As the COVID-19 pandemic persists, many employers continue to encourage or require their employees to work from home (i.e., telework). These remote working arrangements have tax implications. Here’s how they could affect you.
How Renovating a Historic Building Can Put Money in Your Pocket
The federal Rehabilitation Tax Credit, or rehab credit, offers significant financial incentives for owners or leaseholders of historic buildings to renovate those structures.1
What’s the big deal? Why are tax credits so exciting?
Tax credits, unlike deductions, reduce your tax bill dollar-for-dollar. If you spend $100,000 and get a 20 percent tax credit, you reduce your tax bill by $20,000. That’s Uncle Sam putting $20,000 in your pocket. And there’s more.
Deduct 100% of Your Employee Recreation and Parties
You take Bill, your best customer, to the local country club and treat him to 18 holes of golf. The golf produces a zero deduction.
Compare this.
You take your employees and their spouses and children to the local country club, where they play golf and tennis; swim; and enjoy lunch, dinner, and snacks.
The cost of the country club meals and activity produces a 100 percent tax deduction.1
In this article, you will learn the following:
- What it takes to qualify an employee party for the 100 percent deduction
- What types of employee entertainment qualify for this 100 percent deduction
- How tax law defines entertainment that’s primarily for the benefit of employees
Are Taxes Two-Timing You? How to avoid dual-taxation…
The shift to remote working during the COVID-19 pandemic has been embraced by both employees and employers. This change will likely continue to varying degrees by many companies.
Although remote working offers great benefits, employees need to know about the possible tax consequences and how to navigate them.
Beat the Unfair $10,000 SALT Cap with a C Corporation
C corporations cause double taxation for business owners, so you probably think you want to avoid them at all costs.
And for many of you, this is true, as the S corporation often provides the lower overall tax outcome.
But for some of you, the C corporation could provide the best tax outcome, especially since you can bypass the $10,000 state and local tax (SALT) deduction cap, which was introduced by the Tax Cuts and Jobs Act (TCJA), with a C corporation.
Common Errors To Avoid When Filing a Tax Return
While not all mistakes on tax returns cause delays in refunds, some do. As the May 17 deadline approaches, it pays to steer clear of the ten tax return errors listed below.
Tax Credits for Electric Vehicles and Plug-in Hybrids
Tax credits are still available for Qualified Plug-in Electric Drive Motor Vehicles, including passenger vehicles and light trucks. The credit applies to vehicles acquired after 12/31/2009 and is limited to $7,500. State and/or local incentives may also apply.
Tax Breaks for Families With Children
If you have children, one or more of these tax credits and deductions could help your family reduce the amount of tax owed. Let’s take a look:
Claiming the Credit for Other Dependents
Taxpayers with dependents who don’t qualify for the child tax credit may be able to claim the credit for other dependents. The maximum credit amount is $500. To take the credit, your dependent must meet certain conditions.
Unemployment Benefits Identity Theft Scam Alert
During 2020, millions of taxpayers were impacted by the COVID-19 pandemic through job loss or reduced work hours. Some taxpayers who faced unemployment or reduced work hours applied for and received unemployment compensation from their state. As a reminder, unemployment benefits are taxable income and must be reported on tax returns.