Crowdfunding has become a very popular way for individuals to raise capital. It typically involves funding a project or venture by raising contributions from a large number of people, typically through online crowdfunding sites. Crowdfunding campaigns fund a broad range of projects, from producing a product or new technology to supporting a charitable cause. Those supporting a product using can buy the product at a reduced price.
It's the season for tornadoes, hurricanes, flooding and devastating winds. So, I thought it would be a good time to review the rules for taking money out of your retirement accounts to get you through the storms.
The IRS has just released a new set of FAQs on the provisions that the SECURE Act 2.0 provides for relief of individuals impacted by federally declared disasters. The SECURE 2.0 Act allows for:
A lot of small businesses hire independent contractors to do projects that don't require a regular full or part time employee. Part of that process can be have that person fill out a W-9 form so that you have the proper information to give them a 1099-NEC form the next January showing how much you paid them.
That said, do you have to have every person you hire fill out a W-9? The simple answer is no. The complex answer is maybe. If you are hiring another business to do a single task for you, then probably not providing they give you invoices for the work. However, if you are sub-contracting work out to another person or business, then you probably should.
Did you know that there are several categories of income are not taxable in the eyes of the IRS?
Here is a list of some common types of nontaxable income. Needles to say, it's good to consult a trusted tax professional or financial adviser if you are uncertain about your tax burden and how to minimize it.
Note: The following are examples of nontaxable income. (This list is not all-inclusive.) In some cases, you may have to report nontaxable income on your federal income tax return even though it isn't subject to tax.
For more information on what the IRS considers taxable, see IRS Publication 525.
One of the most - I think - was the tax rule concerning those whose join the military was that your state of residence for tax purposes was where you signed up for the military. So, if you joined the military from a state that has state income tax laws, you had to pay state taxes to to that state - even if you currently live in a state that had no tax.
Congress finally fixed it.
The Veterans Auto and Education Improvement Act of 2022 (VAEIA) was signed into law Jan. 5, 2023. The Act expands existing legislation protecting military service members’ and their spouses’ residency.
Eligible small employers may claim a general business credit of up to $5,000 for the cost of establishing a pension plan, such as a SEP or SIMPLE plan, for eligible employees. An eligible employer is one with 100 or fewer employees who received at least $5,000 in compensation the previous year. The credit is allowed for the year the plan is established and each of the two subsequent years.
For plan years starting after Dec. 31, 2022:
Prior to 2020, a "Stretch IRA" was used to extend the tax-deferred status of an inherited IRA when it passed to a non-spouse beneficiary (i.e. children and/or grandchildren). This way you could pass an IRA down to the next generation and beneficiaries would enjoy the tax benefits of an IRA over their respective lifetimes.
The retirement planning changes in a nutshell:
The number of content creators on social media have ballooned and advertising departments have noticed. Sending their products to creators to evaluate is one of the most cost effective ways to get your name out their to an audience that is willing to listen.
What a lot of new creators fail to address is how to handle these 'gifts' from a tax standpoint. So let's review the rules and IRS regulations that pertain to this subject. Here is an example situation to begin the discussion:
One of the most mis-understood parts of the tax code is how to handle fringe benefits when you are a shareholder of a S corporation. Here's a quick primer on life insurance, retirement plans and health insurance:
In general, a business may provide certain tax-free fringe benefits to its employees. One such benefit is group term life insurance up to $50,000, but there are special rules regarding fringe benefits that apply to S corporation 2% shareholder-employees. Generally, a 2% shareholder is a shareholder who owns more than 2% of the S corporation’s stock on any day during the tax year.
(Under §1372 and Rev. Rul. 91-26, for fringe benefit purposes, an S corporation 2% shareholder who is also an employee of the corporation is treated the same way as a partner in a partnership.)