Guest Article

Value is in the eye of the beholder; or was that beauty? This is especially true for those infamous monkey portraits on the internet. Non-fungible tokens (NFTs) have exploded in popularity and can carry with them substantial tax consequences. Due to the volatile nature of the digital asset market and coupled with the lack of similar assets, it can be exceptionally difficult to determine the fair market value (FMV) of NFTs. Gift giving and donations can become much more complicated when NFTs are involved. New Fangled Technology For the noobs, an NFT is a type of cryptographic token that exists on a blockchain. As the name suggests, the tokens are not fungible, meaning each asset is unique and can't be interchanged for one another, the way that dollars or bitcoins can. Every NFT represents a unique asset with a unique value, however, determining what that value is can be quite difficult; The market for buying and selling NFTs can be extremely volatile. Some NFTs may quickly lose value or have no value at all. When a taxpayer donates an NFT to a qualified charitable organization as a way to reduce tax, the FMV is a required piece of information. To find out how to do this properly, keep reading.

You don’t have to be a tax geek to know the IRS has trouble picking up the phone. Old habits die hard. If you have a tax question, what do you do? You call the IRS. Good luck with that. You’ll be on hold for a long time if you can get through at all. The IRS initiated a call-back feature, but it’s not always available. The hold music is uninspiring; sometimes, after holding for hours, you get the dreaded “courtesy disconnect.” Yikes! Let’s face it. The IRS has a full plate; years of doing more with less have crippled the agency. Congress is quick to excoriate the IRS for poor service but keeps piling on more tasks (without necessary funding). Luckily, the IRS is working hard to provide more and better online applications and resources. There’s a lot out there, some well-known, some not so well-known, click here to take a tour and discover which shortcuts will help you most.

Office security. It’s for you and your small business clients. Sometimes small business clients who have relatively low-tech operations don’t think they need to think much about office security. That’s just not true. Almost every small business has some level of liability exposure for theft of client information or their own information (banking, credit cards, account passwords, etc.)—even businesses that don’t consider themselves “web based” or “high tech” may have client or company proprietary information they want to keep secure and private. Often business owners focus on cyber security (and with good reason). But a good, comprehensive security plan creates a safety triangle around important information and the property that holds it. The three sides of this triangle are cyber security, physical security, and (at the base of it all) operations security. Keep reading to secure your future!

A ROTH conversion can be a very powerful tool for your retirement. While you don’t receive a tax break for deposits to your ROTH account, qualified withdrawals from the account are tax-free, even earnings. This is an excellent way to avoid tax increases. Let’s say your taxes rise due to increases in tax rates, or because you earn more, which catapults you to a higher tax bracket, ROTH IRA conversions can save you a ton of money in taxes over the long term. The disadvantage, of course, is that tax is due on the amount you convert based on the value at conversion. But many times, such as when you are in a temporarily low tax bracket, have large deductions during the year, or in a year with business losses, can provide optimal opportunities to convert with little to no tax expense. Looking for more strategic times to convert? Keep reading to learn more.

In Part One of this series, we looked at strategies to reduce adjusted gross income (AGI). But the planning doesn’t stop there. We call deductions that reduce AGI “above the line” deductions. But wait, the tax saving opportunities don’t stop with AGI. Even with the higher standard deductions courtesy of the Tax Cuts and Jobs Act (TCJA), there are many opportunities for taxpayers of modest means to find “below the line” tax savings. Let’s explore the many ways you can reduce your taxable income and whether you maximize your tax benefits even more with tax credits. Keep in mind that a tax deduction reduces your taxable income A tax credit reduces your tax dollar for dollar and, in some cases, the credits are refundable, meaning you can get additional tax benefits even after reducing your taxable income to zero . Read on for some tax planning tips reducing taxable income and maximizing credits that may work for you.

It's hard to escape the news covering numerous methods high net-worth clients use to minimize their taxes. A ProPublica (June 8, 2021) headline trumpets, “The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax.” CNBC (September 20, 2021) highlights, “The wealthy may avoid $163 billion in taxes every year. Here’s how they do it.” Even Teen Vogue dives into the topic. If you're a taxpayer of more modest means, you may think, Hey, what about me? I can’t afford the team of high-priced tax advisers or consider many of these tax reduction techniques. Are there ways I can minimize my taxes that are legal, easy to implement, and affordable? The answer is a resounding YES. And how do I qualify? Read on for some tax planning tips that will work for you. Part One (of this two-part series) covers strategies to reduce your adjusted gross income.

Far too many of these Employee Retention Credit (ERC) claims are nonsense. Now don’t get me wrong. I enjoy helping businesses claim the ERC. I have written in these pages about the unique ways a business may qualify and how to use startup eligibility even for existing employers. But let’s be honest: People are manipulating this program beyond belief. The refund dollars are too attractive and have created far too large an incentive for shops charging high commission fees (I have seen fees charged between 10 to 35 percent of the refund). In the coming years, numerous aggressive ERC shops may contact you if they haven’t already. How do you know whether a claim is legitimate or nonsense? Here, we will review the most prevalent bad arguments to help you avoid trouble.

Do you ever feel like your inbox is out of control? Perhaps you even have more than one out of control inbox. Do you find yourself getting vapor-locked from information overload? Do you consider the phrase “inbox zero” and feel like it’s as achievable as driving to the moon? It’s time to work on that. An uncurated collection isn’t a collection it’s a hoard, and an uncurated information library isn’t a library it’s a digital fire hazard. Digital clutter can be as detrimental to your professional life as physical clutter is to your personal life. Before you start curating, however, I recommend giving some thought to how you want to go about it. For example, I have a work e-mail that is for clients to reach me that I only access when I am at my desk working. In general, my work e-mail is not the e-mail to which my subscriptions are sent—not even the tax-related subscriptions. My work e-mail is for clients only (and a few colleagues). That way, if I want to read tax news when I’m not working, I’m not distracted by e-mails from clients. At the same time, my tax news goes to a different inbox. My shopping ads go somewhere else as well. While I don’t recommend having one e-mail address for each type of communications, having a few different e-mail addresses (one for “work work”, one for work reading and networking, one for personal use and shopping) can help to create boundaries that will keep you from being distracted by work when you are trying to shop and vice versa. Once you have your various inboxes set up (or not), it’s time to take a cold hard look at all of that digital clutter. Let’s face it, most of us don’t read the consumer disclosures when we sign up for something or use a business’ website. Whenever you provide your e-mail address to a business or use their website your e-mail address is captured. Unfortunately, not only does the business with which you are transacting use that as consent to e-mail you, often the use disclosure includes authorization for the business to sell your data (either anonomized or not) to other businesses. That’s why when you order custom business swag from one company you are not only inundated with additional e-mail from that company but you start getting e-mail solicitations from businesses selling similar or complementary products and/or services. The same thing happens when you register for continuing education classes, enter a drawing at an expo using your business card, or join a professional organization. You start getting e-mail solicitations from that company, but if, or when, that company monetizes their e-mail list, your e-mail address is included. Yay! (Can you sense my sarcasm?) I read once that it takes an average of nine “touches” to convince a consumer to make a purchase. Unfortunately because e-mail is relatively inexpensive and easily automated, many retail businesses use it to make all of those touches. Between regular shopping, gift shopping, professional organizations, professional news, regular news, it’s really easy for the amount of e-mail into your various inboxes to get completely overwhelming in a short period of time. That’s why it’s just good business to spend some time once or twice a year curating your subscriptions! If the thought of trimming down your subscriptions gives you FOMO, keep reading for some tips and tactics to make sure you still get important notifications while eliminating the excess.