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Tag: tax

November 17, 2023

Case Study: CARES Act Turns Net Loss Into a Positive

At a Glance: An event management company facing significant net operating loss, turned to CBM for help. CBM utilized the loss and a provision from the CARES Act to lower previous year taxable income and earn the agency a large refund. Challenge: An event management company faced a significant financial setback with a $131,000 net operating loss on their corporate tax return. With the prospect of no future refunds or tax deductions, the company reached out to CBM to determine… Read more ›

November 9, 2023

Expect Credit Processing Delays from PTE Tax Filings; Proposed Solutions (Hopefully) on the Way

The 2023 tax season may require an additional level of patience for business owners filing for credits from pass-through entities (PTE). Maryland has seen a growing number of PTE filings the past few years. This increased workload coupled with administrative hurdles within the Comptroller’s office, has led to several cases of inaccurate returns and longer-than-expected processing delays. The Comptroller of Maryland sent a letter to tax professionals detailing the office’s struggles and offering solutions including asking tax filers for help…. Read more ›

November 8, 2023

IRS Offers a Withdrawal Option to Businesses That Claimed ERTC

Recent IRS warnings and announcements regarding the Employee Retention Tax Credit (ERTC) have raised some businesses’ concerns about the validity of their claims for this valuable, but complex, pandemic-related credit — and the potential consequences of an invalid claim. CBM has helped many clients file claims when they met the approved criteria requirements. However, we also recognize that many businesses not working with a reputable tax professional may have been misled by fraudulent parties into believing they were eligible to… Read more ›

October 19, 2023

Case Study: Optimizing Taxes by Switching Accounting Methods

Challenge A stonemasonry business encountered significant tax liabilities due to its use of the accrual method of accounting. Because the business was a C corporation and the 2017 Tax Cuts and Jobs Act offered opportunities for tax relief to organizations such as theirs, the owners reached out to CBM’s construction and real estate team for assistance. Solutions CBM’s team was familiar with the tenets of the Tax Cuts and Jobs Act due to having assisted several other businesses and advised… Read more ›

September 25, 2023

IRS Delays the Rothification of Catch-Up Contributions and SECURE Act 2.0

In a surprising move, the IRS announced that the SECURE 2.0 rule, which stated that catch-up contributions for high earners must go into Roth accounts, will be delayed until 2026. Originally scheduled to start in 2024, the delay provides a window for employers’ retirement plans to comply with the law and employees to reap the tax benefits of current catch-up contributions. The rule requires employees aged 50 or above, who earned $145,000 or more the previous year, to direct their… Read more ›

July 17, 2023

Virtual Currency Lands in the IRS’s Crosshairs

While the value of virtual currency continues to fluctuate, the IRS’s interest in it has only increased. In 2021, for example, the agency launched Operation Hidden Treasure to root out taxpayers who don’t report income from cryptocurrency transactions on their federal income tax returns. Moreover, the Inflation Reduction Act of 2022, allocated $80 billion to the IRS, most of it designated for enforcement activities. However, the Fiscal Responsibility Act, enacted in May 2023, will claw back $21.39 billion of that amount by the end… Read more ›

June 9, 2023

Three Types of Financial Documents You Need to Prepare for Divorce

Filing for divorce can be a chaotic and emotional time. In this period, valuable information could be glossed over, and key financial details can be missed. To ensure control over the divorce proceedings, you will want to collect all your financial documents and send them to an experienced financial advisor before you file. Before we tell you the financial documents you will need for your divorce proceedings, there are some general rules for collecting information: Now that you know some… Read more ›

April 20, 2023

IRS Guidance Coming Regarding the IRA’s Clean Vehicle Credit

The Inflation Reduction Act (IRA) extended and expanded the Section 30D Clean Vehicle (CV) Credit, previously known as the Electric Vehicle (EV) Credit. The credit now covers “clean vehicles,” which include plug-in hybrids, hydrogen fuel cell cars and EVs. On April 17, 2023, the IRS will publish proposed regulations to clarify how a CV can qualify for the credit. The proposed regs effectively limit the number of currently available models that qualify, due to strict sourcing requirements that will apply to CVs that buyers… Read more ›

March 13, 2023

U.S. Supreme Court Rules Against the IRS on Critical FBAR Issue

The U.S. Supreme Court recently weighed in on an issue in the Bank Secrecy Act (BSA) that has split two federal courts of appeal. The 5-4 ruling in Bittner v. U.S. is welcome news for U.S. residents who “non-willfully” violate the law’s requirements for the reporting of certain foreign bank and financial accounts on what’s generally known as an FBAR. FBAR stands for the Financial Crimes Enforcement Network (FinCEN) Form 114, Report of Foreign Bank and Financial Accounts. FBAR Reporting Requirement The… Read more ›

February 10, 2023

Tax Treatment of Debt Forgiveness: Watch Out for Tax Bills Delivered COD

Debtors typically experience a feeling of relief when a creditor agrees to provide debt forgiveness. But that feeling often is replaced by shock and confusion when they learn they owe taxes on so-called “cancellation of debt” (COD) income. Read on to learn the tax rules for COD income and how they might affect your tax situation. General Rule of Debt Forgiveness Taxes The IRS considers your debt canceled if it’s forgiven or discharged for less than the full amount you owe…. Read more ›