Agler & Gaeddert, Chartered

09/22/2022

Are you hoping to start a business? Many people dream of being their own bosses. To get off to a strong start, you’ll need to make good decisions. For example, which business structure will you use (such as a sole proprietorship or corporation)? This decision will affect the taxes you pay. Another decision is whether to operate on a calendar year or fiscal year basis. You should also obtain a federal employer ID number to identify your business. If you hire employees, you must provide them with certain forms right away, including Form I-9 (Employment Eligibility Verification) and Form W-4 (Employee Withholding). Here’s more, including links to requirements for states: https://bit.ly/3QNolaF

09/16/2022

A big tax bill (or a large refund) may mean you don’t have the proper amount of tax withheld from your paycheck. Here’s how to make sure that doesn’t happen next year.

https://bit.ly/3RLDGJd

09/15/2022

Taxpayers who operate a business can generally deduct business-related costs on their income tax returns. But they must keep thorough, contemporaneous records proving that the deductions are for legitimate business expenses. An information technology consultant and handyman deducted the cost of professional education on his return. But the IRS found the amounts weren’t business-related because they were for his child’s tuition. He submitted many documents for other expenses such as phone use, vehicle use and computer-related costs. But the records weren’t contemporaneous, were inconsistent and didn’t show how they connected to his businesses. The IRS limited his deductions. (TC Memo 2022-83)

09/08/2022

The U.S. government has begun issuing guidance regarding the Clean Vehicle Credit in the new Inflation Reduction Act (IRA). The IRA introduced a $4,000 tax credit for the purchase of used EVs and updated the $7,500 credit for new ones, with major changes. To qualify for the credit, there are now new requirements, including caps on the price of new vehicles, as well as buyer income limitations. Beginning in 2023, the caps imposed are $55,000 for electric cars and $80,000 for electric SUVs and pickup trucks. For more information on the Clean Vehicle Credit: https://bit.ly/3AroL0t. In addition, the Dept. of Energy posted a list of credit-eligible vehicles (https://bit.ly/3A7E1hN).

09/07/2022

09/01/2022

Even IRS penalties are affected by inflation. The IRS just announced that fourth quarter 2022 interest rates for tax overpayment and underpayment will increase by 1%. The interest rate for overpayments will be 6% for most taxpayers and 5% for corporations. If a corporation overpays by more than $10,000, the rate will be 3.5%. The underpayment rate for most taxpayers will be 6%, but large corporations will be penalized at 8%. Most interest is determined quarterly and is based on the federal short-term rate, plus three percentage points (an extra two percentage points for corporate overpayment or half a percentage point for corporate overpayment exceeding $10,000).

08/31/2022

You don’t have to be a large business to benefit from tax breaks. Here are 3 ways that eligible small businesses can save on taxes.
https://bit.ly/3QRVBNL

08/29/2022

On Aug. 24, President Biden announced a plan for student loan debt relief. The three-part plan may affect nearly 8 million borrowers. Part one will allow $20,000 of debt forgiveness for taxpayers who went to college on a Pell Grant or $10,000 without a Pell Grant. This applies only to taxpayers earning below $125,000 a year ($250,000 for married couples). The plan doesn’t specify how earnings are calculated or to which tax year they apply. Part two is an extension of the pause on student loan repayment until Dec. 31, 2022. Part three modifies the income-based repayment plan rules. Pell Grant recipients with undergraduate degrees will have their repayments capped at 5% of monthly income.

08/26/2022

Every employer must keep up with its federal payroll tax responsibilities. Let’s take a step back and review the basics.
https://bit.ly/3CEUcpP