Sovinsky and Company, P.C.

12/08/2021

If you are part of an stock option or restricted/performance-based stock plan, you may have some complications if you decide to sell some of that stock. Usually, the brokerage statements reporting the cost basis of these are wrong, and far more tax may get paid than needed!

It's important to know how the taxability of stock-based compensation works if you are reporting it. If you have questions, please don't hesitate to reach out.

07/22/2021

Using 529's for college funds is a wonderful thing, but there is a game to play if you are concurrently trying to get the American Opportunity Tax Credit or the Lifetime Learning Credit. Here's some info on these credits. If you are in the situation of using 529 funds, we highly recommend talking to us or another tax pro on how best to use out of pocket funds along with 529 money to max out the credit.

04/08/2021

Here's the IRS's announcement on the unemployment situation regarding refunds being issued:

COVID Tax Tip 2021-46, April 8, 2021

03/09/2021

The Senate has just passed the 1.9T COVID relief bill. Important tax change for 2020 (Yes, tax law changes in March of the following year) - if you received unemployment, the Senate is proposing the first $10,200 is NOT TAXABLE. So, if you have already filed your tax return and received unemployment benefits, you will likely have to amend, assuming the bill as it stands goes through to Biden and is signed into law. The amendment will save you minimum $1,000 most likely.

Yes - millions upon millions of people will have to amend. Expect an extension of tax season as this delays everything (probably refund processing too).

02/12/2021

As a reminder, when filing 2020 tax returns, your 2nd stimulus (the one that like came in January 2021) needs to be reported on your 2020 tax return. Confusing, right?! Important, however - any discrepancy from the IRS's records could cause refund delays, or even worse, a love letter from the IRS. Be sure to report both!

01/18/2021

PPP2 should be live at most financial institutions. If you have any questions about the program or other COVID-related legislation, please feel free to contact us and we will help you any way we can.

12/14/2020

In 2020, even if you take the standard deduction, you can deduct up to $300 in charitable contributions. Don't forget this at tax time!

COVID Tax Tip 2020-170, December 14, 2020

12/09/2020

With the PPP proceeds and unemployment, it's important this year to do a check-up on taxes to make sure a big liability isn't coming your way this year. We recommend forecasting out and making sure cash is available for a potential year-end payment. This is not the type of surprise we look forward to at this time of year!!

Please let us know if you have questions on the taxability of grants, loans, stimulus, and unemployment as a result of the pandemic.

11/19/2020

The IRS came out with guidance today regarding the PPP loans. As of now, if one "reasonably expects" forgiveness, no deduction is allowed for those expenses the PPP loan paid for. Translation - the loan is taxable in 2020. Please prepare for that and pay estimates to cover any associated tax.

The taxability of these loans does not align with congressional intent - hopefully the agencies give us a break!!

Per IRS: Revenue Ruling 2020-27 provides guidance on whether a Paycheck Protection Program (PPP) loan participant that paid or incurred certain otherwise deductible expenses can deduct those expenses in the taxable year in which the expenses were paid or incurred if, at the end of such taxable year, the taxpayer reasonably expects to receive forgiveness of the covered loan. The revenue ruling also provides guidance if, as of the end of the 2020 taxable year, the PPP loan participant has not applied for forgiveness, but intends to apply in the next taxable year.

10/29/2020

As election day nears, if tax is one of your questions, please be sure to know the facts as best you can. Here is an unbiased, very easy to read comparison, which comprises the nuts and bolts of each.

Please note - Biden is not intending on rolling back the TCJA entirely nor is he raising property taxes (that is up to the municipalities). Conversely, Biden is planning on trying to repeal the step-up in basis of inherited assets, which could have major impacts to most taxpayers who will inherit real estate or stock portfolios.

With the Presidential election 9 weeks away, we prepared the following guideline to illustrate where each of the candidates stand on certain tax laws.

09/08/2020

With regards to each presidential candidate's tax plan, please consider reading this article. It describes in detail each plan, and does not appear to be leaning one way or another.

Now that the conventions of both major parties have wrapped up, we’re heading into the home stretch of the presidential election race. Naturally, taxes will be a major point of contention.