Articles Archive - Page 21 of 59 - Think Outside the Tax Box

Tax Planning for Gig Workers

Avoid Surprise Tax Hits When Using a Corporation for Your Business

Leave a Comment / By Thomas Gorczynski, EA USTCP CTP

Many taxpayers use S corporations (governed by Subchapter S of the Internal Revenue Code) or C corporations (governed by Subchapter C of the Internal Revenue Code) to legally reduce income taxes, payroll taxes, and self-employment taxes for their business.

However, without careful planning, a taxpayer may have a surprise tax bill from using a corporation for federal tax purposes.

This article will tell you when these unexpected tax hits can happen and how the taxpayer can avoid them with proper planning.

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Is the Augusta Rule a Tax Haven or a Ticking Time Bomb? New Tax Court Memo Cautions Users

Leave a Comment / By Dominique Molina, CPA MST CTS

Sure, the Augusta Rule can be a game-changer for your finances—but only if you tread carefully. Get one element wrong—be it your business structure, purpose, or documentation—and you could be inviting the taxman to your doorstep. And don’t even think about going it alone; if your tax pro isn’t well-versed in this complex write-off, you’re essentially rolling the dice on an audit nightmare.

The Augusta Rule has lately become the talk of the town on TikTok’s tax scene, capturing the attention of both amateur bloggers and seasoned tax experts. In this article, we’ll demystify what the Augusta Rule really entails, identify who stands to benefit from it, explore legal ways to leverage it, and highlight potential risks you should be aware of.

First, let’s delve into its fundamentals. Read on to find out how to navigate this high-stakes tax strategy without detonating your financial future.

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Why Tax Planners are Turning to ELI5 – The Results Will Amaze You!

Not Another ChatGPT Article…

Leave a Comment / By Ashley Francis, CPA

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!

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Pizza Party in the Metaverse

Leave a Comment / By Matt Metras, EA

I love pizza. No, like I really love pizza. I have a pizza tattoo. I’m a member of the Rare Pizzas DAO. It is my go-to meal whenever the question “What’s for dinner?” gets asked. There really isn’t a better combination of cheese and deliciousness in the world. At least not in the flesh and blood “real” world. Loving pizza that much can clearly get oneself into trouble. I just never expected it to be tax trouble.

Enter the “metaverse,” although I’m not sure if that is metaphorically or digitally. The metaverse is a term used to describe many digital environments that contain aspects of online gaming, virtual reality, social networking, and cryptocurrency. Generally, a metaverse is a fully immersive digital universe which combines elements of augmented reality, virtual reality, and the internet to create a seamless and interconnected space where users can explore, create, and engage with others in a virtual world. In the metaverse, users control an avatar, which represents the user in the digital universe and functions similar to a video game character. Avatars can be customized and accessorized with clothing and other items represented in the metaverse through NFTs.

The metaverse holds the potential for new forms of entertainment, communication, commerce, and social interaction on a global scale. The metaverse economy is based on digital assets, making it possible for taxpayers to engage in a substantial number of taxable transactions without realizing it. And herein lies the crux of our problem.

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