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.

You have put blood, sweat, and tears into your business and the hard work has finally paid off. Unfortunately, all the success may result in a significant tax bill for family members and very few resources available to pay it. Without an alternative, your business could end up on the chopping block for a fraction of what it is worth. It doesn’t have to be that way! Careful estate planning can result in: 1. Minimization of estate taxes 2. Generation of needed liquidity to satisfy estate expenses Continue reading to learn more!

Being a shareholder owner of a C corporation comes with certain benefits, including the ability to take cash from your business. How to do so depends on your short- and long-term goals and consideration of the tax trade-offs. This article will discuss the options available to shareholder owners, other than borrowing, to realize cash from a corporation that is expected to continue.

The Employee Retention Credit (ERC) was probably the ugly step-child of the CARES Act. It received very little attention from tax practitioners, because participation in the Paycheck Protection Program (PPP) precluded ERC. The Taxpayer Certainty and Disaster Tax Relief Act changed all that. This good news to you as a business owner threatens to overwhelm smaller tax firms, some of which might leave a valuable service to be performed probably less than ideally by the sorts of firms that sell R&D studies and cost segregation. They are already advertising. To avoid missing out on this valuable service for your client or to capture this free cash for yourself as a small business owner, keep reading.

Question: Can I still deduct self-employed health insurance if my spouse has insurance through their employment? Answer: You may potentially qualify for the deduction even if your spouse has insurance through their employment. Healthcare costs seem to be always on the rise, and if you’re self-employed if can be tough to find an affordable option for a single participant plan. The good news is, the Self-Employed Health Insurance deduction provides an “above the line” write-off helping you not only save tax through a lower taxable income, but it also helps to slash your Adjusted Gross Income (AGI). Lowering your AGI also helps mitigate the disadvantages of AGI based tax laws. For example, some itemized like medical expenses and charitable contributions can be hampered by the amount of your AGI. In other words, AGI determines how much of certain deductions and tax credits you can take. There are three steps to qualifying for this deduction including some special provisions that let you sweeten the deal. Did you know you can even write off dental and long-term care insurance as self-employed medical expense? You can! Here’s how to get even more write-offs if you’re self-employed.