It happens all the time. A client comes in with the receipt for their new hybrid or electric vehicle and is expecting a huge tax credit to offset some of the purchase expense. It’s a fact that hybrid and electric vehicles cost more (some estimates say an average of $19K more) than their internal combustion engine (ICE) based counterparts. And, despite the fact that hybrids and fully electric vehicles continue to gain market share, it has continued to be difficult to quantify exactly how much fuel and maintenance cost savings offset the larger price tag. Often, the time span for offsetting the difference in purchase price is much longer than many taxpayers want to keep their cars. Taxpayers often hope tax credits will help them to recoup the difference in purchase price more quickly than fuel and maintenance cost savings. Do they? Are electric vehicle tax credits really worth it? Well—it depends.
December 15, 2020
More Cash Available for Employers Under Refundable Tax Credit
As 2020 winds to a close, we have seen many beneficial programs provided by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the Families First Coronavirus Response Act (FFCRA). While most media coverage has focused on loans to employers such as PPP and EIDL, it is important to remember some of the lesser covered programs also included in the tax relief programs. In fact, eligible businesses may qualify to get cash back in some instances. The employee retention credit (ERC) under the CARES Act offers a refundable payroll tax credit for certain wages and health plan expenses paid by businesses during the economic hardship. However, many business owners have uncertainty as to how to qualify when they have also received a PPP loan. The paid sick leave and paid family medical leave credits also offer a refundable tax credit for qualifying wages and Medicare tax and health plan expenses. These refundable tax credits are stackable for maximum benefit when used correctly. Read on to discover how to qualify.Read More
Year-End Tax Strategies for the Investor
The end of the year is a time for holidays, family, and maybe overindulging at the dinner table. It can also be a time for substantial tax savings. There are many techniques a taxpayer can use to minimize their tax burden for the year. The key to many of them is acting before the calendar year comes to a close. Specifically, let’s examine tax strategies for the taxpayer with investments, such as stocks, bonds, and mutual funds. These strategies can help taxpayers lower taxes, keep more money in their pockets, and donate to their favorite charities.Read More
Can I “Nominee” Income From a Schedule C to Another Return?
I have a few physician clients who earn their income via Form 1099 and are perfect candidates for an S corporation. However, the hospital won’t issue the Form 1099 in the name/EIN of an S corporation. Is this an issue? Can I still report the income on the Form 1120S and report the Form 1099 on a Schedule C with a negative adjustment for the same amount and attach an explanation annually? Or is there any other way?Read More
COVID Tax Relief Allows Companies to Make Tax-Free COVID-19 Payments to Employees
For a business owner, almost nothing in life is more uncertain than running a company during a pandemic. Like most people, worry about your own livelihood, family, friends, and loved ones and how you’ll cope during COVID-19 is at the top of your mind. But unlike others, you’ve got the added concern about your employees – both for their health and safety, as well as their financial health. While the government made some relief available in the earlier days of the pandemic such as forgivable loans like the Paycheck Protection Program (PPP) and Emergency Injury Disaster Loans (EIDL) one of the biggest benefits provided has to do with a little known tax provision to the tax law. This provision makes it possible to provide certain payments without tax during a terrorist attack or disaster, but if it weren’t for a certain interpretation of President Trump’s declaration in March 2020, this benefit wouldn’t exist for COVID-19.Read More