Question: How are you pricing Employee Retention Credit claims? Answer: The Employee Retention Credit (ERC) has seemed more confusing than some of the other tax credits simply because it was mostly ignored by the tax community early in the pandemic. While small businesses happily pocketed PPP funds rather than claim the credit, the choice between the two benefits was clear. As we now know, business owners can have both PPP loan forgiveness as well as access to the ERC tax credits. But many smaller firms and payroll processors felt overwhelmed by the demand, and with refunds taking months to process, some businesses are often looking for help on their own. So many new players have entered the game selling access to these credits, up to $33,000 in cash per employee. Firms selling R&D studies and cost segregation are advertising – hard. Most are charging a percentage of the total credit amount. You don’t want to miss out on this valuable service for your client to capture this free cash, yet many advisors are passing on this work due to the time, research, and education requirements for something that has such a short shelf life. Is it worth losing income to meet everyone’s needs? Continue reading to check out the results of a short survey asking tax pros how they are charging for this type of work.

Ever thought of using a recreational vehicle like a boat to lower your taxes? Yes, it’s possible using the right strategies, and there’s no time like the present to make that happen. Even more than pre-pandemic taxpayers may be considering buying their own island. Those for whom buying an actual island is beyond the budget may be considering buying a boat or an RV for use as a residence, an office, or both. Whatever the type of use, there are tax strategies available for boat owners if they meet the requirements. As with any tax strategy it is important to have a full understanding of the requirements to ensure the deduction is legal and to ensure the taxpayer can substantiate the deduction should the tax authorities examine the return. This is the first of two articles discussing the tax strategies available to boat owners. Part 1 focuses on using a boat as a residence, but if that doesn’t meet your needs, stay tuned because Part 2 will cover boats for business use (including as a home office). Why not consider both options and see how your tax savings can help fund your floating condo? Keep reading to learn more.

Looking to write off your favorite wine? Better yet, how about deducting it while lacking the receipts? For nearly a century, freewheeling salespeople, hobnobbers, and schmoozers alike have treated potential customers and employees to fine dining and entertaining all while seeking the maximum tax break in the process with minimal substantiation. While proving these expenses has certainly gotten easier with technology, smart planners have made use of the so-called Cohan rule to enjoy the deductions without the paperwork nightmare. Want to make use of it yourself? Read on to learn more.

Ever thought of using a recreational vehicle like a boat to lower your taxes? Yes, it’s possible using the right strategies, and there’s no time like the present to make that happen. Even more than pre-pandemic taxpayers may be considering buying their own island. Those for whom buying an actual island is beyond the budget may be considering buying a boat or an RV for use as a residence, an office, or both. Whatever the type of use, there are tax strategies available for boat owners if they meet the requirements. As with any tax strategy it is important to have a full understanding of the requirements to ensure the deduction is legal and to ensure the taxpayer can substantiate the deduction should the tax authorities examine the return. This is the first of two articles discussing the tax strategies available to boat owners. Part 1 focuses on using a boat as a residence, but if that doesn’t meet your needs, stay tuned because Part 2 will cover boats for business use (including as a home office). Why not consider both options and see how your tax savings can help fund your floating condo? Keep reading to learn more.

Question: Is it possible to qualify for both PPP forgiveness and COVID-related tax credits? Answer: The short answer, of course, includes, “it depends.” We were fortunate that the Consolidated Appropriations Act passed in December 2020 made it so that businesses that received PPP loans may now be eligible for the Employee Retention tax credits retroactively. The tax credits are great – a dollar for dollar reduction of tax, and for 2020 the value is up to $5,000 per employee! It is a credit against the employer’s share of the Social Security tax, but it is refundable, so if the amount of the credit is more than the tax, you’ll get free cash from the IRS. In addition, we’ve discussed previously in Think Outside the Tax Box about paid leave tax credits and even how to get them if you are a small business. These credits are also applicable even if you received PPP forgiveness provided you otherwise qualify. Here’s where it gets complicated. You can stack the benefits, but you can’t double dip. While no one likes a double dipper at the snack bowl (especially during COVID) there are ways to get the benefit from forgiven PPP funds and tax credits allowing you to have your chips and “dip” them too. Keep reading to learn how to legally take these benefits.

Looking to save money by moving to a low tax state? If so, determining how much you will save in taxes by moving is a question many people are often asking that doesn’t have a simple answer. Many people miss out big time because they simply think about state income taxes. However, there are so many other types of taxes that can be just as important when thinking about moving to a new state. Simply because a state has low (or no) income taxes doesn’t necessarily mean it’s a low overall tax state. Other taxes such as sales tax, payroll tax, and property tax can have just as big an impact on your taxes as the traditional income tax. Don’t get hit with unexpected “stealth taxes,” when moving to a low tax state, while state tax free states are great, out of the seven states without an income tax, three are not in the top 10 lowest tax burden states. Keep reading to learn how to choose the lower tax places to live.

Jack Sprat did pay no tax. His wife paid all of hers. But when they filed a joint return, She learned she owed all of his! This is the heart of the innocent spouse! The innocent spouse filed a joint return with a balance due – but didn’t really create the tax obligation. S/he did everything right, paid all the proper withholding or estimated tax payments. Yet, s/he suddenly finds out that the spouse has a balance due and doesn’t have the money to pay it all.

Question: Do I need to have my LLC hold the title to my rental property to get the tax benefits? Answer: If you’re like most investors, you probably purchased your rental property in your own name. While this doesn’t keep you from accessing all the special tax breaks available with owning real estate, it does expose you to some risky liabilities. Insurance can cover a lot of predictable liabilities like slip and falls, theft, and vandalism, but there are many other things that can happen putting not only the property at risk but also your personal assets. One way to protect against this risk is by using an LLC to hold your property. Most LLCs act like a corporation in providing limited liability protection against creditors for your personal assets and your other non-real estate business activities. Like most things in law, changing the deed can lead to a whole set of problems. So be sure to think twice before changing your deed. There are two key problems this action can cause you as the property’s owner. Keep reading to learn how to overcome them.