Tax advisors are seeing more clients looking to claim an exclusion for Qualified Small Business Stock and expecting the gain to be 100 percent tax free. Can this be? Believe it or not, it very well could be, but nuanced criteria, not to mention the recently proposed amendment to IRC Section 1202 through the Build Back Better Act, make it a complex incentive to evaluate and monitor over time. In fact, QSBS gains haven’t always been 100 percent tax free. When introduced in 1993, QSBS started out as a 50 percent capital gain exclusion. The exclusion was increased to 75 percent in 2009, and increased to 100 percent in September 2010. Currently, the exclusion percentage is solely based on the date the owners acquired QSBS stock, but the proposed BBB amendment would additionally subject the exclusion percentage to the taxpayer’s Adjusted Gross Income (AGI), depending on a $400,000 threshold. The proposed language has accountants scratching their heads over the seemingly circular reference in determining what level of exclusion their clients would receive. As written, you need to know the QSBS exclusion percentage to calculate AGI, and you need AGI to know the exclusion percentage! Keep reading to learn how.
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As many of us become more accustomed to working from home, it is easy to forget that some industries were regularly working remotely prior to the COVID-19 pandemic. It might be easy to forget altogether that real estate businesses also qualify for the same deductions as other businesses. Yet, it is often easy to overlook something like a home office for a real estate rental operation, but the home office typically functions as the glue holding these businesses together. To learn more about the how and the where to grab this deduction, keep reading.
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Often, clients and potential clients grumble when their tax professionals recommend hiring a bookkeeping and/or accounting professional. Why? Because many people (including some tax practitioners) simply do not understand the miraculous complexity that is double-entry accounting. As some are probably aware, proper bookkeeping and accounting are much more than simply entering income and expenses into a software program. Nevertheless, it is sometimes difficult to explain the nuances of and the necessity for double-entry accounting to clients. Following are the specific circumstances under which clients should hire a professional bookkeeper and/or accountant. And remember, what works for clients also works for busy tax and accounting professionals. You may, after reading this article, decide that it’s in your own best interests to outsource your business’s tax and accounting work both for peace of mind and for time and money saved. So, when is it just good business to gently insist that your client hire an accounting professional? Keep reading to find out.
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Question: Bitcoin being treated as property by the IRS was partially related to not being “legal tender in any nation.” Does the fact that El Salvador is now using cryptocurrency have any cascading ramifications for tax/currency treatment of bitcoin in the U.S.? Answer: The Department of Justice recently issued a news release to strike terror in the hearts of anyone attempting to execute cryptocurrency tax shenanigans. Similarly, the federal court for the Northern District of California entered an order authorizing a John Doe’s summons on Payward Venture Inc. and subsidiaries d/b/a Kraken. The IRS wants to look at the records of U.S. taxpayers who conducted at least the equivalent of $20,000 in transactions in cryptocurrency during the years 2016 to 2020. What’s with all the sudden interest in crypto, and why are the feds looking to snoop around retroactively? If you’re curious to find out why and how to stay off its radar, keep reading.
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The only thing scarier than owing Uncle Sam a lot in taxes is being unable to pay the bill. Luckily, the Internal Revenue Service has ways for you to whittle what you owe. Just make sure which method works for you, depending on such factors as the size of your tax debt and what you can afford to pay and when. Don’t panic. Here’s how individual taxpayers can proceed – and what to watch out for.
Client acquisition is crucial for business growth in the fast-paced accounting world. However, retaining existing clients is equally important, if not more so. Servicing long-term client relationships is a testament to your firm’s reliability and is critical to sustained success. My first client is still with me, now more than seven years. Our relationship has grown and changed over time but has also strengthened.
Loyalty and commitment are two of my core values. I’m always looking to provide value to my prospects and clients to attract and retain them long-term. However, some clients do not fit those values, and I have decided to forgo working with them.
I believe that attracting and retaining the right clients starts with your mission, vision, and core values. However, it is also essential to have effective client retention strategies to ensure clients remain loyal and satisfied for the long haul.
With the rising cost of healthcare, our clients are looking to save money where they can, especially if they can save money on their healthcare costs and taxes at the same time. As their trusted advisor, you can offer them a basic understanding of what savings tools are available to your clients. Some of the tools available will come in handy if there is a minor unexpected tax bill this spring.
That is why today we’re going to look at the triple tax advantaged health savings account (HSA) and the health flexible spending account (FSA). We’ll look at what they are, who is eligible to open one, and how they can save your clients money each year.