Author: Tony Novak
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Ignorance among professionals is a growing problem
Is it just me? I’m increasingly shocked with the collective level of ignorance surrounding us. In my work, naturally, I see it most often among people who call themselves tax and financial professionals. The details of behavior described as the Dunning-Kruger effect make the problem worse. Back in the 1980s and early 90s when professional…
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Five types of tax transcripts (and when to use them)h
Tax transcripts are a common tool used to solve tax problems. There are five different types. The type we use depends on the situation. 1) Tax Return Transcript – shows you tax return as filed, including most line items including your adjusted gross income (AGI) from your original Form 1040-series tax return as filed, along…
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Rules for CPAs who handle clients’ PPP loans
Last year the AICPA issued ethics guidance to CPAs who handle PPP loan application and forgiveness applications for their business clients. This has become a significant issue for me lately. The guidance reminds practitioners that assisting the client in this capacity is considered a nonattest service requiring application of the independence and related rules in…
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People: stop meeting with your accountant!
Last night a peer tax accountant reported in an online professional group that she is sick and taking time off after contracting COVID. Then she related the story that she continued to meet with clients to do their taxes this year and that sometimes they take their masks off during the meeting. She had that…
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Tax accounting for PPP loans in small S corporations
Income PPP loans are not taxable income but of course must be recorded in the company’s bookkeeping. The question is how to record these transactions for correct tax treatment. Their isn’t just one ‘correct’ way to do this but actually several options listed by AICPA under IAS20. (My information comes from third party coverage in…
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IRS guidance on reporting 2020 unemployment compensation
Update: The issue is now resolved in tax filing software. The American Rescue Plan Act of 2021 (P.L.117-2) includes a provision allowing taxpayers with income under $150,000 to exclude $10,200 of 2020 payments from their taxable income. But the details on how to claim this tax benefit are not clear at this time. IRS urges…
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How to measure your wireless signal strength
My blog primarily covers small business financial planning issues but occasionally wanders into technical issues when it seems like the advice would be useful and the information is not plainly available elsewhere. In this case many of us work from home or mobile locations using a Windows 10 based notebook computer. Wireless signal strength is…
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Nine 2021 tax law changes in the American Rescue Plan
The American Rescue Plan makes these nine tax law changes for 2021: Additional stimulus payments Expanded Child Tax Credit Expanded Child and Dependent Care Credit Expanded Earned Income Tax Credit Increased Premium Tax Credits Extension and expansion of Paid Sick Leave and Family Leave Extension of Employee Retention Credit Pension plan relief Repeal of worldwide…
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Tax strategies for high income individuals
Of all the services I offer to high income clients, no other has such a rate of return on investment of time and money as income tax planning. Applied consistently year after year as part of an overall financial plan, it can easily add hundreds of thousands of wealth that would otherwise be paid as…
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CNBC published incorrect tax advice about reporting of cybercurrency
SHAME ON @CNBC editors and author @sahahtobrien! This type of inaccurate reporting of tax policy and procedure in this article should be called out for the misleading information portrayed as public advice. At best it is sloppy reporting. At worst it represents a lack of understanding of the topic covered and the spreading of incorrect…