Adam’s Tax Blog
Note: Tax advice, articles, and content contained on this site are intended for informational and educational purposes only. They are not a substitute for professional advice. Tax matters are can be extremely complex and vary greatly for each individual or company. Please click here to read our complete disclosure and disclaimer for the information presented on this site.
The Possible Tax Consequences of PPP Loans
If your business was fortunate enough to get a Paycheck Protection Program (PPP) loan in connection with the COVID-19 crisis, you should be aware of the potential tax implications. PPP basics The Coronavirus Aid, Relief and Economic Security (CARES) Act, enacted on...
The Tax Implications of Employer-Provided Life Insurance
Does your employer provide you with group term life insurance? If they do and the coverage is higher than $50,000, this employee benefit may create undesirable income tax consequences for you. “Phantom income” The first $50,000 of group term life insurance coverage...
File Cash Transaction Reports for Your Business — on Paper or Electronically
Does your business receive large amounts of cash or cash equivalents? You may be required to submit forms to the IRS to report these cash transactions. Filing requirements Each person engaged in a trade or business who, in the course of operating, receives more than...
Are Scholarships Tax-Free or Taxable?
COVID-19 is changing the landscape for schools this fall. But many children and young adults are going back, even if it’s just for online learning, and some parents will be facing tuition bills. If your child has been awarded a scholarship, that’s cause for...
Why Do Partners Sometimes Report More Income on Tax Returns Than They Receive in Cash?
You may come across a situation that gives you pause if you’re a partner in a business. In a given year, you may be taxed on more partnership income than was distributed to you from the partnership. Why does this happen? The answer lies in the way partnerships and...
Take Advantage of a “Stepped-Up Basis” When You Inherit Property
If you’re planning your estate, or you’ve recently inherited assets, you may be unsure of the “cost” (or “basis”) for tax purposes. Fair market value rules Under the fair market value basis rules (also known as “step-up and step-down” rules), an heir receives a basis...
Even If No Money Changes Hands, Bartering Is a Taxable Transaction
Many small businesses are strapped for cash due to the COVID-19 pandemic. So they may find it beneficial to barter for goods and services instead of paying cash. If your business gets involved in bartering, remember the fair market value of goods that you receive in...
Conduct a “Paycheck Checkup” to Make Sure Your Withholding is Adequate
Were you surprised to find out you owed money when you filed your federal tax return this year? You might want to change your withholding so that this doesn’t happen again next year. You might want to do that even if you got a big refund. Receiving a tax refund...
Businesses: Get Ready for the New Form 1099-NEC
There’s a new IRS form for business taxpayers that pay or receive nonemployee compensation. Beginning with tax year 2020, payers must complete Form 1099-NEC, Nonemployee Compensation, to report any payment of $600 or more to a payee. Why the new form? Prior to 2020,...
After You File Your Tax Return: 3 Issues to Consider
The tax filing deadline for 2019 tax returns has been extended until July 15 this year, due to the COVID-19 pandemic. After your 2019 tax return has been successfully filed with the IRS, there may still be some issues you should bear in mind. Here are three...
Steer Clear of the Trust Fund Recovery Penalty
If you own or manage a business with employees, you may be at risk for a severe tax penalty. It’s called the “Trust Fund Recovery Penalty” because it applies to the Social Security and income taxes required to be withheld from a business employees’ wages. Because...
Some People Are Required to Return Economic Impact Payments That Were Sent Erroneously
The IRS and the U.S. Treasury had disbursed 160.4 million Economic Impact Payments (EIPs) as of May 31, 2020, according to a new report. These payments were sent to eligible individuals in response to the economic threats caused by COVID-19. The U.S. Government...