Elevated Accounting & Tax

08/16/2021

Colorado has passed three tax Bill's recently with a variety of topics including corporations, individuals, sales tax, and property taxes.

Some of these changes will affect you, some of them won't. These are the 4 changes that I think affect the most people:

1. Limiting the itemized deductions for those with over $400k of AGI
2. Breaking from Federal and only allowing 50% meals deduction for year 2022.
3. Making businesses with less than $50k of assets exempt from personal property tax
4. Limiting 529 plan deductions

08/02/2021

Realtors- this one is for you. I'll cut to the chase- the authorities who are suggesting that you should be paid by a W2 are trying to crush you.

Being paid by a W2 is the least desirable way to operate, and should be avoided at any cost.

W2 employees can write off nothing related to their work- not their office, not their car, nothing.

The tax code is written to favor business owners and 1099 contractors. Buying assets, writing off expenses, deducting home office, tax strategy, etc. are only available to business owners and not available to employees.

These people aren't doing you a favor, and I'd be weary of this movement.

06/26/2021

If you have kids 17 and under, you should watch this video.

The government is going to mail parents checks beginning next month for their 2021 Child Tax Credit.

Here is the kicker- if they pay you too much, you have to pay it back.

The IRS uses old information (2019 or 2020 tax returns) to determine if you qualify for the credit. If you make significantly more in 2021 than you did in 2020, you could be disqualified and have to pay the IRS back for the money they sent you.

The best solution? Opt Out!
The IRS has a portal where you can opt out of the Monthly payments and you no longer run the risk of this happening. If you qualify for the credit for 2021, take the credit on the tax return. If you no longer qualify, no worries- there is nothing to pay back.

Opt Out Here: https://www.irs.gov/credits-deductions/child-tax-credit-update-portal

06/16/2021

Catch us on Main Street! We are happy to announce that Elevated Accounting and Tax has moved to historic downtown Windsor at 423 Main Street. Signage coming soon!

06/02/2021

Refunds from 2020 taxes are taking forever. The IRS is sucking wind and way behind on processing returns. I saw that at one point yesterday, they were receiving 150,000 calls per second. Covid and new legislation has put a serious bottleneck in the IRS's ability to function, and wait times of up to 16 weeks are common.

05/31/2021

04/22/2021

With the current Real Estate market being absolute bananas, a lot of investors find themselves sitting on considerable equity. If they want to cash in on their appreciation, they may be looking at a substantial gain and tax bill to accompany it.

This is where a 1031 Exchange can come in.

A 1031 Exchange, also called a Like Kind Exchange, allows an investor to sell a property at a gain and avoid paying taxes. In a nutshell, the investor can avoid recognizing a gain if they sell their appreciated property and buy a new property meeting certain criteria within a short period of time.

Below are seven rules to keep in mind when executing a 1031 Exchange:

1. The exchange must be for Like Kind property. This would include commercial, residential, raw land, water rights, and oil and gas rights.

2. The old property and the new property must be for investment purposes and not personal.

3. The new property should be of equal or greater value, and the indebtedness (financing) should be equal or greater as well.

4. No boot received. If the new property has a lower cost than the old property, the owner would receive cash for the difference (called boot) and the boot is taxable.

5. Must be the same taxpayer or business who sells the old property and buys the new.

6. Identify up to 3 properties within 45 days after closing on the old property.

7. Close on the new property within 180 days.

Bonus: you must use an intermediary and cannot receive the funds directly from the sale of the old property.

03/24/2021

Financial Literacy Part One:
The Balance Sheet

I'm doing a short series to help break down the barriers of understanding financial statements. We all get an education, but not always in the right areas. Knowing and understanding financials is critical to financial success.

03/22/2021

Tax season Top 3:
These are the questions/issues I'm seeing pop up the most during this 2020 tax season.

1. Home Office Deduction
2. Second Stimulus Payment
3. PPP and Tax Returns

03/17/2021

Almost every Tax Preparer Association is lobbying the IRS hard to push the tax filing deadline back to June 15th. Will it happen? Not sure, but I think it should be a permanent change.

Top Three Reasons why tax day should be permanently moved to June 15th:

1. Government keeps changing the rules during tax season. It's happened the last two years in a row.
2. Business owners rarely have their business taxes done by April 15th and have to extend. Let's give everyone a little more time.
3. Tax preparers working extended hours to race against an early deadline doesn't yield the best results.

03/11/2021

-Big Change Affecting 2020 Taxes-

New legislation that will be signed tomorrow now makes unemployment benefits non-taxable up to $10,200.

What it means-
You now won't get taxed on unemployment compensation, which will equal big tax savings for many.

If you received unemployment during 2020 and have not filed your taxes: Wait until your tax preparer gets info and guidance on how to handle this.

If you have already filed your taxes and received unemployment compensation, you will need to file an amended tax return to realize the savings. The IRS will not process the amended returns for up to 16 weeks, according to them.