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During the pendency of a divorce, a taxpayer was ordered by a family court to transfer funds to an individual retirement account (IRA) in his spouse's name. Where the taxpayer received a distribution of funds from his IRAs and then wrote checks to the spouse, the exclusion from taxation available under Sec. 408(d)(6) was inapplicable, …
Continue reading IRA distribution to pay spousal support is taxable
As tax practitioners prepare to counsel clients about the loss of dependency exemptions on 2018 tax returns, there is good news to offer in the form of the enhanced child tax credit. The legislation known as the Tax Cuts and Jobs Act (TCJA), P.L. 115-97, doubled the credit amount, increased the refundable portion, and expanded …
Continue reading Child tax credit now higher, more widely available
The IRS on Thursday issued a warning to employers and small businesses to beware of growing attempts by cybercriminals to target businesses to obtain the business’s and employees’ information. These criminals then use the stolen information to open credit card accounts and file fraudulent tax returns for “bogus refunds.” In the past two years, the …
Continue reading Small businesses should guard against tax-return identity theft
If you are starting a business, it is essential that you familiarize yourself with all of the necessary tax forms that you will need to file with the IRS and the various taxes you will be required to pay. Every business is required to file a federal tax or information return. The type of business …
Accounting may not be your favorite topic, but it’s a necessary part of running a legal and functional business. You must report your business’s income and expenses, report payments to workers, and more. You might be wondering, What tax forms do I need for a small business? To get the ball rolling, here are a …
Is there such a thing as a right or wrong entity to form when first incorporating your business? Personally, I don’t think so as long as you do make it a point to incorporate. Many entrepreneurs will usually pick a sole proprietorship or a limited liability company (LLC) as their entity of choice. If you …
Continue reading Should You Incorporate as a Sole Proprietor or LLC?
Starting a business requires paying attention to numerous details, including many that have legal significance. But when entrepreneurs have so much to juggle and stay aware of, slip-ups can happen. The list of potential missteps is long. I am sharing several of those mistakes to give you a feel for what could set you up …
The answer to this question essentially boils down to whether someone who does work for you is self-employed or an employee. Here’s the difference: Self-employed independent contractors are paid in full for their services and are responsible for settling up with federal and state governments at tax time. The payor reports payments on IRS Form …
Continue reading What’s the difference between a 1099 and W-2?
Congress recently passed the “Tax Cuts and Jobs Act” which impacts both individuals and businesses. There are two important tax changes in 2018 that will impact every business owner in the United States. Corporate tax rates are now a flat 21% (permanent change) Pass through entities such as LLC’s get a 20% deduction (temporary change …
Continue reading 2 Important Tax Changes for Small Businesses in 2018
Freelancers and independent contractors face unique challenges during tax season. Here are some quick tips to better manage the process and maximize your deductions. Tax season: Two words that can strike fear into the self-employed. Whether you did a few extra freelance gigs on the side or manage your own business, self-employment adds additional layers …
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