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TO REDUCE TAX?
New tax reduction strategies carefully explained and exhaustively researched every two weeks. Receive breaking news updates on tax law changes. Members only monthly AMA with TOTTB.tax.
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FEATURED CONTENT
Can I Double Dip? Qualifying for Both PPP Forgiveness and COVID-related Tax Credits
Question: Is it possible to qualify for both PPP forgiveness and COVID-related tax credits? Answer: The short answer, of course, includes, “it depends.” We were fortunate that the Consolidated Appropriations Act passed in December 2020 made it so that businesses that received PPP loans may now be eligible for the Employee Retention tax credits retroactively. The tax credits are great – a dollar for dollar reduction of tax, and for 2020 the value is up to $5,000 per employee! It is a credit against the employer’s share of the Social Security tax, but it is refundable, so if the amount of the credit is more than the tax, you’ll get free cash from the IRS. In addition, we’ve discussed previously in Think Outside the Tax Box about paid leave tax credits and even how to get them if you are a small business. These credits are also applicable even if you received PPP forgiveness provided you otherwise qualify. Here’s where it gets complicated. You can stack the benefits, but you can’t double dip. While no one likes a double dipper at the snack bowl (especially during COVID) there are ways to get the benefit from forgiven PPP funds and tax credits allowing you to have your chips and “dip” them too. Keep reading to learn how to legally take these benefits.
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CURRENT EDITION
Editor’s Pick: The Future of Digital Product Taxation—What Tax Professionals Need to Know
As states increasingly focus on taxing digital products, tax professionals need to be aware of how these changes will affect their clients and businesses. The Multistate Tax Commission (MTC) is at the forefront of efforts to create more uniform approaches to taxing digital goods, and their proposals could have far-reaching consequences for compliance, pricing strategies, and audit risks. Here’s a breakdown of the major proposals under consideration and how they will impact sellers of digital products—and the tax professionals advising them.
Striking a Balance: Pitching to the Umpires of Tax Law – Understanding US Tax Court Judges through the Art of Baseball Analogies
In this fascinatingly original article, we explore the striking parallels between America’s pastime and the high-stakes world of tax litigation. Prepare to be surprised as we reveal the hidden connections between the umpires of the diamond and the judges of the Tax Court. From the precise strike zones of regular judges to the veteran expertise of senior judges, and the specialized skills of special trial judges, you’ll gain a newfound appreciation for the officials who keep the game of tax law fair and balanced.
Dodging the IRS Penalty Flag: Avoiding the Accuracy-Related Penalty
A penalty specifically for taxpayers who have made a mistake on their return. That’s how I explain the accuracy related penalty to taxpayers. This penalty carries a punch as well, with 20% of the tax the IRS didn’t receive due to the taxpayer making a mistake. This seems harsh out of context. The reason for this harshness is because the IRS considers these “mistakes” to be intentional due to taxpayer negligence. This is one of the reasons at my firm that we encourage our clients to take their time when filling out the intake form and gathering their documents. Omitting an income document can be costly in the end to both you and your client. The IRS will hit your client with penalties that they could have avoided, and you may compromise the integrity of your firm.
SIMPLIFIED TAX STRATEGIES &
PRACTICAL IMPLEMENTATION
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.
