Virtual currencies, also known as cryptocurrencies, have gone mainstream. For example, you can use Bitcoin to buy a Tesla, or you can use a Bitcoin wallet on your smartphone to make everyday purchases. But beware: Using virtual currency has federal income tax implications that may surprise you. With increasing market acceptance and the skyrocketing price… Continue reading

The U.S. Department of Labor (DOL) has recently taken action on the criteria for determining independent contractor status, rescinding regulations that were enacted as recently as two weeks prior to President Biden’s inauguration in the last days of the Trump administration. That means what’s old is new—the regulations in force now are left over from… Continue reading

The pandemic has adversely affected many sectors of the U.S. economy, causing widespread job losses. At the start of the national emergency, Congress created a novel tax break—the Employee Retention Credit (ERC)—to entice employers to retain employees. But three different laws have created and changed the credit, which has led to significant confusion. Here’s a… Continue reading

Good news! Business taxpayers may still be able to take actions to lower their federal income tax liabilities for 2020, as well as for future years. Consider these ideas before you file last year’s return. Claim 100% First-Year Bonus Depreciation—Or Maybe Not For qualifying assets placed in service in 2020, business taxpayers can deduct 100%… Continue reading

Attempts to claim write-offs for bad debt losses have fueled controversies with the IRS for many years. Unfortunately, bad debt losses are increasingly common during the COVID-19 pandemic. Here’s an overview of the federal income tax treatment of these losses. The Basics The IRS is always skeptical when taxpayers claim deductions for bad debt losses.… Continue reading

The following table provides some important federal tax information for 2021, as compared with 2020. Some of the dollar amounts are unchanged and some changed only slightly due to inflation. Social Security/ Medicare 2021 2020 Social Security Tax Wage Base $142,800 $137,700 Medicare Tax Wage Base No limit No limit Employee portion of Social Security… Continue reading

Restaurants have struggled mightily during the COVID-19 pandemic. Thankfully, they’re specifically targeted for a new tax relief measure found in the massive Consolidated Appropriations Act (CAA), which became law on December 27, 2020. The new provision creates a temporary but meaningful tax incentive to spend more on business-related food and beverage costs. Preexisting tax breaks for… Continue reading