What happens if an individual can’t pay taxes
While you probably don’t have a problem paying your tax bills, you may wonder: What happens if you (or someone you know) can’t pay taxes on time? It’s important to file a properly prepared return even if full payment can’t be made. Include as large a partial payment as you can. You may be able to get an installment agreement with the IRS or borrow the money to make the payment. In some cases, a payment extension may be available if you can show payment would cause “undue hardship.” Not filing and paying could lead to escalating penalties and having liens assessed against your assets and income. It could also result in seizure and sale of your property. Contact us about your options.
The President’s action to defer payroll taxes: What does it mean for your business?
On August 8, President Trump signed four executive actions, including a Presidential Memorandum to defer the employee’s portion of Social Security taxes for some people. These actions were taken in an effort to offer more relief due to the COVID-19 pandemic. The action only defers the taxes, which means they’ll have to be paid in the future. […]
5 common accounting software mistakes to avoid
No company can afford to operate without the right accounting software. When considering whether to buy a new product or upgrade their current solution, however, business owners often fall prey to some common mistakes. Here are five gaffes to avoid: 1) Relying on generic software when an industry-specific solution may be available, 2) Over- or underspending because of a failure to identify all current accounting needs, 3) Sticking with an outdated product for too long, 4) Ignoring the importance of integration and mobile access, and 5) Not getting critical input from your CPA. We can help you determine your accounting needs, set a feasible budget and choose the right solution.
More parents may owe “nanny tax” this year, due to COVID-19
In the COVID-19 era, many parents are hiring nannies and babysitters because their daycare centers and summer camps have closed. This may result in federal “nanny tax” obligations. Keep in mind that the nanny tax may apply to all household workers, including housekeepers, babysitters, gardeners or others who aren’t independent contractors. If you employ someone […]
The possible tax consequences of PPP loans
If your business got a Paycheck Protection Program (PPP) loan taken out due to the COVID-19 crisis, there are potential tax implications. The PPP allows eligible businesses to receive loans that will be forgiven if they spend the proceeds on certain items within a certain period of time. In general, the reduction or cancellation of non-PPP debt results in cancellation of debt (COD) income to the debtor. However, forgiveness of PPP debt is excluded from gross income. The IRS has stated that expenses paid with PPP proceeds can’t be deducted, because the loans are forgiven without having taxable COD income and are tax-exempt income. Deducting the expenses would result in a double tax benefit.
The tax implications of employer-provided life insurance
Does your employer provide you with group term life insurance? If so, and depending on the amount of coverage, this employee benefit may create undesirable income tax consequences for you. The first $50,000 of group term life insurance coverage that your employer provides is excluded from taxable income and doesn’t add anything to your income tax bill. But the employer-paid cost of group term coverage in excess of $50,000 is taxable income to you. It’s included in the taxable wages reported on your Form W-2 — even though you never actually receive it. Contact us if you have questions about group term coverage or how much it is adding to your tax bill.
Thoughtful onboarding is more important than ever
In today’s anxious environment of COVID-19-related safety concerns and compliance challenges, a thoughtful onboarding program is more important than ever. Onboarding refers to “[a formal] process of helping new hires adjust to social and performance aspects of their new jobs quickly and smoothly,” according to the Society for Human Resource Management. It’s a crucial opportunity for you to explain how your company is coping with the COVID-19 crisis, as well as to introduce new workers to their jobs. Onboarding programs generally involve three parts: 1) preparing the employee for work, 2) optimizing his or her first day, and 3) following up regularly. Contact us for more info.
File cash transaction reports for your business — on paper or electronically
Does your business receive large amounts of cash or cash equivalents such as bank checks? You may be required to submit forms to the IRS to report these transactions. Each person engaged in a trade or business who receives more than $10,000 in cash in one transaction, or in two or more related transactions, must file Form 8300. Any transactions conducted in a 24-hour period are considered related transactions. Businesses required to file Form 8300 should know that in addition to filing on paper, e-filing is an option. The form is due 15 days after a transaction. Businesses that file electronically get an automatic acknowledgment of receipt when they file. Contact us with questions.
Strengthen your supply chain with constant risk awareness
Business owners are no strangers to supply-chain worries; the pandemic has only complicated matters. One commonly known threat is concentration, when a business relies on a customer or supplier for 10% or more of its revenue or materials, or on several customers or suppliers located in the same geographic area. Check regularly into which suppliers are available to serve you and whether new ones have emerged that might allow you to mitigate concentration. Keep a close eye on COVID-19 severity, weather conditions, tax rates, regulatory changes and geopolitical uncertainty in areas where your suppliers operate. Contact us for help making cost-effective improvements to your supply chain.
Are scholarships tax-free or taxable?
If your child has been awarded a scholarship, congratulations! But be aware that there may be tax implications. Scholarships and fellowships are generally tax-free for students at elementary, middle and high schools, as well as those attending college, graduate school or accredited vocational schools. It doesn’t matter if the scholarship makes a direct payment to the student or reduces tuition. However, certain conditions must be met. A scholarship is tax-free if it’s used to pay for: Tuition and fees required to attend the school, and fees, books, supplies and equipment required of students. Room and board, travel, research and clerical help don’t qualify. Contact us to learn more.
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