Category: Taxes
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How to report PPP loan forgiveness on your 1040 tax return
IRS included little specific guidance on the reporting of tax-exempt income from the forgiveness of a PPP loan. Generic instructions are included in the instructions for Form 1040, however tax law is clear that we may not rely on IRS instructions in this format to be reliable. Tax software, so far, and to the extent…
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How to handle tax law complexity
Yesterday a business owner made a comment in conversation fearful of the complexity of tax laws and his perception that compliance regulations are getting worse. His perception is accurate but I did not say so. Instead, I said that it is not my intention to help him learn more about this overly complex field. This…
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Review of Biden administration tax policy progress after one year in office
The Biden administration proposed two major themes in its tax reform agenda. These were widely promoted during the campaign and then heavily promoted by the White House and the U.S. Department of the Treasury over the past year. Now, one year after the administration began work, this blog post reviews the progress made and the…
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Reflecting on the 1099 filing season
IRS Form 1099 procedures are not overly complicated either in theory or in practice but are perhaps the most widely misunderstood topic in US taxation today. Reading online comments and suggestions and many stories of misapplication, it is clear that the government has much work ahead before it can effectively utilize business reporters’ information returns…
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IRS Free File service is expanded
IRS is expanding its promotion of free electronic filing this year. Eight providers are participating in the IRS’s Free File program: 1040Now, OLT, FreeTaxUSA, TaxAct, FileYourTaxes.com, TaxSlayer, Free1040taxreturn.com, and eztaxreturn.com. Three other large and better-known tax service providers – TurboTax, H&R Block and Jackson Hewitt – have free offers for tax filing that are not…
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Sample Work Plan for tax preparation
This is the beginning of another tax season and I notice already that some independent preparers are struggling with the increasingly messy topic of client communications. As part of my coaching certification program I am now working with more tax accountants on helping them build their business. So this topic came up a few times…
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How many states will require you to file a nonresident tax return this year?
If you worked in, sold to customers in, or own property in another state, pay attention to avoid nasty penalties, legal action and collections. Seven states that do not require individual tax returns filed are Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. That filing exemption goes for individual residents and non-residents*. Most other…
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Cash App misinformation for 2022; Five clarifying points*
When a bank, payment processor, finance company, cash app company, mortgage company, attorney, settlement agent, etc., reports a transaction to the IRS and/or a state revenue department, THIS DOES NOT MAKE THE AMOUNT REPORTED TAXABLE INCOME. There is NO CHANGE IN FEDERAL OR STATE TAX LAW in 2022 that changes the taxability of any transaction,…
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“My accountant disappeared”
Preface: For years industry observers have warned about the aging of existing CPA professionals, the growing portion that were working beyond intended retirement age, the mass exodus of middle level producers at larger firms, and the lack of younger accountants coming into the public accounting industry. Yet none of that predicted the accounting industry crisis…
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2021: the year of tax misinformation
2021 may be remembered as the year when more taxpayers were hurt by bad tax advice than any other. Some recently published sources say millions were led astray by just one illegal strategy involving IRAs. The scam was promoted by just a few sales companies but gained viral popularity as quickly as other fake news…