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Managing your assets in terms of taxes can seem intimidating at first glance. A simple mistake can cause significant damage to your business. However, understanding concepts like depreciation and amortization can help avoid potential issues in the future. This guide explains the various aspects of amortization and depreciation to help navigate your assets.
There are many reasons you can choose to file an extension for your income taxes. Most likely, you simply need more time to gather all of your information or meet with your accountant. But is there a downside to filing an extension?
For tax year 2021, the Child Tax Credit increased from $2,000 per eligible child to $3,600 per child ages five and younger and $3000 for children ages six to 17. The amount of Advanced Child Tax Credits is half of the new credit amounts. So, starting July 2021, if you are eligible, you will start to receive monthly Advanced Child Tax Credit payments. If your child is five years old or younger, the payment would be $300 per month through December. That is $1,800, or half of the new Child Tax Credit amount. If you have children between the ages of six and 17, your monthly payment will be $250 per month through December, or $1,500 total.
You filed your return, and you forgot something, or you realize the return was wrong. How do you fix?
You are forgiven for not being able to keep up with all of the changes in small business taxes. It has been a chore to digest everything even for professionals. Here is a recap of recent small business expense changes.
An S corporation is a type of corporation that meets the specified requirements of the Internal Revenue Code (IRS). An S corporation passes through most of its business income and loss to its shareholders like a sole proprietor. The owners are not liable to pay double tax, at the corporate level and then on the individual shareholder level.
Accountants are weird. They use funny words and use lots of spreadsheets. One common word is Capital Improvements. Similar words that they use to describe the same things: Capital Assets, Fixed Assets, Property, Real Estate, FF&E (Furniture, Fixtures, & Equipment). In the accounting tax world, all of these terms describe something with an economic benefit beyond one year.
You're not really getting paid to learn, but it definitely pays to learn.
Lots of the old tax rules have changed in the last few years. If you haven't reviewed and adapted, you are likely paying your rich Uncle Sam too much. The Tax Cut and Jobs Act (TCJA) combined the amounts for standard deductions and exemptions into one number. The Act also eliminated deductions entirely. This effectively removed itemized deductions for many tax payers since the standard deduction/exemption for 2020 is $24,800 (married filing jointly).
1099’s are the forgotten form of small businesses. The IRS uses 1099’s to collect information from various sources to help them with compliance, read make sure you file all of your income.