Victor Smith – CPA » Latest News

Three bad things happen when you file your tax return late.

What’s Late? You can extend your tax return and file during the period of extension; that’s not a late-filed return. The late-filed return is filed after the last extension expired. That’s what causes the three bad things to happen. Bad Thing 1 The IRS notices that you filed late or not at all. Of course, the “I didn’t file at all” people receive the IRS’s “come on down and bring your tax records” letter. In general, the meeting with the IRS about non-filed tax returns does not go well. For the late filers, the big problem is exposure to an... Read More

Congress Passed Corporate Transparency Act: What It Means for You

If you’ve formed a limited liability company (LLC) or corporation to operate your business or are thinking about doing so, you need to know about the Corporate Transparency Act. Enacted in January 2021, Congress’s new law will end business owners’ ability to form business entities without revealing their identities to the government. The new law intends to prevent the formation of anonymous shell companies for illegal purposes such as money laundering and tax evasion. But the transparency rules apply to all small LLCs and corporations, including your legitimate business. For the first time, LLCs and corporations will have to file... Read More

Are your supervisors adept at multigenerational management?

Over the past year, the importance of leadership at every level of a business has been emphasized. When a crisis such as a pandemic hits, it creates a sort of stress test for not only business owners and executives, but also supervisors of departments and work groups. Among the most important skill sets of any leader is communication. Can your company’s supervisors communicate both the big and little picture messages that will keep employees reassured, focused and motivated during good times and bad? One factor in their ability to do so is the age of the employees with whom they’re... Read More

Cryptocurrency Tax Guidance

The IRS recently issued new cryptocurrency guidance and is hot on your trail if you bought and sold cryptocurrency and didn’t report it on your tax return. Here are the tax basics. You’ll treat cryptocurrency as property for tax purposes If you receive bitcoin in exchange for your services, then your income is the fair market value of the bitcoin received. Your basis in the bitcoin received is its fair market value at the time of receipt plus any transaction fees incurred. If you receive bitcoin in exchange for your property, then your gain or loss is the fair market... Read More

Steer clear of the wash sale rule if you’re selling stock by year end

Are you thinking about selling stock shares at a loss to offset gains that you’ve realized during 2020? If so, it’s important not to run afoul of the “wash sale” rule. IRS may disallow the loss Under this rule, if you sell stock or securities for a loss and buy substantially identical stock or securities back within the 30-day period before or after the sale date, the loss can’t be claimed for tax purposes. The rule is designed to prevent taxpayers from using the tax benefit of a loss without parting with ownership in any significant way. Note that the... Read More

Employees: Don’t forget about your FSA funds

Many employees take advantage of the opportunity to save taxes by placing funds in their employer’s health or dependent care flexible spending arrangements (FSAs). As the end of 2020 nears, here are some rules and reminders to keep in mind. Health FSAs A pre-tax contribution of $2,750 to a health FSA is permitted in both 2020 and 2021. You save taxes because you use pre-tax dollars to pay for medical expenses that might not be deductible. For example, they wouldn’t be deductible if you don’t itemize deductions on your tax return. Even if you do itemize, medical expenses must exceed... Read More

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