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Adam’s Tax Accounting Service 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 “Nanny Tax” Must Be Paid for More Than Just Nannies

Posted by on Aug 1, 2019 in Blog, General, Management, Tax Tips | Comments Off on The “Nanny Tax” Must Be Paid for More Than Just Nannies

The “Nanny Tax” Must Be Paid for More Than Just Nannies

You may have heard of the “nanny tax.” But did you know that even if you don’t employ a nanny, it may apply to you. Hiring a housekeeper, gardener, or other household employee (who isn’t an independent contractor) may make you liable for federal income and other taxes. There may also be state tax obligations to consider. If you employ a household worker, you aren’t required to withhold federal income taxes from pay. But you may choose to withhold them if the worker requests it. In that case, ask the worker to fill out a Form W-4. However, you...

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Businesses Can Utilize the Same Information IRS Auditors Use to Examine Tax Returns

Posted by on Jul 29, 2019 in Blog, General, Management, Tax Tips | Comments Off on Businesses Can Utilize the Same Information IRS Auditors Use to Examine Tax Returns

Businesses Can Utilize the Same Information IRS Auditors Use to Examine Tax Returns

The IRS uses Audit Techniques Guides (ATGs) to help their examiners get ready for audits. Your business can use these same guides to gain insight into what the IRS is looking for in terms of compliance with tax laws and regulations. Many ATGs target specific industries or businesses, such as construction, aerospace, art galleries, child care providers, and veterinary medicine. Others address issues that frequently arise in audits, such as executive compensation, passive activity losses, and capitalization of tangible property. How they’re...

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Summer: A Good Time to Review Your Investments

Posted by on Jul 24, 2019 in Blog, General, Management, Tax Tips | Comments Off on Summer: A Good Time to Review Your Investments

Summer: A Good Time to Review Your Investments

You may have heard about a proposal in Washington to cut the taxes paid on investments by indexing capital gains to inflation. Under this proposal, the purchase price of assets would be adjusted so no tax is paid on the appreciation due to inflation. While the fate of such a proposal is unknown, the long-term capital gains tax rate is still historically low on appreciated securities held for more than 12 months. And since we’re already in the second half of the year, it’s a good time to review your portfolio for possible tax-saving...

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It’s a Good Time to Buy Business Equipment and Other Depreciable Property

Posted by on Jul 22, 2019 in Blog, General, Management, Tax Tips | Comments Off on It’s a Good Time to Buy Business Equipment and Other Depreciable Property

It’s a Good Time to Buy Business Equipment and Other Depreciable Property

The Section 179 depreciation deduction for business property has long provided a tax windfall to businesses, enabling them to claim immediate deductions for qualified assets, instead of taking depreciation deductions over time. And there’s good news about this election. It was increased and expanded by the Tax Cuts and Jobs Act (TCJA). Even better, the Sec. 179 deduction isn’t the only avenue for immediate tax write-offs for qualified assets. Under the 100% bonus depreciation tax break provided by the TCJA, the entire cost of eligible assets...

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Volunteering for Charity: Do You Get a Tax Break?

Posted by on Jul 18, 2019 in Blog, General, Management, Tax Tips | Comments Off on Volunteering for Charity: Do You Get a Tax Break?

Volunteering for Charity: Do You Get a Tax Break?

If you volunteer your time to work for charity, you may be entitled to some tax breaks if you itemize deductions on your tax return. Unfortunately, they may not amount to as much as you think your generosity is worth. Because donations to charity of cash or property generally are tax deductible for itemizers, it may seem like donations of something more valuable for many people (their time) would also be deductible. However, no tax deduction is allowed for the value of time you spend volunteering or the services you perform for a charitable...

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M&A Transactions: Avoid Surprises From the IRS

Posted by on Jul 15, 2019 in Blog, General, Management, Tax Tips | Comments Off on M&A Transactions: Avoid Surprises From the IRS

M&A Transactions: Avoid Surprises From the IRS

If you’re thinking of buying or selling a business, or you’re in the process of a merger or acquisition, it’s important both parties report the transaction to the IRS in the same way. Otherwise, you may increase your chances of being audited. If a sale involves business assets (as opposed to stock or ownership interests), the buyer and the seller must generally report the purchase price allocations that both use to the IRS. This is done by attaching IRS Form 8594, “Asset Acquisition Statement,” to each of their respective federal income tax...

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You May Have to Pay Tax on Social Security Benefits

Posted by on Jul 11, 2019 in Blog, General, Management, Tax Tips | Comments Off on You May Have to Pay Tax on Social Security Benefits

You May Have to Pay Tax on Social Security Benefits

During your working days, you pay Social Security tax as part of the withholdings from your salary or self-employment tax. You may be surprised to learn that when you start receiving Social Security benefits some of the payments may be taxed. If you’re getting close to retirement age, you may be wondering if your benefits are going to be taxed. And if so, how much will you have to pay? The answer depends on your other income. If you are taxed, between 50% and 85% of your payments will be hit with federal income tax. (There could also be state...

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Bartering: A Taxable Transaction Even if Your Business Exchanges No Cash

Posted by on Jul 11, 2019 in Blog, General, Management, Tax Tips | Comments Off on Bartering: A Taxable Transaction Even if Your Business Exchanges No Cash

Bartering: A Taxable Transaction Even if Your Business Exchanges No Cash

Bartering for goods and services instead of paying cash may be beneficial to some small businesses. If your business engages in bartering, be aware that the fair market value of goods you receive in bartering is taxable income. If you exchange services with another business, the transaction results in taxable income for both parties. Income is also realized if services are exchanged for property. For example, if a construction firm does work for a retail business in exchange for unsold inventory, it will have income equal to the fair market...

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If Your Kids Are Off to Day Camp, You May Be Eligible for a Tax Break

Posted by on Jul 1, 2019 in Blog, General, Management, Tax Tips | Comments Off on If Your Kids Are Off to Day Camp, You May Be Eligible for a Tax Break

If Your Kids Are Off to Day Camp, You May Be Eligible for a Tax Break

Now that most schools are out for the summer, you might be sending your children to day camp. This is often a significant expense, but the good news is that you might be eligible for a tax break for the cost. The value of a credit Day camp is a qualified expense under the child and dependent care credit, which is worth 20% to 35% of qualifying expenses, subject to a cap. Note: Sleep-away camp does not qualify. For 2019, the maximum expenses allowed for the credit are $3,000 for one qualifying child and $6,000 for two or more. Other expenses...

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Which Entity Is Most Suitable for Your New or Existing Business?

Posted by on Jun 27, 2019 in Blog, General, Management, Tax Tips | Comments Off on Which Entity Is Most Suitable for Your New or Existing Business?

Which Entity Is Most Suitable for Your New or Existing Business?

The Tax Cuts and Jobs Act (TCJA) changed the landscape for business taxpayers because the law introduced a flat 21% federal income tax rate for C corporations. Under prior law, profitable C corporations paid up to 35%. The TCJA also cut individual income tax rates, which apply to sole proprietorships and pass-through entities, including partnerships, S corporations, and LLCs (treated as partnerships for tax purposes). However, the top rate only dropped from 39.6% to 37%. These changes have caused many business owners to ask: What’s the...

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