Good news! Food and beverages are still 100% deductible expenses in 2021 and 2022. This temporary deduction was designed to help the hard-hit restaurant industry recover from COVID-19 pandemic closures. But like all things IRS, there are caveats. Entertainment expenses, like tickets to a show or sporting event, are still non-deductible. Also gone are charitable deductions […]

Good news! Food and beverages are still 100% deductible expenses in 2021 and 2022. This temporary deduction was designed to help the hard-hit restaurant industry recover from COVID-19 pandemic closures.

But like all things IRS, there are caveats. Entertainment expenses, like tickets to a show or sporting event, are still non-deductible. Also gone are charitable deductions for ticket purchases to a college’s athletic events, but you can deduct the meals consumed at these events if you separate the receipts.

Team-building outings, including the purchase of tickets for your staff, are allowed and 100% deductible. The tax code states that “expenses for recreational, social, or similar activities (including facilities therefore) primarily for the benefit of employees” qualify for the 100% deduction.

High-end restaurants and beverages, including alcohol, do qualify for the 100% deduction for business purposes. De minimis fringe benefits like in-office coffee and snacks do not fall into the category of meals and are still only 50% deductible.

That said, if you have expenses abnormally higher than last year, this could trigger a red flag. Although your tax preparer may not need a copy of your dinner receipt, the IRS states that you must keep a record of your receipts and document the attendee’s names, business, and dates in case of an audit. You’ve been warned.

Still, for businesses both small and large, the 100% food deduction is a great reminder that’s we are back to in-person networking and events. And that’s good news, too!

Cryptocurrency is considered “”property”” for federal income tax purposes, meaning the IRS treats it as a capital asset. This means you pay the same taxes you may owe when realizing a gain or loss on the sale or exchange of a capital asset. Only how you report that has been a challenge, until now. Thankfully, […]

Cryptocurrency is considered “”property”” for federal income tax purposes, meaning the IRS treats it as a capital asset. This means you pay the same taxes you may owe when realizing a gain or loss on the sale or exchange of a capital asset. Only how you report that has been a challenge, until now.

Thankfully, the IRS made several updates and additions to Form 1447, including an expanded section for reporting virtual currency. Plus, the new form also includes a penalty structure for employment tax and estate and gift issues, along with a new checkbox for inability to pay in full.

Here’s what to keep in mind:

Calculating Taxes When You Buy and Sell Cryptocurrency: When you buy and sell cryptocurrency, comparing your net proceeds to your cost basis isn’t the only step in figuring how much you owe in crypto taxes. Also, the length of time you held the asset may further determine the type of capital gain or loss you recognize.

Short-Term Capital Gains and Losses: When you buy and sell an asset within a 365-day period, you recognize either a short-term capital gain if it sold for more than what you paid for it or a short-term capital loss if it sold for less than what you paid for it. Short-term gains and losses are subject to the same tax rates you pay on ordinary income, such as wages, salaries, commissions, and other earned income. The IRS has seven tax brackets for ordinary income ranging from 10% to 37% in 2021.

Long-Term Capital Gains and Losses: If you buy an asset and sell it after one year, the resulting difference between your net sales proceeds and your cost basis is a long-term capital gain or loss. Typically, you’ll pay less tax on a long-term gain than on a short-term gain because the rates are generally lower. Currently, there are three tax rates for long-term capital gains—0%, 15%, and 20%; the rate you pay will depend on your income.

Tax season is still getting shot in the arm (pun intended) by pandemic legislation, most notably the Paycheck Protection Program (PPP) loans. If your business participated in the PPP, you’ve likely been unsure about how to account for PPP loan forgiveness income on your tax return. Did your loan forgiveness occur when you paid the […]

Tax season is still getting shot in the arm (pun intended) by pandemic legislation, most notably the Paycheck Protection Program (PPP) loans.

If your business participated in the PPP, you’ve likely been unsure about how to account for PPP loan forgiveness income on your tax return. Did your loan forgiveness occur when you paid the required expenses, when you submitted your loan forgiveness application, or when the government formally approved the loan forgiveness application? Recently, the IRS provided guidance on this debate, and taxpayers can choose any of these options.

As a reminder, in December 2020, the IRS announced that any eligible expenses you paid with money from those PPP loans can be deducted from your taxable income. And because PPP ended in May 2021, those deductions can be applied to this tax season. Examples of which include rent/lease payments, business utility payments, covered property damage costs, and interest payments on (most) business loan obligations. That said, you’ll have to get your loan forgiveness application approved by the Small Business Administration before you’re off the hook for the amount you borrowed.

No surprise here: COVID continues to exert its impact on tax legislation and filing, but that’s good news for many. Last year, millions of Americans were eligible for a third stimulus check worth up to $1,400 per every qualifying individual in their household. If you haven’t yet received it or are missing the full amount for […]

No surprise here: COVID continues to exert its impact on tax legislation and filing, but that’s good news for many. Last year, millions of Americans were eligible for a third stimulus check worth up to $1,400 per every qualifying individual in their household. If you haven’t yet received it or are missing the full amount for which you’re eligible, you may be eligible to claim the 2021 Recovery Rebate Credit.

Similar to the original eligibility rules, the 2021 recovery rebate credit is generally equal to the calculation of your third-round stimulus check, using information from either your 2019 or 2020 tax return. If you didn’t file a return for either of those years, the IRS sent a third stimulus check based on whatever information, if any, was available to it, i.e. the Social Security Administration (SSA) or Veterans Administration (VA). That said, the final value of your credit may be adjusted based on the information found on your 2021 tax return. Perhaps the IRS didn’t know you adopted a child or had a baby in 2021; maybe your income situation declined. All those circumstances could combine to make you eligible for additional stimulus money.

Unlike child tax credit payments, the IRS doesn’t expect taxpayers to repay any overpaid money. The IRS, however, will not automatically calculate the 2021 recovery rebate credit for you, meaning it’s up to you to make sure you don’t leave any money behind.

If you forgot how much you received last year, if any, don’t panic. The IRS sent a notice – Letter 6475 – earlier this year. If they did not, you can also find the total amount to subtract from the credit on your IRS online account, if you have one. Lastly, you can also call the IRS’s automated phone transcript service at 800-908-9946 for it be sent by mail or submit Form 4506-T.

If you have already filed 2021 taxes and didn’t claim the credit appropriately or missed it altogether, you can amend a submitted tax return—though that could lead to longer wait times.

Delays may be inevitable for taxpayers this year, but filing early and accurately can help you avoid long waits for your refund or the need to amend your return. As you prepare, here are some dates to keep in mind: Jan. 24: First day you can file federal tax returns Jan. 31: Deadline for employers to give […]

Delays may be inevitable for taxpayers this year, but filing early and accurately can help you avoid long waits for your refund or the need to amend your return. As you prepare, here are some dates to keep in mind:

• Jan. 24: First day you can file federal tax returns
• Jan. 31: Deadline for employers to give employees Form W-2 for filing
• April 18: Last day to file your 2021 tax return, request an extension, and pay taxes owed
• April 18: Estimated Tax Payment for 1st Quarter of 2022 (Form 1040-ES)
• April 18: Last day to contribute to IRA and HSA for 2021 tax benefit
• April 19: Last day to file your 2021 tax return, request an extension, and pay taxes owed for Massachusetts and Maine residents
• June 15: Estimated Tax Payment for 2nd Quarter of 2022 (Form 1040-ES)
• June 15: Military Personnel on Duty Outside the U.S. File 2021 Tax Return (Form 1040)
• Sept. 15: Estimated Tax Payment for 3rd Quarter of 2022 (Form 1040-ES)
• Oct. 17: Due date to file if you request and are granted an extension
• Dec. 31: Contribution to Employer-Sponsored Retirement Plan for 2022 (401(k), 403(b), 457 or federal thrift savings plans)

New tax laws have made it more costly for employers to reward their employees for exemplary service, years on the job or just for being an awesome someone to have in the office. Why? Because all the old standbys are now taxable! Good old-fashioned cash? Taxable. Gift cards, lodging, tickets on the fifty-yard line? Taxable. […]

New tax laws have made it more costly for employers to reward their employees for exemplary service, years on the job or just for being an awesome someone to have in the office. Why? Because all the old standbys are now taxable!

Good old-fashioned cash? Taxable. Gift cards, lodging, tickets on the fifty-yard line? Taxable. Stock in the company? Bonds? Pretty much any non-tangible property you can think of as a reward for achievement? They’re all taxable. Of course, we’re not recommending you forego rewards as a way of doing business. Far from it. What we do recommend going forward is to be sure you know the true cost of your reward and operate accordingly.

Confused? Have questions? Feel free to talk with us about this and any other tax or accounting questions at Go Figure.

Here’s a shocker some employers are completely unaware of: Those of you who are accustomed to providing completely free or partially subsidized transit passes for your employees can no longer deduct that generosity as a business expense. Same goes with free or subsidized van pools, free or subsidized parking. They are no longer deductible business […]

Here’s a shocker some employers are completely unaware of: Those of you who are accustomed to providing completely free or partially subsidized transit passes for your employees can no longer deduct that generosity as a business expense. Same goes with free or subsidized van pools, free or subsidized parking. They are no longer deductible business expenses. In fact, by definition, they are literally gifts given from the kindness of your heart. On the other hand, employees who benefit in those ways from their employer’s generosity are not required to treat it as income.

Confused? Have questions? Feel free to talk with us about this and any other tax or accounting questions at Go Figure.

You can still take your clients to dinner and deduct 50 percent for it—if it’s properly documented with the who, what, where, why and how it’s business-related. But the show for after dinner, or the tickets to the concert or the game can no longer be deducted. Same thing goes for business-related dues or memberships […]

You can still take your clients to dinner and deduct 50 percent for it—if it’s properly documented with the who, what, where, why and how it’s business-related. But the show for after dinner, or the tickets to the concert or the game can no longer be deducted.
Same thing goes for business-related dues or memberships for pleasure, recreation or any other social purpose. Sorry golfers—keep your clubs in the bag or be prepared to pay the memberships, cart, green and whatever other fees may apply.