Many employees take advantage of the opportunity to save taxes by placing funds in their employer’s health or dependent care flexible spending arrangements (FSAs). As the end of 2020 nears, here are some rules and reminders to keep in mind.
Read moreIRS Issues Guidance on Reporting PPP Loan and Forgiveness
An excerpt from a November 18 article by Accounting Today - “The IRS and the Treasury issued both a revenue ruling and a revenue procedure, essentially saying that since businesses aren’t taxed on the proceeds of a forgiven PPP loan, the expenses aren’t deductible. This results in neither a tax benefit nor a tax harm as the taxpayer hasn’t actually paid any money out of pocket. If a business reasonably believes that a PPP loan will be forgiven in the future, expenses related to the loan aren’t deductible (in 2020), whether the business has filed for forgiveness or not. In cases where a PPP loan was expected to be forgiven, but it isn’t, businesses will be able to deduct those expenses. “
If you would like more information on this or other topics, please feel free to call (910) 392-1900 or email office@wilmingtoncpas.com to schedule a meeting.
Taking distributions from a traditional IRA
Although planning is needed to help build the biggest possible nest egg in your traditional IRA (including a SEP-IRA and SIMPLE-IRA), it’s even more critical that you plan for withdrawals from these tax-deferred retirement vehicles. There are three areas where knowing the fine points of the IRA distribution rules can make a big difference in how much you and your family will keep after taxes:
Read moreDisability income: How is it taxed?
Many Americans receive disability income. You may wonder if — and how — it’s taxed. As is often the case with tax questions, the answer is … it depends.
Read moreDivorcing couples should understand these 4 tax issues
When a couple is going through a divorce, taxes are probably not foremost in their minds. But without proper planning and advice, some people find divorce to be an even more taxing experience. Several tax concerns need to be addressed to ensure that taxes are kept to a minimum and that important tax-related decisions are properly made. Here are four issues to understand if you’re in the midst of a divorce.
Read moreBuying and selling mutual fund shares: Avoid these tax pitfalls
If you invest in mutual funds, be aware of some potential pitfalls involved in buying and selling shares.
Read moreWhat tax records can you throw away?
October 15 is the deadline for individual taxpayers who extended their 2019 tax returns. (The original April 15 filing deadline was extended this year to July 15 due to the COVID-19 pandemic.) If you’re finally done filing last year’s return, you might wonder: Which tax records can you toss once you’re done? Now is a good time to go through old tax records and see what you can discard.
Read moreThere may be relief from tax liability for “innocent spouses”
If you file a joint tax return with your spouse, you should be aware of your individual liability. And if you’re getting divorced, you should know that there may be relief available if the IRS comes after you for certain past-due taxes.
Read moreWhy it’s important to plan for income taxes as part of your estate plan
As a result of the current estate tax exemption amount ($11.58 million in 2020), many estates no longer need to be concerned with federal estate tax. Before 2011, a much smaller amount resulted in estate plans attempting to avoid it. Now, because many estates won’t be subject to estate tax, more planning can be devoted to saving income taxes for your heirs.
Read moreHomebuyers: Can you deduct seller-paid points?
Despite the COVID-19 pandemic, the National Association of Realtors (NAR) reports that existing home sales and prices are up nationwide, compared with last year. One of the reasons is the pandemic: “With the sizable shift in remote work, current homeowners are looking for larger homes…” according to NAR’s Chief Economist Lawrence Yun.
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