up ownership anytime soon. But if the past year or so has taught us anything, it’s that anything can happen. Owners who’ve built…
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Tax-favored ways to build up a college fund
If you’re a parent with a college-bound child, you may be concerned about being able to fund future tuition and other higher education costs. You want to take maximum advantage of tax benefits to minimize your expenses. Here are some possible options. Savings bonds Series EE U.S. savings bonds offer two tax-saving opportunities for eligible…
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Plan ahead for the 3.8% Net Investment Income Tax
High-income taxpayers face a 3.8% net investment income tax (NIIT) that’s imposed in addition to regular income tax. Fortunately, there are some steps you may be able to take to reduce its impact. The NIIT applies to you only if modified adjusted gross income (MAGI) exceeds: $250,000 for married taxpayers filing jointly and surviving spouses…
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Recordkeeping DOs and DON’Ts for business meal and vehicle expenses
If you’re claiming deductions for business meals or auto expenses, expect the IRS to closely review them. In some cases, taxpayers have incomplete documentation or try to create records months (or years) later. In doing so, they fail to meet the strict substantiation requirements set forth under tax law. Tax auditors are adept at rooting…
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Hiring your minor children this summer? Reap tax and nontax benefits
If you’re a business owner and you hire your children this summer, you can obtain tax breaks and other nontax benefits. The kids can gain on-the-job experience, spend time with you, save for college and learn how to manage money. And you may be able to: Shift your high-taxed income into tax-free or low-taxed income,…
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An S corporation could cut your self-employment tax
If your business is organized as a sole proprietorship or as a wholly owned limited liability company (LLC), you’re subject to both income tax and self-employment tax. There may be a way to cut your tax bill by conducting business as an S corporation. Fundamentals of self-employment tax The self-employment tax is imposed on 92.35%…
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Look at your employee handbook with fresh eyes
For businesses, so much has changed over the past year or so. The COVID-19 pandemic hit suddenly and companies were forced to react quickly — sending many employees home to work remotely and making myriad other tweaks and revisions to their processes. Understandably, you may not have fully documented all the changes you’ve made. But…
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