Do you have a hobby that’s a source of income? If so, that income must be reported on your tax return. The extent to which you can deduct expenses related to the activity depends on whether the IRS considers it a business or a hobby. You can generally deduct expenses if you operate as a … Read More
In some cases, it may be desirable to move a trust to a more favorable jurisdiction. But moving a trust from one state to another can present significant risks, so don’t attempt to do so without considering all the benefits, limitations and risks, and obtaining professional advice. Reasons to move a trust There are many … Read More
U.S. Treasury Secretary Janet Yellen has announced that 130 nations have agreed to proposals by the Organization for Economic Cooperation and Development for a global minimum tax on corporations. India, China, and Turkey, which had been holding out at some point in the negotiations, have joined in the agreement. Nine countries, however, didn’t sign. They … Read More
Many people, when planning their estates, simply divide their assets equally among their children. But “equal” may not necessarily mean “fair.” It all depends on your family’s circumstances. Specifically, providing for grandchildren is one area where equal treatment may inadvertently result in unfairness. Consider this scenario Bob has two adult children, Ted and Carol. Ted … Read More
The tax code provides a credit (of up to $7,500) to purchasers of qualified plug-in electric-drive passenger vehicles and light trucks. The IRS has added Ford, Hyundai and Porsche models to the list of vehicles eligible for the credit. They are the 2021: Ford Mustang Mach-E GT ($7,500); Hyundai Ioniq Plug-In Hybrid EV ($4,543); Hyundai … Read More
As mitigation measures related to COVID-19 ease, it will be interesting to see which practices and regulatory changes taken in response to the pandemic remain in place long-term. One of them might be relief from a sometimes-inconvenient requirement related to the administration of 401(k) plans. A virtual solution In IRS Notice 2021-40, the IRS recently … Read More
The IRS has released its latest “Data Book,” which covers the agency’s activities during fiscal year 2020. It showed that under the CARES Act, the IRS issued 161.9 million Economic Impact Payments (EIPs) to help mitigate the financial effects of the pandemic. The IRS then issued 146.5 million second-round EIPs. Combined, the IRS provided $412.9 … Read More
At many businesses, job descriptions have it easy. They were “hired” (that is, written) many years ago. They haven’t had to change or do anything, really, besides get copied and pasted into a want ad occasionally. They’re not really good at what they do, but they’re used again and again because everyone assumes they’re just … Read More
The Taxpayers Advocacy Service (TAS) is an independent office within the IRS that exists to help taxpayers resolve problems. Recently, the Government Accountability Office (GAO) looked at the operations of TAS. Since 2011, the office has fielded more than 2 million cases. Even with a declining budget, most TAS resources are devoted to direct taxpayer … Read More
Timing counts in financial reporting. Under the accrual method of accounting, the end of the accounting period serves as a strict “cutoff” for recognizing revenue and expenses. However, during the COVID-19 pandemic, managers may be tempted to show earnings or reduce losses. As a result, they may extend revenue cutoffs beyond the end of the … Read More