Venmo, PayPal, and the IRS – 2022
Understanding 1099-K Reporting in 2022: What You Need to Know
-
-
The 100% Business Meal Deduction – 2021
The 100% Business Meal Deduction allowed businesses to deduct 100% of meal expenses for business associates, provided the meal was ordinary, necessary, and consumed at a restaurant. To qualify, both the business owner and an employee must have attended the meal, which had to be at a sit-down restaurant, fast food joint, coffee shop, food truck, or through delivery services like DoorDash and Uber Eats. However, this deduction did not apply to grocery stores, convenience stores, or vending machines. Proper documentation, including the date, amount spent, location, and attendees’ business relationships, was essential for claiming this deduction.
-
Advanced Child Tax Credit – 2021
The Advanced Child Tax Credit offered a significant financial boost to eligible families, providing a total annual credit of $3,600 and monthly advance payments of $300. To qualify, children had to be under 18 at the end of 2021, and applicants needed to have their main residence in the U.S. for over six months. Filing a 2019 or 2020 tax return claiming the Child Tax Credit was essential. Navigating the reconciliation process added complexity, particularly for self-employed individuals. The lessons learned from 2021 underscore the importance of understanding past tax situations.
-
Employee Retention Credit 101 – 2021
If you ran a small business in 2021 and managed to keep your team employed through all that chaos, first…
-
The Year of the Extended Deadline – 2020
The 2020 deadline extension brought significant relief to small business owners, allowing them additional time to file taxes and make strategic financial moves. Key adjustments included extended payment deadlines for estimated taxes, IRA contributions, and HSA/Archer MSA contributions, as well as crucial extensions for rent, mortgage, and basic living expenses. While some business structures, like S corporations and partnerships, faced unique deadlines, the extension offered valuable breathing room for many. This period highlighted the importance of reassessing financial strategies and maximizing retirement contributions. As we reflect on these lessons, it’s clear that the emotional and strategic challenges of that
-
The Employee Retention Credit – 2021
Employee Retention Credit (ERC) was a vital lifeline for small businesses in 2020 and 2021, providing financial support during unprecedented times. Eligibility criteria included business size and operational challenges, with the ERC offering substantial wage credits. Key changes from 2020 to 2021 included an increase in the maximum credit amount and expanded eligibility for qualified wages. Small business owners should carefully assess their operations and expenses to maximize ERC claims, utilizing Form 941 for record-keeping and potential retroactive claims. Understanding these options can significantly impact financial recovery during downturns.
-
Stimulus Checks & The Recovery Rebate – 2020
2020 was a year nobody saw coming. As the pandemic turned everything upside down, the federal government stepped in with…
-
PPP Loans & Your Taxes in 2020
Small business owners should rejoice as forgiven PPP loans are now exempt from taxation, marking a significant relief after previous limitations on deductible expenses. While the rules may have initially restricted deductions for payroll, rent, utilities, and mortgage interest, these funds are no longer considered taxable income. For businesses that opted for the safe harbor option, meeting specific criteria related to expected forgiveness or denial, this means clearer financial implications for their bottom line. However, understanding the nuances of these changes, including the importance of proper documentation, remains crucial for navigating this evolving landscape.
-
Alimony & Tax Law Changes – 2019
The tax landscape for alimony has shifted dramatically, with the 2019 changes eliminating the deduction for payers and altering reporting obligations for recipients. These changes may require you to revisit or modify agreements signed after January 1, 2019, to reflect updated tax rules. For those affected, understanding these implications is crucial for maintaining financial accuracy and compliance.
-
Itemizing vs. Standard Deduction – 2019
The Tax Cuts and Jobs Act significantly increased the standard deduction in 2019, prompting many taxpayers, particularly small business owners and self-employed individuals, to choose it over itemizing. While this change simplified tax returns, the $10,000 cap on state and local tax deductions also impacted itemization considerations for many.
-
The Postcard Tax Return Myth – 2019
The Big Promise of simplicity in tax filing is undermined by the intricate demands placed on self-employed individuals. This examination uncovers the reasons behind the postcard concept’s failure and its implications.
-
The 20% QBI Deduction – 2018
QBI Deduction: A Game-Changer for Small Business Owners
-
Simplifying the Home Office Deduction – 2017
Working from home? Here’s how the simplified home office deduction system works. To qualify, your space must be exclusively for business use, your primary office, and used by you or your business. If you’re self-employed or a freelancer, this deduction could save you money. But remember, you can’t claim depreciation or indirect expenses. Only apply if your office is 300 sq ft or smaller and your expenses are modest.
-
Section 179 – Your Small Business Equipment in 2016
Section 179, a critical tax benefit for small businesses, allowed for deductions on purchases of machinery, computers, and office equipment. In 2016, the maximum deduction was $500,000, applicable when equipment costs reached up to $2 million. However, this perk phased out at $2.5 million. This tool was vital for small business growth, enabling them to invest in essential assets. To qualify, businesses needed to purchase machinery, computers, office furniture, and certain vehicles. Claiming Section 179 required careful paperwork and professional guidance. This deduction made significant strides in supporting small business expansion.
