Business Strategies

Just Good Business – Review Your Administrative Compliance

Tax season is in full effect, and it is likely that you are seeing and coping with the effects of poor administrative compliance on the part of your small business clients. Instead of bemoaning the fact that so many clients “don’t get it” use some of the time you’re spending on the return to prepare a list of administrative compliance items that the client needs to address. Then, set a (paid) planning appointment for later in the year to help the client address those items. If you do this, and if the client heeds your advice, next filing season more (if not always all) of the client’s administrative compliance will be in order by the time you start preparing their returns. It’s a win-win. Your client gets the opportunity to ensure that they are meeting administrative requirements that protect them from liability or penalties. You get cleaner paperwork (and peace of mind) moving into next filing season. Read on to learn more!

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Think Outside the Tax Box provides tax reduction strategies along with practical implementation advice in order to reduce your clients’ federal tax bill with ease.

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CURRENT EDITION

Divorce and Taxes

Timalyn Bowens, EA

“Timalyn, Alyssa and I filed for divorce, and we will finalize everything before Thanksgiving. Does this change things for our taxes?”

“No! Can we wait until January 1?” were my initial thoughts. But then I realized that if this news blindsided me, the seemingly happy couple was probably also scrambling for answers. They were looking to me to be calm during an upcoming storm.

To give you some context, I had helped this family lower their back taxes by $16,000 and get a payment plan that worked well with their cash flow. Then, by implementing a few strategies they had just saved an extra $20,000 on their last tax return. We were planning on saving them even more money in upcoming years.

Then, that is when it happened. Divorce.

I never saw this happening, so I never prepared for it. But if it happened to me, it will happen to you. Clients divorce.

Some of the things we are going over today may seem obvious to you. But remember what is obvious to us as tax experts is not obvious to our clients, especially if they are going through a life-changing event such as divorce.

Here are four things you need to inform your client about when it comes to their divorce and taxes…

Facts, Circumstances, and Forever Stamps

Amber Gray-Fenner, EA NTPI Fellow USTCP

The price of a forever stamp increased from $0.58 to $0.63 on January 1, 2023. A tax pro posted this fact as a public service announcement on Facebook. Of course, tax pros being tax pros, someone chimed in, “Do I have to recognize a capital gain upon disposition of my forever stamp?” And of course, someone (me) felt obliged to answer, “It depends.” A direct message followed this bit of tax drollery on Twitter that says, “In theory, if I’m holding stamps as an investment, they would be a capital asset.” And so it begins…

Crypto Charitable Deduction Compliance – Mission Impossible?

Peter J Reilly CPA

Reilly’s Fourth Law of Tax: “Execution isn’t everything, but it’s a lot” might be amended when it comes to charitable deduction of property, because there you have an area where execution is almost everything. It is also an area that dramatically illustrates the Seventh Law: “Read the instructions.”

In January, we received guidance from the IRS on the reporting requirements for charitable contributions of crypto currency . If you have followed IRS guidance on crypto and know something about charitable donation reporting requirements, the result shouldn’t surprise you , but maybe it will.

The most disturbing part of the story is that the IRS may be asking for something we can’t provide…