Davidoff & Associates

08/30/2021

There are big moments in everyone’s life. A new birth is one of them. The irony is that most life events also have tax consequences attached to them. When recalculating your withholdings also account for common tax benefits that come with new dependents. The most common of these benefits includes the Earned Income Credit and the $2,000 Child Tax Credit.

08/24/2021

To calculate your home sale gain take the sales price received for your home and subtract your basis. This “basis” is the original cost of your home including closing costs adjusted by the cost of any improvements you have made in your home. You might also have a reduction in home value due to prior damage or casualty losses. As long as the home sold is owned by you as your principal residence in at least two of the last five years, you can usually take advantage of the capital gain exclusion on your tax return.

08/19/2021

The "kiddie tax" is a rule that affects the investment income of children. A child's unearned income above a threshold amount will be taxed using trust and estate tax rates. The intent is to stop a high-income parent from shifting large amounts of earnings to a child in a lower tax bracket.

08/16/2021

Tax residency is usually based on the concept of domicile. You may have many homes, but you can only have one domicile. A domicile is the place you intend to be your permanent home, and where you intend to return after being away. When these cases go to court, they are often decided by determining a person's intentions regarding their domicile.

08/05/2021

August 2021 Sales Tax Holidays: The Complete List

Because no two sales tax holidays are alike, the summer sales tax holiday season is particularly burdensome for companies selling qualifying products into multiple states. Key considerations for retailers include:

08/03/2021

SBA streamlines forgiveness process for most PPP loans

The SBA issued new guidance intended to speed up and simplify the forgiveness process for Paycheck Protection Program loans of $150,000 or less, which represent 93% of the outstanding loans in the $800 billion program.

08/03/2021

Sole proprietorships do not produce a separate business entity. This means your business assets and liabilities are not separate from your personal assets and liabilities. You can be held personally liable for the debts and obligations of the business. Sole proprietors are still able to get a trade name. It can also be hard to raise money because you can't sell stock, and banks are hesitant to lend to sole proprietorships.

07/29/2021

COBRA premium assistance credit clarified further

The IRS has supplemented its guidance on COBRA premium payment assistance and the corresponding business tax credit under the American Rescue Plan Act.

07/27/2021

Tax Tip: Correct discrepancies before you file. The IRS matches the documents it receives from various sources with the information you report on your tax return - for example, the interest income as reported on Form 1099. If you receive information returns that are inaccurate, contact the issuer to get a corrected form. If you cannot get a correction, plan on attaching an explanatory note to your tax return.