This week, Samantha Meiners, Justin Steinbecker, and Aaron Bahr explain how you can use a Traditional IRA for last-minute tax-saving deductions this tax season.

February 28, 2023 / Samantha Meiners, Justin Steinbecker, and Aaron Bahr / Tax Tip Tuesday

This week, Donnie Damozonio explains some of the benefits of working with a CPA firm.

 

February 21, 2023 / Donnie Damozonio / Tax Tip Tuesday

This week, Donnie Damozonio explains how you can be a black belt in preventing financial scams this tax season.

 

February 14, 2023 / Donnie Damozonio / Tax Tip Tuesday

This week, Jessica Raymond, CPA gives examples of when you might need Fiduciary Accounting.

 

February 7, 2023 / Jessica Raymondt / Tax Tip Tuesday

This week, Kyle Hundt, EA breaks down 3 reasons why your refund is not as strong as last year.

January 31, 2023 / Kyle Hundt / Tax Tip Tuesday

This week, Jake Sullivan, Kyle Hundt, EA, Kelly Oliver, EA, and Abe Leis, CPA give 4 tips you can use when filling out your tax organizer.

January 24, 2023 / Kyle Hundt / Tax Tip Tuesday

This week, Cole Bay and Kyle Hundt, EA break the latest news regarding Edvest 529 college savings plan and Roth IRAs.

January 17, 2023 / Kyle Hundt / Tax Tip Tuesday

This week, Jessica explains 3 expenses people think they can deduct on their tax return, but wouldn’t make it past an IRS audit.

 

January 10, 2023 / Jessica Raymond / Tax Tip Tuesday

This week, Jessica helps you work out some tax strategies that you can implement in your New Year’s Resolution this year.

January 3, 2023 / Jessica Raymond / Tax Tip Tuesday

This week, Jessica explains why you should keep an eye out for Form 1099-K in your mail this January.

December 20, 2022 / Jessica Raymond / Tax Tip Tuesday

This week, Kyle explains the 10 types of employees who would qualify for the Work Opportunity Tax Credit.

In our previous tax tip Tuesday we outlined what the work opportunity tax credit is. Now we will outline the 10 types of employees that fit the criteria for work opportunity tax credit eligibility. Your new employee may qualify for work opportunity tax credit if they fit into one of the following categories:

1. Qualified IV-A Recipient
2. Qualified Veteran
3. Ex-Felon
4. Designated Community Resident
5. Vocational Rehabilitation Referral
6. Summer Youth Employee
7. Supplemental Nutrition Assistance Program Recipient
8. Supplemental Security Income Recipient
9. Long-Term Family Assistance Recipient
10. Qualified Long-Term Unemployment Recipient

May 17, 2022 / Kyle Hundt / Tax Tip Tuesday

This week, Kyle explains the Work Opportunity Tax Credit.

The work opportunity tax credit is a general business credit available for wages paid to certain individuals who begin work on or before December 31, 2025.

The Work opportunity tax credit may be claimed by any employer that hires and pays or incurs wages to certain individuals who are certified by a designated local agency as being a member of one of 10 targeted groups.

In general, the work opportunity tax credit is equal to 40% of up to $6,000 of wages paid to, or incurred on behalf of, and individual who

1). Is in their first year of employment.

2). Is certified as being a member of a targeted group.

3). Performs at least 400 hours of services for that employer.

May 10, 2022 / Kyle Hundt / Tax Tip Tuesday

This week, Kyle explains whether your business qualifies for the disabled access credit.

The disabled access credit provides a non-refundable credit of up to $10,000 for small businesses that incur expenditures for the purpose of providing access to persons with disabilities.

A business will qualify for the credit if they earned $1 million or less OR had less than 30 employees during the tax year. This credit can also be claimed each and every year the business incurs access expenditures.

May 3, 2022 / Kyle Hundt / Tax Tip Tuesday

This week, Kyle explains two ways to spend your cryptocurrency without incurring a tax debt.

The first way you can spend your crypto is to simply gift it. So let’s say your friend is getting married and as a wedding gift you send your friend 100,000,000 shiba inu. When you gift the 100,000,000 shiba neither you, the giftor, nor your friend, the giftee, will be taxed on the 100,000,000 shiba that is transferred on that day. However, in the event the 100,000,000 of shiba is worth an amount above the annual gift threshold, you may be required to report a gift tax return. As for your friend, they will not be taxed on the shiba until they sell or transfer it.

The second way you can spend your crypto tax-free is to donate it. This method is the most beneficial since you receive the double benefit of not having to report income on any gains you earned with the crypto plus you get the benefit of being able to deduct the fair market value of your charitable donation tax free. So if you decide to donate $5,000 worth of Cardano that you initially purchased for $1,000 you not only avoid being taxed on the $4,000 of gains but also get to deduct the $5,000 fair market value.

March 29, 2022 / Kyle Hundt / Tax Tip Tuesday

This week, Kyle explains last-minute tax deduction opportunities that are still available after December 31st.

The first deduction opportunity you may want to consider is if you are eligible to contribute to traditional IRA.

If eligible, you could contribute up to $6,000 towards a traditional IRA up until April 18th of 2022 and receive an income deduction for each dollar you contribute. Also, if you were age 50 or older at the end of 2021 you may be able to contribute and additional $1,000 on top of the $6,000 standard.

The second deduction opportunity is contributing to a Health Savings Account.

If eligible, you could contribute to up to $3,600 for a single health savings account plan or $7,200 for a family plan up until April 18th of 2022 and receive an income deduction for each dollar you contribute. Also, if you were age 55 or older at the end of 2021 you may be able to contribute and additional $1,000.

March 1, 2022 / Kyle Hundt / Tax Tip Tuesday

This week, Kyle explains what you need to know about the new IRS schedule K-2 and K-3.

On January 1st, 2022 Governor Tony Evers directed the Department of Revenue to revise Wisconsin’s withholding tax tables for the first time since the year 2014.

So, beginning with the 2021 tax year Partnerships and S Corporations will be using Schedules K-2 & K-3 to report partners or shareholders total distributive share of items with international relevance, including U.S. source income.

Since there is no way to describe these schedules in the typical tax tip Tuesday amount of time I figured I would just how you what a Schedule K-2 and K-3 look like in comparison to a Schedule K-1.

So, if you are the owner of a partnership or S Corporation the best thing you can do is just ask your accountant whether these schedules will need to be prepared with your 2021 tax return.

February 15, 2022 / Kyle Hundt / Tax Tip Tuesday

Here’s what you need to know about the Wisconsin withholding tax updates beginning in the year 2022.

On January 1st, 2022 Governor Tony Evers directed the Department of Revenue to revise Wisconsin’s withholding tax tables for the first time since the year 2014.

Under the withholding table changes, workers will begin to see less Wisconsin tax withheld from their paychecks.

Payroll providers and employers will be updating their payroll systems to accommodate these changes that began in 2022. So if you are employed in Wisconsin, hopefully you will notice little bit less Wisconsin income tax being withheld from your paycheck.

February 8, 2022 / Kyle Hundt / Tax Tip Tuesday

Here are the 3 reasons why your 2021 tax return’s refund might be less than your 2020 tax return’s refund.

Reason #1 – You may have paused making student loan payments in 2021 since that benefit still offered through 2021. If you took advantage of this you will lose out on the up to $2,500 deduction of student loan interest payments you would have otherwise paid.

Reason #2 – You may have claimed unemployment benefits in both years 2020 and 2021. In 2020 you were eligible to have a significant portion of your unemployment benefits not be taxable. However, in 2021 100% of your unemployment benefits will taxable.

Reason #3 – If you are a parent you may have received up to 50% of your child tax credit for the year 2021 starting in the summer of 2021 via monthly advanced child tax payments. What you are going to discover when you file your 2021 tax return is that those payments are going to reduce the total amount of credit you are eligible for by the amount of payments you already received.

February 1, 2022 / Kyle Hundt / Tax Tip Tuesday

Make sure to look out for IRS letter 6475 in January.

Letter 6475 will be a letter that the IRS will be sending out in January of 2022 that will provide the amount of the third economic impact payment you were issued in 2021. This will be a very important document to provide your tax accountant when you file your 2021 taxes.

In addition to IRS Letter 6475, please also make sure to look out for IRS Letter 6419 if you received any advanced child tax credit in 2021.

So please make sure to keep a copy of Letter 6475 and 6419 if you receive them so that you can provide those letters to your accountant for 2021 tax preparation.

January 25, 2021 / Kyle Hundt / Tax Tip Tuesday

Here are the important dates related to individual tax returns for the year 2021.

The first date is January 24th. This is the first date that individuals will be able to file their 2021 individual income tax returns.

The second date is April 18th. This is the deadline to file and make payments due for a 2021 individual income tax returns. This is also the last date to file a 2021 extension.

The third day is October 17th. This is the deadline to file individual income tax returns that have been extended.

January 18, 2021 / Kyle Hundt / Tax Tip Tuesday

Here’s what you need to know about the updates to the annual gift tax exclusion starting in 2022.

So for folks who don’t know what the gift exclusion is, it represents an amount of money that you can gift to someone during the year without having to file a gift tax return.

So beginning in the year 2022, the annual gift exclusion will increase from $15,000 to $16,000 per recipient. For married couples, this exclusion amount can be $32,000 per recipient. This is the highest gift exclusion amount ever.

January 11, 2021 / Kyle Hundt / Tax Tip Tuesday

Here’s what you need to know about the increased eligibility for childless workers to receive the earned income tax credit for the year 2021.

So typically for workers who do not have children it is very difficult to receive an earned income tax credit since the income phaseouts are too small. However, for 2021, the income phaseouts for childless workers are increased from $8,880 to $11,610. For married couples the phaseout increases from $14,280 to $17,550.

Also, for 2021 only, the minimum age of eligibility is reduced from 25 to 19 years old for most workers. For college students the minimum age of eligibility is 24 years old.

January 4, 2021 / Kyle Hundt / Tax Tip Tuesday

Here’s how to answer the question on your tax return that asks “at any time did you sell, send, exchange, or otherwise acquire a financial interest in any virtual currency”.

So the IRS guidance on this question is very limited. However, they have been able to provide the following guidance which is If your only transactions involving virtual currency were purchases of virtual currency with real currency, you are not required to answer yes to the Form 1040 question.

So if all you did was purchase a cryptocurrency with cash than you do not need to answer yes to that question.

December 7, 2021 / Kyle Hundt / Tax Tip Tuesday

Here’s what you need to know about the update to the premium tax credit computation for tax years 2021 and 2022.

This guidance is for individuals who currently receive a premium tax credit that reduces the amount of health insurance premiums they pay. This type of plan is sometimes referred to as an Obamacare plan or a health insurance marketplace plan.

For tax years beginning before 2021 or after 2022, the household income for your tax year may not exceed 400% of the applicable poverty line. So for those time periods if your income goes above the 400% poverty level you lose out on the entire amount of your premium credit. However, this 400% limit doesn’t apply for tax years beginning in 2021 or 2022. So if you have a marketplace plan and have a household income that exceeds 400% of the applicable poverty line for either 2021 or 2022, you may still be able to receive a premium tax credit.

November 30, 2021 / Kyle Hundt / Tax Tip Tuesday

Important Updates on the Employee Retention Credit (ERC) for the Fourth Quarter of 2021.

As a result of the infrastructure bill that was recently signed by President Biden the employee retention credit will be ending with the third quarter of 2021. Therefore, no employee retention credit will be allowed for the fourth quarter of 2021 and beyond.

However, congress did leave one exception for recovery startup businesses to be allowed to claim the employee retention credit for fourth quarter of 2021. If you are unsure of what a recovery startup business is you can check out my previous video on that.

November 23, 2021 / Kyle Hundt / Tax Tip Tuesday

Here are the 9 things you need to know when determining if your activity is a hobby or a business.To make it easier to identify if your activity is a hobby or a business the IRS offers these nine things to consider.

1. Whether the activity is carried out in a businesslike manner and the taxpayer maintains complete and accurate books and records.
2. Whether the time and effort the taxpayer puts into the activity show they intend to make it profitable.
3. Whether they depend on income from the activity for their livelihood.
4. Whether any losses are due to circumstances beyond the taxpayer’s control or are normal for the startup phase of their type of business.
5. Whether they change methods of operation to improve profitability.
6. Whether the taxpayer and their advisors have the knowledge needed to carry out the activity as a successful business.
7. Whether the taxpayer was successful in making a profit in similar activities in the past.
8. Whether the activity makes a profit in some years and how much profit it makes.

Whether the taxpayers can expect to make a future profit from the appreciation of the assets used in the activity

November 16, 2021 / Kyle Hundt / Tax Tip Tuesday

Here’s how to identify if a person who is calling you is an IRS representative or a scammer.

According to the IRS, there are special circumstances in which an IRS agent will contact you by telephone which include situations where you may have an overdue tax bill to secure a delinquent tax return or delinquent employment tax payment or to schedule a tour of your business as part of an audit or criminal investigation.

However, in each of those instances mentioned above, the IRS would have sent several notice letters prior to contacting you by telephone.

So if you receive a phone call from someone claiming to be from the IRS but haven’t received a stack of notice letters from the IRS prior to that phone call, you are most likely being scammed.

Also, the IRS will never call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card, or wire transfer.

November 9, 2021 / Kyle Hundt / Tax Tip Tuesday

Here’s how to report the sale of an NFT you purchased as an investor.

Currently, the IRS offers no guidance on how to report the taxes on an NFT sale. You can literally search their website for the terms “NFT” and “Non-Fungible Token” and you will find nothing. So in the absence of that information, most accountants are treating these sales similar to how cryptocurrency sales are treated. To illustrate this let’s look at this example:

So if you purchased a Bored Ape Yacht club NFT in April of 2021 for $186 in Ethereum and now plan to sell that same Bored Ape Yacht Club NFT for what is the cheapest price as of this recording of $130,171 you will have two taxable events to report.

The first taxable event is trading your Ethereum for the purchase of an NFT. This would be treated similarly to the sale of stock and taxed as a capital gain. So if your Ethereum was worth more than when you initially purchased it you will have a gain.

The second taxable event is selling your NFT for more Ethereum. When this occurs you will compare the amount your NFT was initially purchased for against the sales price to determine if you have a gain. This gain will likely be taxed as a capital gain but could be treated as the sale of a collectible if you held the NFT for longer than one year. The sale of collectibles currently has a tax rate of 28% whereas your short-term capital gain would be taxed at your ordinary-income rate.

November 2, 2021 / Kyle Hundt / Tax Tip Tuesday

Here is how long you need to keep your records relating to either your PPP loan or your ERC Credit.

If your business received a PPP loan in either the year 2020 or 2021 and had that loan forgiven by the SBA…the SBA recommends that your business retain all documentation and files relating to your PPP loan for a period of six years after the date the loan was forgiven.

Also, if your business claimed the employee retention credit in either 2020 or 2021 the IRS recommends you keep your records relating to the employee retention credit for a period of at least four years.

October 26, 2021 / Kyle Hundt / Tax Tip Tuesday

This is how you can take advantage of the updated income limit for charitable contributions.

The IRS has recently issued updated guidance on the maximum amount of charitable contributions that individual can donate and receive a tax deduction. Prior to the update, the maximum deduction allowed for cash contributions made to a qualified charitable organization was up to 60% of their adjusted gross income. For the year 2021, this deduction limit is now increased to up to 100% of an individual’s adjusted gross income.

Therefore, if you wish to make a very large charitable contribution in 2021 and want to get a very large tax benefit for it, consider making that contribution before the end of year 2021.

October 19, 2021 / Kyle Hundt / Tax Tip Tuesday

Here’s what you need to know about the once-in-a-lifetime $600 charitable contributions update.

The IRS has recently issued guidance that individuals can claim up to a $300 deduction for qualified charitable contributions regardless if they itemize or not. This deduction has been increased to a maximum of $600 for married couples who file jointly.

Please note that these updates are set to expire at the end of 2021.

Therefore, if you normally take the standard deduction on your tax return you should strongly consider making some charitable contributions before year end to take advantage of this once in a lifetime tax deduction opportunity.

October 12, 2021 / Kyle Hundt / Tax Tip Tuesday

Here’s how you can take advantage of the updated IRS rules on qualified educator expenses.

If you are an educator you are likely aware of the IRS rule which allows for up to $250 of educator expenses to be claimed as a deduction on your tax return. However, the IRS recently issued updated guidance that adds unreimbursed expenses related to COVID-19 protective items to their list of qualified educator expenses.

Such expenses are the following:

• • Face masks
• • disinfectant
• • hand soap
• • hand sanitizer
• • disposable gloves
• • and other items recommended by the CDC.

October 5, 2021 / Kyle Hundt / Tax Tip Tuesday

Here is how to identify what type of documents you will need to request from the IRS for a deceased person.

As Benjamin Franklin once said…the only two things certain in life are death and taxes. Therefore, it should be no surprise that even when your loved one passes away you may need to contact the IRS on their behalf.

To make it easier to gather information from or discuss issues with the IRS you will need the following items for the deceased individual you plan to represent:

1). A copy of their death certificate.

2). A Copy of a document issued by the court during probate of a decedent’s estate that grants you authority to represent the deceased

3). An IRS Form 56, Notice Concerning Fiduciary Relationship if there was no court proceeding for your decedent.

 

September 28, 2021 / Kyle Hundt / Tax Tip Tuesday

Here are 3 ways you can utilize a Roth IRA, instead of an Edvest, to save for your children’s college.

The benefits to contributing to a Roth IRA for your children’s college savings are the following:

1). You can withdraw your initial contributions at any time tax free.

2). You will not be penalized for early distributions from your Roth account provided they go towards qualified education costs.

3). Unlike Edvest accounts…If all the sudden your child decides they don’t want to go to college you will not be penalized for distributions that do not go towards qualified education costs. (provided you’re over the age 59 and ½ or have another penalty exemption)

 

September 14, 2021 / Kyle Hundt / Tax Tip Tuesday

Here is how to maximize your employee retention credit by including cash tips paid to your eligible employees in your calculation of qualified wages.

The IRS has provided guidance that cash tips are considered wages for purposes of reporting the employee retention credit.

So if you’re business is a restaurant or other service industry you may want to revisit your employee retention credit calculation to make sure you are including cash tips in your calculation.

Also, the IRS is allowing businesses to double dip by receiving both the tip tax credit and the employee retention credit.

 

September 7, 2021 / Kyle Hundt / Tax Tip Tuesday

This is how you can take advantage of the employee retention credit for the 3rd and 4th quarters of 2021 if your business qualifies as a recovery startup business.

The employee retention credit will be allowed up to a maximum of $50,000 per quarter for recovery startup businesses.

To qualify as a recovery startup business your business will need to have begun operations after February 15th, 2020 and have an average annual gross receipts less than $1,000,000.

If you think your business may qualify please contact myself or any member of our team to have a credit benefit analysis done.

 

August 24, 2021 / Kyle Hundt / Tax Tip Tuesday

Here’s how you can take advantage of the new 100% meals deduction available for both 2021 and 2022.

Starting with the year 2021, businesses will be able to deduct 100% of the cost of business meals. This deduction was previously only 50%. Please note that this is for meals served at restaurants versus prepackaged food bought at a grocery store.

 

August 24, 2021 / Kyle Hundt / Tax Tip Tuesday

This is how you can utilize the IRS website to check your refund status.

To access the refund tool you will first go to www.IRS.gov. From there, you will click on box titled “Get your refund status”. You will then be directed to the Where’s my refund?” page. On the “where’s my refund” page you will then click the box titled “check my refund status” to get the process started.

 

August 17, 2021 / Kyle Hundt / Tax Tip Tuesday

IRS Withholding Estimator – Tax Tip Tuesday

This is how you can utilize the IRS tax withholding estimator to verify if your payroll withholding is sufficient. .

To use this tool you will first go to www.irs.gov. Once you reach the home page you hover over the link that says “pay”. A series of options will then pop up. You will then choose from this list the link titled “tax withholding estimator”.

Once you arrive at the tax withholding estimator page you will then click on the box titled “use the tax withholding estimator” to get the process started.

 

August 10, 2021 / Kyle Hundt / Tax Tip Tuesday

Here’s what you need to know to utilize the IRS website to manage your 2021 advance child tax credit payments..

You can use this tool to:

1). Check if you’re enrolled to receive payments.

2). Unenroll to stop getting advance payments.

3). Update your bank account information for monthly payments.

To access the tool you will go to www.irs.gov and click on the link that says “get details on the advance child tax credit. Once you arrive at that page you will click on the manage payments box to get started.

 

August 3, 2021 / Kyle Hundt / Tax Tip Tuesday

Wash Sale Rules For Crypto Assets – Tax Tip Tuesday

If you’re planning to sell a cryptocurrency asset at a loss to offset gains that have been realized during the year, it’s important to beware of the “wash sale” rule.

A loss on the sale of a cryptocurrency, unlike the loss on a sale of stock, cannot be impacted by wash sale rules.

A wash sale occurs when you sell a stock and then buy that stock within 30 days of selling it.

The IRS currently does not allow you to report losses on wash sales of stocks, but do let you report losses on wash sales of crypto assets. This is because the IRS currently identifies crypto assets as commodities instead of securities.

 

July 26, 2021 / Kyle Hundt / Tax Tip Tuesday

Trying to save yourself time and energy? Make sure you’re utilizing your accountant to gather information from the IRS! This week, Kyle talks about the IRS Practitioner Priority Service.

The IRS has a practitioner priority line that is available for CPAs or Enrolled Agents.

Your accountant (provided they meet the IRS standards) can use this line to check the status of your refund, negotiate a payment plan, or resolve a tax notice you may have received.

 

July 20, 2021 / Kyle Hundt / Tax Tip Tuesday

This week, Kyle explains filling out your tax organizer prior to dropping it off with your Tax Accountant.

The process can be boring and sometimes confusing but the reward is worth the extra elbow grease.

Also, if you find a question in the organizer confusing just highlight that question and mention you would like to discuss it with your accountant. They will be happy to help!

 

July 13, 2021 / Kyle Hundt / Tax Tip Tuesday

This week, Kyle explains how to maximize the Child Tax Credit in 2021.

The child tax credit in 2021 will begin to be phased out for married taxpayers with an adjusted gross income over $150,000 (112,500 for heads of household, and $75,000 for all other taxpayers).

So if your AGI is somewhere near those levels then strongly consider lowering your income by contributing more to your employer’s 401k plan or explore funding a traditional deductible IRA.

 

July 6, 2021 / Kyle Hundt / Tax Tip Tuesday

Coming soon!

A new Tax Tip every Tuesday with Kyle Hundt.Your tax questions answered in under 30 seconds.

 

June 29, 2021 / Kyle Hundt / Tax Tip Tuesday