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Fraudulently Files Returns

If the IRS determines that fraud exists, fraud penalties could be applied to the additional tax accessed. The fraud penalty is an additional tax of 75% of the portion of the underpayment attributable to the fraud.  Filing 941-X or 94-X will not necessarily alleviate...

Amending Payroll Tax Returns

If you are claiming after the fact ERC refunds you need to amend filed payroll tax returns. The IRS has issued special statues of limitations for amending: For 2020 payroll tax returns, statute closes 4-15-24 For 2021 payroll tax returns, statue closes 04-15-25 If...

The ERC (Employee Retention Credit)

Due to the perceived popularity of the ERC firms have been popping up and promoting the ERC. While this has been going on the IRS has been issuing advisory warnings of third parties promoting improper ERC claims to employers who may or may not qualify for the ERC. ...

The newest MBA’s

As someone who has an MBA, but not from a prestigious school. I didn’t have a mentor when I truly needed one. I was surprised to read that large firms are on hold with new hires. Imaging spending at least two years working on your future and being surprised that those...

Reading in the US

I am always curious on a number of topics as this blog has shown in the past.  The latest instance was who is reading in the us and what are they reading? So, I found a 2022 Nation survey on US reading statistics.  Here are their parameters. “The pandemic shifted the...

W-9 need to issue 1099’s

If you did not collect new W-9 from vendor’s regularly, you should start collecting them now. A W-9 has all the relevant information to determine if you need to or not issue a 1099-M or 1099-Nec to your vendor. The IRS requires businesses to report payment of...

1099-DA (Digital Assets)

The IRS has issued Brokers  guidance on how to comply with reporting rules on digital assets. A 2021 law requires brokers to report the sales price, tax basis and other information on digital asset trades. The rules were scheduled to first take effect for digital...

Thanksgiving

Do you use a budget for your Thanksgiving meal?  I know I don’t, I feel I would be afraid to gather all of the costs. I am sure I would be unpleasantly surprised. Each year, I start gathering ingredients early, especially those that are canned and difficult to locate,...

Why is there an income tax

The Federal Income Tax from 1861 was repealed in 1872, the bills of the Civil War were paid. Alas, there were puritanicals that wanted to enforce their will and beliefs on others.  They had disdain for those cultures that drank beer or wine, and hated those who...

First Federal Income Taxes

At 4:30 a.m. on April 12, 1861, Confederate troops fired on Fort Sumter in South Carolina’s Charleston Harbor. Less than 34 hours later, Union forces surrendered. Thus, the Civil War began. So did the financial requirements to fund the Civil War.  This prompted...

Historic Tax Rates

When meeting with clients who have unexpected tax liabilities, usually tied to events they were not monitoring as well as they could, interest, dividends capital gains on brokerage accounts where the brokers have discretion on trading. At time it helps to show them...

Rent Scheme

A tax-saving rent scheme backfires on the three owners of an S corporation. Each man owned one-third of a firm that operated fitness center franchises. The S corp didn’t have a central office, but instead paid rent to each shareholder for use of their personal...

1099-C

A canceled debt of a single-member LLC is taxable COD income to its owner. A man wholly ,owned an LLC that was disregarded for federal tax purposes. The LLC borrowed money from a bank but didn’t repay it. Eight years later, the bank sent Form 1099-C to the LLC,...

Halloween

Looking into the history of Halloween, it figures that it stems from my people and their superstitious beliefs.  Yes, I believe that my Irish relatives still believe in most of the ancient superstitions.  Weddings and funerals have people making strange gestures and...

Crypto Staking Rewards

The IRS has issued guidance on staking rewards in July. When one stakes crypto native to a proof-of-stake blockchain and receives additional crypto units or tokens as validation rewards, the fair market value of those token awards is gross income in the year the...

Crypto Token Rewards

The courts do not determine when and how to tax staking rewards. Bad news for a man who was asking a court to rule on the taxation of staking rewards. A court tosses his case. He filed a refund claim alleging that token rewards he got from staking cryptocurrency are...

Required Minimum Distribution (RMD) Beginning Age

Each year when talking about tax planning for the next year, I get a lot of frustration from some clients, they are reaching 72 and they don’t need or want to start taking their RMD’s. Well, I finally have some good news for them, granted it’s not great news but good...

SIMPLE IRA

Finally, some changes are coming to SIMPLE IRAs, starting in 2024. This change is thanks to SECURE 2.0. The dollar limits on annual employee contributions and catch-ups to SIMPLE IRAs will rise 10% for employers with 25 or fewer workers. A firm with 26 to 100...

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