Category: IRS

Chances are, your construction business hires independent contractors, rather than employees, to perform some of the work. These arrangements obviously save your company a lot of time, money and headaches. Take a look at some of the recordkeeping and financial differences: With anEmployee: With an IndependentContractor: You must pay the employer’s half of FICA, as well as federal unemployment tax (FUTA). You generally don’t have to withhold taxes from the worker’s pay, you don’t owe the employer’s portion of FICA… Read more ›

It’s not uncommon for an incoming partner in a professional firm to take out a personal loan to finance all or part of the cost of acquiring an ownership interest. If some of your firm’s partners have done this, they need to know the proper federal income tax treatment of the resulting interest expense. Such partner-level interest expense is sometimes called “outside interest” because it comes from a personal loan that is outside of the partnership. IRS guidelines say outside… Read more ›

The IRS recently announced many inflation adjustments for the 2023 tax year. IRS Revenue Procedure 2022-38 provides details about these amounts. Because inflation is high, many of the amounts for 2023 will change more than they have in recent years. Here are some of the tax amounts for 2023, as compared with 2022. Tax Item 2023 2022 Highest tax rate of 37% Will affect singles with income exceeding $578,125 ($693,750 for married taxpayers filing jointly). Affects singles with income exceeding $539,900… Read more ›

Medical expenses can be costly — and they’re not always covered by insurance. But there may be a silver lining: You may be able to claim an itemized deduction for the amounts you pay for medical, dental and vision care, if you incur enough costs to exceed the applicable threshold for the tax year. Here are the details about this deduction. Raising the Bar on Medical Expense Deductions You can claim an itemized deduction for medical, dental, and vision care… Read more ›

  Recordkeeping is often essential to business operations and automobile dealerships are no exception. Many auto dealerships use the Last-In, First-Out (LIFO) method of inventory accounting. Although the LIFO method can provide significant tax benefits, you must be careful to meet certain tax law requirements. One such requirement that is often overlooked is the need to maintain comprehensive records. There are different LIFO methods for new and used vehicle inventories. For new vehicle inventories, dealerships electing to use the alternative… Read more ›

The IRS recently issued its 2023 cost-of-living adjustments for more than 60 tax provisions. With inflation up significantly this year, many amounts increased considerably over 2022 amounts. As you implement 2022 year-end tax planning strategies, be sure to take these 2023 adjustments into account. Also, keep in mind that, under the Tax Cuts and Jobs Act (TCJA), annual inflation adjustments are calculated using the chained consumer price index (also known as C-CPI-U). This increases tax-bracket thresholds, the standard deduction, certain… Read more ›

When President Biden signed the Inflation Reduction Act (IRA) into law in August, most of the headlines covered the law’s climate change and health care provisions. But the law also enhances an often overlooked federal tax break for qualifying small businesses. The IRA more than doubles the amount a qualified business can potentially claim as a research and development (R&D) tax credit to offset its payroll tax for tax years starting after 2022 — to a maximum of $2.5 million… Read more ›

The Inflation Reduction Act (IRA) includes a wide range of tax incentives aimed at combating the dire effects of climate change. One of the provisions receiving considerable attention from consumers is the expansion of the Qualified Plug-in Electric Drive Motor Vehicle Credit (IRC Section 30D), now known as the Clean Vehicle Credit. While the expanded credit seems promising, questions have arisen about just how immediate its impact will be. Here’s what you need to know about the credit if you’re… Read more ›

Taxpayers will soon have access to a resource to protect against tax-related identity theft and the potentially serious outcomes that come with it. Before the next tax filing, the IRS will roll out to each tax filer a six-digit PIN number, as part of its new Identity Protection (IP) PIN opt-in program individuals can use. Participation in the program is voluntary and includes the following features: ●     The IP PIN should be entered onto an electronic tax return when prompted… Read more ›

While the recently announced student loan debt relief has captured numerous headlines, it’s estimated that another federal relief program announced on the same day will provide more than $1.2 billion in tax refunds or credits. Specifically, IRS Notice 2022-36 extends penalty relief to both individuals and businesses who missed the filing deadlines for certain 2019 and/or 2020 tax and information returns. The relief covers many of the most commonly filed forms. Broad Relief for Late Taxpayers The intent behind the… Read more ›