Feature Article

The IRS loves to issue cryptocurrency guidance when it’s the most inconvenient for me personally. I’m not sure how they accessed my calendar, but it certainly feels like this one was intentional. I was at a tax conference over the summer to teach an introduction to crypto class immediately after lunch. I had just finished eating when my phone started blowing up. The IRS published a new Revenue Ruling on Staking, 45 minutes before I was to teach about it. I read the six-page document, tried to digest it, and considered how I needed to adapt my material on the fly. Another frequent (but not to be named) Tax Box contributor present at the conference teased me about the situation I found myself in. The class went fine, though, because even with a surprise ruling, the IRS didn’t really say anything surprising. In typical IRS fashion, it also created more questions than it answered.

The astronomical costs of a disability can extend beyond extra therapy and special equipment to, potentially, a lifetime of lost earnings. There is some help. The federal government has tax deductions and credits connected with raising a child with special needs, for instance. And though historically a trust has been only financial avenue to care for a disabled loved one, another vehicle is gaining traction. Many tax and financial moves in this area come down to one question that’s unique to this planning: Will money interfere with a disabled person’s ability to get indispensable government benefits?

What is a personal brand? If you asked me that question in 2018, I would not know how to answer it. As I embarked on my journey to entrepreneurship, I took on any accounting-related project that came my way. I had yet to learn about the meaning of a personal brand. Fast forward to 2020, I launched my CPA firm just before the COVID shutdown. While established CPA firms could sustain or pivot to new services, I still had to figure out how to get clients, build my online presence, and establish trust to create my brand. I learned on my journey that in today’s competitive landscape, a personal brand has become more critical than ever. Professional success is directly related to one’s brand, especially in service-based industries such as accounting. Surveys show that more business owners and young entrepreneurs are looking for accountants they can rely on for not only their technical skills and qualifications but also for a personal connection. Therefore, creating a solid personal brand distinguishes accountants from the rest of the crowd, enhances their credibility, fosters loyalty, and opens doors for new opportunities. I will share my experience, dive into the significance of a personal brand for accountants, and provide actionable strategies to help you build a solid personal brand that resonates with your target audience.

The vast range of taxable income and possible deductions and credits an individual may have for federal and state purposes creates a sizeable list of questions to ask clients annually. Regarding types of taxable income alone, the possible sources are almost too numerous to ask. So, is it enough for practitioners to ask for information reporting forms plus a general question about other sources of income? In 2021, the IRS expanded Schedule 1 (Form 1040), Additional Income and Adjustments to Income, changing line 8, “Other income. List type and amount” to lines 8a to 8p to highlight 16 specific types of “other income” with line 8z added for reporting any other income types. One of the specific income types at line 8b is for gambling income. Possibly the detailing of the Form 1040 other income line starting in 2021 signals that the IRS wants self-filers to be aware of what is taxable and that tax preparers should ask clients more questions. In addition to reviewing the tax rules for casual gamblers, two Tax Court bench opinions issued this year are to highlight recent gambling issues the IRS found. The opinions explored the tax gap from gambling activities along with its relevance to due diligence considerations for individuals and tax advisers.

Yes, another ChatGPT article. Or GenAI, really. Okay, I saw you roll your eyes. Well, not "saw" per se, but I felt it allllll the way from over here. But honestly, this is for your benefit, not mine! I've already figured out a ton of ways to use it to make my life easier. Yes, that's right, it's made my LIFE easier, not just work. I'm happy to share a little bit about it if you're interested. Also, before you say (again), "ChatGPT can't do tax returns or tax research. It's a useless piece of technology," - I get it! So much of what we focus on in our practice is the actual work parts. But we are far more than just tax compliance. Or at least we want to be. Okay, think about it this way - why did you become a tax practitioner? Was it because you wanted to help people? Or was it because you thought, "Oh boy, I sure love to just crank out tax returns for 80 hours a week, three months a year!" I'm guessing it was the former! And I don't know about YOUR tax practice, but mine has gotten far more complicated in the last... 20 years? Let's think about all of the changes that have happened in just the last five years? (Okay, yes, that's cheating, but I'm going to do it anyway). We've had TCJA, SECURE, CARES, SECURE 2.0, and probably half a dozen more, in addition to new regulations, case law, IRS pronouncements, state tax law changes, etc. And that's JUST with the tax law. In your practice, consider all of the things that have changed and gotten more complicated. Hybrid and remote work, finding employees, ever-expanding technology stack, one of those fancy new espresso machines with too many buttons, going paperless but still having at least five clients that mail you their documents, trying to determine a niche to offset the additional complexity, figuring out how to market to that niche... And on and on and on. So, my question would be - why WOULDN'T you want to use tools like ChatGPT to offload some of the work? GenAI came along just in time to address a lot of these issues. And I get it, it's hard to see that the pot is boiling when you're the frog in the soup, but let me tell you - the pot is boiling. Let's get you out of there!

The Treasury Department offers two types of federal savings bonds, Series EE and Series I, for individuals and businesses to invest in cash savings. Until 2021, federal savings bond rates were low; however, with the dramatic increase in inflation and interest rates, interest in federal savings bonds as a savings vehicle has skyrocketed. For example, in May 2023, TreasuryDirect issued $230 million in I bonds in that one month; in May 2020, only $13 million were issued. Federal savings bonds have very favorable tax features. At the federal level, the interest earned is generally tax-deferable and sometimes entirely excluded from tax. At the state level, the interest is always entirely excluded from tax. This article will review the differences between Series EE and Series I savings bonds and the tax savings opportunities available to owners of these bonds.

The tax research process continues to grow increasingly complex for numerous reasons. This article notes several of these reasons and offers tips for your tax research process to be sure you have the latest appropriate guidance for answering tax questions and taking properly supported positions on tax returns.

Question: I have several long-term clients I’ve advised they didn’t qualify for ERC under the requirements. I’ve discovered over time that all three were sold by an ERC mill and filed amended tax returns to claim credits. What are the risks they will be audited and what are my responsibilities in representing them? Should I release them as clients because they didn’t listen to me? Answer: You know, the Employee Retention Credit (ERC) might sound like a pretty sweet deal, especially if your business took a hit during the pandemic. It's a tax break designed to help you out. But don’t be fooled. It's not as simple as it sounds. You need to know the ins and outs before you jump in. Some new kids on the block, a bunch of specialist firms, are offering to help businesses claim this ERC. Unless you’ve been trapped in a cave (or under a pile of tax files) you’ve probably seen the mail, heard the commercials, clicked the ads. They make it seem so easy, don’t they? Just let us take care of everything and ignore the rules. This is music to the ears of employers – especially if we’ve already told them based on the rules, they don’t qualify. We want our clients to know they gotta be careful. These mills may promise you the moon and the stars, but the reality is, there's a pretty tight rule book on how and when you can claim the ERC. Misunderstanding these rules could mean you lose out on a potential $26,000 tax credit per employee. Worse, you could be tricked into claiming money you're not actually entitled to and end up with a nasty surprise later. And when you factor in the steep fees charged by these fly-by-nights, often up to 30% of promised refunds - there is a real risk of loss should these businesses lose their claims.