Here we are in the thick of another tax season and tax professionals everywhere are bemoaning the standard litany of issues: unreconciled bank accounts, balance sheets that don’t balance, unfiled 1099s, etc. It doesn’t have to be this way, at least not for you and your clients. Tax season is actually the perfect time to review and/or set and implement best practices for tax and accounting compliance in your clients’ businesses—and yours. Physician, heal thyself.

The trick to any tax preparation or tax planning engagement is to do the work as if you would have to defend it in an audit. And when it comes to an audit, “Google said I could” is about as defensible as saying “I saw it on TikTok,” “I read it on Reddit,” “My cousin's friend said I could,” or the Twinkie Defense. What you need to defend in an audit and win is substantial authority (and really good books and records, but that is a topic for another day). This article provides some tips for conducting tax research that will get you to the authority you need.

The tax law disadvantages gamblers with its treatment of gambling gains and losses. Add that to the fact that gamblers often aren’t the best recordkeepers, and you have a recipe for years of overpaying taxes. How most tax professionals attempt to reconcile gambling reporting on the tax return can cost gamblers thousands of dollars a year in increased taxes and Medicare premiums (if over age 65). We’ll discuss how to calculate gambling gains on the tax return, which in many cases reduces or eliminates the excess taxes many gamblers could pay.

What is one thing that most business owners have in common? Why did you start your business? Many business owners I have talked to over the past decade started their entrepreneurship journey for similar reasons. Think about your clients and what reasons they have given you and see if these ring true. “I want to be in control of my time.” “I need to spend more time with my family.” “I don’t want a cap on my earning potential.” I find those to be pretty noble reasons. I haven’t come across a business owner yet that says, “I want to pay more taxes for fun.”. So as an advisor how can we help our clients have freedom, time with family, and save on taxes? One strategy is to hire family members. It can’t be any family member though, remember there is a strategy to this. I know some of you are thinking, “that sounds great!”. Then others of you are thinking, “who wants to work with their family?”. Well trust me, when saving money is the topic of discussion more people tend to listen. The least you can do is present your clients with the facts, and here they are: • The taxpayer can avoid paying certain payroll taxes by hiring a family member. • You can help them potentially drop a tax bracket while keeping the spending power in the family. • Protecting a spouse from tax debt. • Lower Federal student loan payments. To do this we have to make sure the client hires their family as employees. This whole strategy goes down the drain if the family member is a contractor that receives a 1099. Today we will focus on how to properly implement the game plan when hiring a parent or spouse.

January brought some new wrinkles. Even tax practitioners whose endeavors are far from Tax Court can find useful information there. My usual reminder: I cover Tax Court exclusively. Tax Court decisions get appealed routinely, and reversed sometimes, so check before citing as authority...

As you are in the heat of another tax season, probably without enough help, you don’t have time to study legislation especially proposed legislation prospectively effective in 2025 that is extremely unlikely to pass. But you may have clients or friends or relatives who expect you to know about this sort of thing. Fortunately, you have me who retired from active practice right at the end of 2018 and has time for this sort of nonsense. So here is more than you need to know about the proposed Fair Tax Act of 2023.

In society, bankruptcy no longer carries the humiliating stigma of failure ; which is why there are hundreds of thousands of bankruptcy filings each year. Interestingly enough, filings have been dropping dramatically since 2018. The total individual and business filings for fiscal year 2022 are nearly half of those from 2018. The statistics don’t include specific information about how much tax debt was extinguished in bankruptcy. Filing bankruptcy is not for everyone. It can be a viable option for those people whose tax debt meets certain criteria. The following is a basic overview of the concept...

Many taxpayers lost substantial amounts of money in the crypto collapse of 2022, but what tax consequences come with that loss? Taxpayers may be expecting to be able to deduct the full amount of their crypto losses, and may, unfortunately, find out it isn’t as straightforward as they would like...