Due to COVID, a large number of families have found themselves seeking some sort of caregiver for their children during the work week. Whether it is a family member, daycare, or in-house help, people are willing to pay to make sure that their kids are safe. Some people may opt to hire a nanny, and some may even need to pay the federal government their “fair share” in the forms of social security and Medicare taxes. A nanny would be considered a household employee and the family retaining their services would be considered a household employer. As a household employer, you only withhold and pay social security and Medicare taxes if the cash wages you paid her exceed the threshold amount for t

The popup of random Halloween-themed stores across old, vacant buildings across the United States means one thing: shoppers are coming. While recent events may force some shoppers to opt for a virtual option this year such as Amazon, brick and mortar stores still expect shoppers to show up for the busiest part of the year for retail stores thanks to the approaching holidays. Businesses often need to hire workers on a seasonal or part-time basis. Not all employers may need to seek part time or seasonal employees for only holidays. For example, some businesses may need seasonal help for sporting events, holidays, and commercial fishing or harvest seasons. Whether you are getting paid or paying

There are typical actions that are taken when closing a business. You must file an annual return for the year you go out of business. If you have employees, you must file the final employment tax returns, in addition to making final federal tax deposits of these taxes. Also attach a statement to your return showing the name of the person keeping the payroll records and the address where those records will be kept. The annual tax return for a partnership, corporation, S corporation, limited liability company or trust includes check boxes near the top front page just below the entity information. For the tax year in which your business ceases to exist, check the box that indicates this tax ret

If you receive an option to buy stock as payment for your services, you may have income when you receive the option, when you exercise the option, or when you dispose of the option or stock received when you exercise the option. There are two types of stock options: Options granted under an employee stock purchase plan or an incentive stock option (ISO) plan are statutory stock options. Stock options that are granted neither under an employee stock purchase plan nor an ISO plan are non-statutory stock options. If your employer grants you a statutory stock option, you generally do not include any amount in your gross income when you receive or exercise the option. However, you may be subject

If you receive rental income for the use of a dwelling unit, such as a house or an apartment, you may deduct certain expenses. These expenses, which may include mortgage interest, real estate taxes, casualty losses, maintenance, utilities, insurance, and depreciation, will reduce the amount of rental income that ends up being subject to tax. For individuals, these expenses are typically reported on a Form 1040 and Schedule E. If you are renting to make a profit and do not use the dwelling unit as a residence, then your deductible rental expenses may be more than your gross rental income. Your rental losses, however, generally will be limited by the "at-risk" rules and/or the passive activity

In an attempt to return to normalcy, the United States is excited for the kickoff of the 2020 NFL Season. While only an extremely small number of people will attend the game in-person, millions will be watching from the television, laptop, or tablet around the world. While COVID has slowed down a lot of the world, it hasn’t stopped the gamblers and fantasy sports fanatics in the United States. If you are “smart” (lucky) enough to select the right players/bets, you’ll pocket some cash. However, take note that the Internal Revenue Service may be entitled to a portion of those winnings. In case you didn’t know, fantasy sports and gambling winnings are both taxable; whether obtaining legally in

Employers should pay close attention to their eligibility with regards to the Employee Retention Credit. Eligible employers can claim the credit for wages paid between March 12, 2020 and January 1, 2021. Most importantly, the credit is fully refundable. The Employee Retention Credit is a fully refundable tax credit for employers equal to 50 percent of qualified wages (including allocable qualified health plan expenses) that Eligible Employers pay their employees. This Employee Retention Credit applies to qualified wages paid after March 12, 2020, and before January 1, 2021. The maximum amount of qualified wages considered with respect to each employee for all calendar quarters is $10,000, so

This is a common question that we often get from taxpayers. They had a hard couple of years, went into tax debt, and now owe the IRS a lot of money. Luckily, however, they are on an installment agreement or payment plan. However, what they may not have realized is that by entering that agreement or plan, they signed all rights away to future tax refunds for the time being. One of the conditions of your installment agreement is that the IRS will automatically apply any refund (or over-payment) due to you against taxes you owe. Because your refund isn't applied toward your regular monthly payment, continue making your installment agreement payments as scheduled. If your refund exceeds your tot

You have several options for receiving your federal income tax refund. You can split your direct deposit refund among two or three different accounts, with up to three different U.S. financial institutions, direct deposit your refund into a single checking or savings account, receive your refund in a paper check. If that doesn’t intrigue you, then you can buy up to $5,000 in U.S. Series I Savings Bonds with your refund. With split refunds, you have a convenient option for managing your money — sending some of your refund to an account for immediate use and some for future savings — teamed with the speed and safety of direct deposit. It’s a win-win. A split refund lets you divide your refund

Now that you have been introduced to the list from part one of this two-part blog series, we can dive into the specifics of the list and the “why” behind some of the categories. Background Data and Why it Matters. People often underestimate the background data section and its importance. The first item on the list is, “A statement as to the objective and purpose of the valuation and/or succession plan.” The “why?” matters here. Not all clients will want the same things when planning their exit as everyone is in a different situation. One individual may be organizing their estate in preparation of retirement, where others may focus on strategically transferring their wealth to their child