Despite the COVID-19 pandemic, government officials are seeing a large increase in the number of new businesses being launched. From June 2020 through June 2021, the U.S. Census Bureau reports that business applications are up 18.6%. The Bureau measures this by the number of businesses applying for an Employer Identification Number. Entrepreneurs often don’t know … Read More
The Congressional Budget Office (CBO) published a report about the distribution of household income in 2018. The CBO estimates that the average income among the highest quintile households was more than 14 times the average income of households in the lowest quintile. Average income before means-tested transfers and federal taxes among households in the lowest … Read More
There’s a harsh tax penalty that you could be at risk for paying personally if you own or manage a business with employees. It’s called the “Trust Fund Recovery Penalty” and it applies to the Social Security and income taxes required to be withheld by a business from its employees’ wages. Because taxes are considered … Read More
The IRS is providing relief to certain employers claiming the Work Opportunity Tax Credit (WOTC). Specifically, the agency has provided a 28-day extension of the deadline for employers claiming the WOTC to submit a request to a designated local agency to certify that an employee hired between Jan. 1, 2021 and Oct. 8, 2021, is … Read More
If you have a parent entering a nursing home, you may not be thinking about taxes. But there are a number of possible tax implications. Here are five. 1. Long-term medical care The costs of qualified long-term care, including nursing home care, are deductible as medical expenses to the extent they, along with other medical … Read More
The deadline for the third 2021 estimated tax payment is rolling up on Sept. 15. Changes in the economy brought by COVID-19 include a new crop of self-employed persons, such as gig-economy workers. Like most people with income that isn’t subject to withholding, these workers may need to make estimated tax payments for the first … Read More
The IRS and the U.S. Treasury Department have announced that the August advance Child Tax Credit (CTC) payments have begun to reach eligible families. This second batch of advance monthly payments, worth about $15 billion, are reaching about 36 million families. The IRS is stressing that it’s not too late for low-income families to sign … Read More
If you’re planning your estate, or you’ve recently inherited assets, you may be unsure of the “cost” (or “basis”) for tax purposes. The current rules Under the current fair market value basis rules (also known as the “step-up and step-down” rules), an heir receives a basis in inherited property equal to its date-of-death value. So, … Read More
Getting mail from the IRS may make a taxpayer go weak in the knees. But not all IRS letters are scary. For example, you may receive a notice of a change to your account, a request for more information or a notification that a payment is due. Here are some tips for what to do … Read More
More than 43 million student borrowers are in debt with an average of $39,351 each, according to the research group EducationData.org. If you have student loan debt, you may wonder if you can deduct the interest you pay. The answer is yes, subject to certain limits. However, the deduction is phased out if your adjusted … Read More