Estate planning: Joint ownership pros & cons

Estate planners often tout the virtues of owning property jointly — and with good reason. Joint ownership generally offers several advantages for surviving family members. But this shouldn’t be viewed as a panacea for every estate planning concern. You must also be aware of all the implications. Title Wording Matters Joint ownership requires interests in property …
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Are investment-related expenses deductible? It depends…

Do you have significant investment-related expenses, including the cost of subscriptions to financial services, home office expenses and clerical costs? Under current tax law, these expenses aren’t deductible through 2025 if they’re considered investment expenses for the production of income. But they’re deductible if they’re considered trade or business expenses. For years before 2018, production-of-income …
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Heads up! IRS audits may be on the rise

The IRS just released its audit statistics for the 2020 fiscal year and fewer taxpayers had their returns examined as compared with prior years. But even though a small percentage of returns are being chosen for audit these days, that will be little consolation if yours is one of them. Latest statistics Overall, just 0.5 …
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Eligible employers: Act now to claim Employee Retention Tax Credit

The Employee Retention Tax Credit (ERTC) is a valuable tax break that was extended and modified by the American Rescue Plan Act (ARPA), enacted in March of 2021. Here’s a rundown of the rules: Background Congress enacted the ERTC in the CARES Act to encourage employers to hire and retain employees during the pandemic. Initially, …
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In the courts: FBAR penalties and the full payment rule

In the recent case of Mendu v. United States, the U.S. Court of Federal Claims handed down a decision regarding whether penalties assessed for failure to file a FinCEN Report 114, “Report of Foreign Bank and Financial Accounts” (FBAR) are subject to the full payment rule. The result of the case sheds some light on this often-misunderstood …
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7 valuable deductions for self-employed individuals

If your business was forced to close due to the pandemic, you may be itching to get back in the game. Or maybe you’re looking to fulfill a lifelong dream of running a business for the first time. In any event, there’s been a recent uptick in the number of people starting small businesses. Uncle …
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Retiring soon? 4 tax issues you might face

If you’re getting ready to retire, you’ll soon experience changes in your lifestyle and income sources that could have numerous tax implications. Here’s a brief rundown of four tax and financial issues you may deal with when you retire: Taking required minimum distributions. This is the minimum amount you must withdraw from your retirement accounts. …
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IRS guidance addresses accounting method changes by foreign corporations

In the recently issued Revenue Procedure 2021-26, the IRS provided guidance regarding accounting method changes made on behalf of controlled foreign corporations (CFCs) and, in some cases, other foreign corporations. Included in the guidance is an expansion, for a limited period, in the availability of automatic consent for CFCs to change their methods of accounting for …
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Tax changes are here — and more are likely to follow

By Christopher Davis, CPA To date, President Biden’s American Rescue Plan has been enacted and has changed various tax credits, including the child tax credit, earned income credit and the child and dependent credit.  The American Jobs Plan and The American Families Plan (not yet law) contain several proposed changes including: The increase of the …
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