The Inflation Reduction Act of 2022

The Inflation Reduction Act of 2022 The President recently signed into law the Inflation Reduction Act of 2022. This legislation will not only deal with Medicare’s drug price negotiations but will also deal with the ever-important climate change issue. Let’s look at what this legislation has to offer: Additional Funding for IRS Enforcement Over a ten-year period, funds are given to improve taxpayer services, enforce laws, support operations, and modernize … Read more

Changing Employees to Independent Contractors?

Changing Employees to Independent Contractors? What are the Ramifications? An employer made the decision to change the status of their workers from employees to independent contractors and it ended up backfiring. An at-home nursing service provider owed almost $1.3 million in back employment taxes and penalties for a misclassification of 99 nurses. The taxpayer, for reasons that were unclear, made the decision in 2016 to switch their employees to independent … Read more

New Tax Refund Bills!

NEW TAX RELIEF BILLS HAVE BEEN SIGNED INTO ACTION BY THE GOVERNOR!  In addition to granting tax refunds of $700 to qualifying taxpayers with California AGI up to $250,000 ($500,000 HOH), this bill also authorizes up to $1,050 for MFJ taxpayers who have California AMI over $500,000. The only downside is the payments will not arrive until the end of October (at the earliest). There are many things this … Read more

Tax Management in the Virtual World

TAX MANAGEMENT IN THE VIRTUAL WORLD Recently we have seen how cryptocurrency investments can be very unpredictable. In November 2021, the cryptocurrency market peaked at about $3 trillion. Two months later, the cryptocurrency market plummeted over 40%, wiping out more than $1.2 trillion in a matter of months. This can be daunting to navigate, but just like any bear or bull cycle in the stock market, it can present opportunities to use … Read more

Holding Property in a Corporation Cons

HOLDING PROPERTY IN A CORPORATION POTENTIAL ISSUES Holding property in an entity provides asset protection from creditors, but the type of entity holding the property will have a big tax impact; for example, partnerships have an edge over C or S corporations when it comes to getting the property back out of the entity. Weighing the pros and cons of different entities, whether real estate will be held in the … Read more

Employee Retention Tax Credit (ERC)

EMPLOYEE RETENTION TAX CREDIT  As we approach tax season, the Employee Retention Credit (ERC) may be an important credit for businesses. The ERC is a fully refundable IRS payroll tax credit (not a loan) available to employers with the potential of up to $26,000 per employee in federal payroll taxes. Businesses that received round one and/or two of Paycheck Protection Program (PPP1 and PPP2) loans also qualify for the ERC.  Benefits  The … Read more

Paying the SALT Workaround Tax

THE LOGISTICS: PAYING THE SALT WORKAROUND TAX  We previously sent you information about the details of the SALT cap work around, or Pass-Through Entity (PTET) on November 8, 2021. Here is a brief recap and a link to the full article: The Franchise Tax Board has now published the PTE Elective Tax Payment Voucher (FTB 3893)  on November 1, 2021. The voucher may be used by S corporations and partnerships to … Read more

State Tax Deduction Workaround

STATE TAX DEDUCTION WORKAROUND This year California passed AB 150, which enacts an elective passthrough entity tax (PTET). The idea behind the PTET is to work around the $10,000 SALT deduction limit to an individual’s itemized deductions that came into effect back in 2018. Simply, qualified passthrough entities may pay tax on a consenting owner’s behalf based on the owner’s distributive share of income. The entity may then include that … Read more