​As a small business owner, you know that taxes can be a complex and overwhelming part of running your business. However, with the right tax planning strategies, you can minimize your tax liability and keep more of your hard-earned money in your pocket. Here are some key strategies to consider:

• Health flexible spending arrangements (FSAs) or dependent care assistance programs have additional discretion in 2021 and 2022 to adjust their programs to help employees better meet the unanticipated consequences
• Notice 2021-15 provides flexibility for the carryover of unused amounts from the 2020 and 2021 plan years and flexibility to extend the permissible period for incurring claims for plan years ending in 2020 and 2021
  
  

Read the latest from the IRS website here. ​

The alternative minimum tax was originally enacted to ensure that high-income taxpayers pay at least a minimum
amount of tax if they benefit from certain deductions and
other tax preference items.

The AMT tax computation is a parallel system to the regular tax system with its own definitions of income and expenses, rules for income recognition and timing, exemptions, and tax rates. Although every taxpayer is subject to
AMT rules, the additional tax is paid only if the tax computation under AMT rules is higher than the tax computed
under regular rules.

Even though the AMT was originally targeted toward high-income taxpayers, factors, including inflation and
treatment of certain tax credits, can sometimes push lower-income taxpayers into an AMT situation.

Read on to learn about how it works.

Certain items called adjustments and preferences are added to or subtracted from federal adjusted gross income reduced by any itemized deductions. An AMT exemption amount is allowed, depending on the taxpayer’s filing status. The AMT tax rate of 26% to 28% is applied to the resulting alternative minimum taxable income. If the resulting tax is greater than regular tax, the difference is added to regular tax on Form 1040.

Example #1: When computed under regular rules, John’s income tax is $4,700. When computed under AMT rules, the tax amount is $3,900. Since his tax computed under AMT rules is less than his tax computed under regular rules, John will not pay any additional amount for AMT.

Example #2: Assume the same facts as Example #1, except when computed under AMT rules, John’s tax amount is $5,100. Since his tax computed under AMT rules is higher than his tax computed under regular rules, John must pay the difference in additional tax. John must report additional AMT tax in the amount of $400.

Remote work is on the rise, and this has implications to your tax deductions. According to a survey done by FlexJobs.com and Global Workplace Analytics, remote work has spiked 159% between 2005 and 2017.  Not only that, but remote work is impacting real estate. A report completed by Zillow indicated that more than half of home buyers who work remotely say remote work has influenced a major home change.

Some expenses are deductible whether or not you use your home for business. Others are deductible only if the home is used for business.

If you find yourself recently married or in the process of getting married, it's important to consider more than just floral arrangements. Marriage, while a loving union, is also a huge financial change. Making sure you have your taxes in order is a must. Here are 7 things you need to have your to-list after those nuptials are finalized:

1. Notify the Social Security Administration (SSA) If one of you has taken on a new name, report the change to the SSA. File Form SS-5, Application for a Social Security Card.
It is essential that your name and Social Security Number match on your tax return. The IRS will match your information with records provided by the SSA and, if the records don’t match, any electronically filed return will be rejected and any paper filed return will be de- layed until the error is corrected.
Getting married during tax season? It may be best to avoid changing your name. While the SSA can process a name change in about two weeks, the delay in data-sharing between the SSA and the IRS can make any change near the end of the year problematic. In such situations, it may be advisable to file the tax return using your maiden name and change your name with the SSA after the return has been filed.

2. Notify the IRS If You Move The IRS will automatically update your new address upon filing your next tax return, but any notices the IRS sends in the meantime may not get to you. The U.S. Postal Service does not forward certain types of federal and certified IRS mail. 

3.Notify the U.S. Postal Service To ensure your mail, including mail from the IRS, is forwarded to your new address, you’ll need to notify the U.S. Postal Service. 
Most post offices will not forward refund checks so be sure the IRS has your correct address. Using electronic direct deposit for refunds can prevent them from being delayed due to address mix-ups.
4. Notify Your Employer Report your name and/or address change to your employer(s) to make sure you receive your Form W-2, Wage and Tax Statement, after the end of the year.

5. Notify Financial Institutions Financial institutions with which you do business need to be notified to ensure that any Forms 1099 are sent to the proper address. This would include banks and brokerage firms, as well as employer-sponsored retirement plans.

6. Check Your Withholding If you both work, keep in mind that you and your spouse’s combined income may move you into a higher tax bracket. The IRS Tax Withholding Estimator, available at www.irs.gov, can help you determine whether you need to give your employer(s) a new Form W-4, Employee’s Withholding Certificate. Use the results to fill out and print Form W-4 online and give it to your employer(s).

7. Choose the Best Filing Status Once you are married, you can no longer use the Single filing status on your tax return. Your marital status on December 31 each year determines whether you are considered married for the entire year for tax purposes. Generally, the tax law allows married couples to file their federal income tax returns either jointly or separately in any given year.
Married Filing Jointly. If you are married on the last day of the year and both spouses agree, you can file a joint return. Joint returns include income and deductions for both spouses. If a joint return is filed, both of you may be held responsible, jointly and individually, for the tax and any interest or penalty due on the joint return. One spouse may be held responsible for all the tax due even if all the income was earned by the other person. For most married couples, filing jointly will result in a lower tax liability. Once a joint return is filed for any tax year, it cannot be amended to file separately.
Married Filing Separately. If you are married you can choose to file separately and report only your own income, credits, and deductions. Many credits and deductions are not allowed on married filing separately forms, which generally results in higher tax liability. A separate return can be amended within three years of the due date to change the filing status and file a joint return.

When does it make sense for a married couple to file separately? 

• One spouse has messy or missing records, is taking a risky tax position, or is suspected of not reporting all of his or her income.
  
• One or both spouses have federal student loans and are on income-driven repayment plans. The Department of Education will use combined income to calculate payments if a joint return is filed. If spouses file separately, generally only one spouse’s income will be used which can result in more affordable payment plans.
  
• One spouse has not been filing his or her tax returns. Filing separately allows the other spouse to fulfil his or her own tax obligations.
  
• Both spouses have their own itemized deductions. Because of the percentage limitations on Schedule A (Form 1040), some spouses may be able to claim higher overall deductions.
  
• One spouse has past due debt from a government agency such as tax, child support, or student loans. If a joint return is filed, the other spouse’s share of any refund may be used to pay debt for which he or she is not liable unless Form 8379, Injured Spouse Allocation, is filed.

Have questions? Contact us! We can help. 

The Wall Street Journal last year shared a heart-wrenching story of financial ruin, when a 60 year-old nurse paid scammers $340,000.  Scams are on the rise in the past few years, and it's important now more than ever for tax payers to be aware. In the chart below from the Wall Street Journal, reported losses from scammers has grown to nearly $30 million. 

Tax scammers work year-round, not just during tax season and target virtually everyone. Stay alert to the ways criminals pose as the IRS to trick you out of your money or personal information. 

IRS-Impersonation Telephone Scam
An aggressive and sophisticated telephone scam targeting taxpayers, including recent immigrants, has been making the rounds throughout the country. Callers claim to be employees of the IRS, but are not. These con artists can sound convincing when they call. They use fake names and bogus IRS identification badge numbers. They may know a lot about their targets from information gathered from online resources, and they usually alter the caller ID (caller ID spoofing) to make it look like the IRS is calling. Also, if the phone is not answered, the scammers often leave an urgent callback request.

Victims are often told they owe money to the IRS and it must be paid promptly through a pre-loaded debit card, gift card, or wire transfer. If the victim refuses to cooperate, they are then threatened with arrest, deportation, or suspension of a business or driver’s license. In many cases, the caller becomes hostile and insulting. 

Alternatively, victims may be told they have a refund due to try to trick them into sharing private financial information.

• You should note that the IRS will never:
• Call to demand immediate payment, nor will the agency call about taxes owed without first having mailed you a bill.
• Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe. Require you to use a specific payment method for your taxes, such as a prepaid debit card.
• Ask for credit, debit card, or PIN numbers over the phone.
• Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.

What to do. If you receive a phone call from someone claiming to be from the IRS and asking for money, take the following steps.

• Do not provide any information to the caller. Hang up immediately.
• ​If you know you owe tax, or think you might owe, you should call the IRS at 1-800-829-1040 where you can get help with a payment issue.
• If you know you do not owe any tax, or have no reason to believe that you do, report the incident to TIGTA (Treasury Inspector General for Tax Administration) at 1-800-366-4484 or at www.tigta.gov.
• You should also contact the Federal Trade Commis- sion and use the “FTC Complaint Assistant” at www. ftc.gov. When filing the complaint, add “IRS Tele- phone Scam” to the comments. 

Phony IRS Emails—“Phishing”
Scammers copy official IRS letterhead to use in emails they send to victims. Emails direct the consumer to a web link that requests personal and financial information, such as a Social Security Number, bank account, or credit card numbers. The practice of tricking victims into revealing private personal and financial in- formation over the internet is known as “phishing” for information.
The IRS does not notify taxpayers of refunds or payments due via email. Additionally, taxpayers do not have to complete a special form or provide detailed financial information to obtain a refund. Refunds are based on information contained on the federal income tax return filed by the taxpayer. The IRS never asks people for the PIN numbers, passwords, or similar secret access information for their credit card, bank, or other financial accounts.

What to do. If you receive an email from someone claiming to be from the IRS and asking for money, take the following steps:

• Do not reply to the email message.
• Do not give out your personal or financial information over email.
• Do not open any attachments or click on any of the links. They may have a malicious code that will infect your computer.
• Forward the email to the IRS at phishing@irs.gov.
• Delete the email.
  
  

Fake charities. Be on guard against groups masquerading as charitable organizations to attract donations from unsuspecting contributors. Contributors should take a few extra minutes to ensure their hard-earned money goes to legitimate and currently eligible charities. IRS. gov has the tools taxpayers need to check out the status of charitable organizations. Be wary of charities with names that are similar to familiar or nationally-known organizations.

Abusive tax shelters. Avoid using abusive tax structures to avoid paying taxes. The IRS is committed to stopping complex tax avoidance schemes and the people who create and sell them. The vast majority of tax- payers pay their fair share, and everyone should be on the lookout for people peddling tax shelters that sound too good to be true. When in doubt, taxpayers should seek an independent opinion regarding complex products they are offered.

Frivolous tax arguments. Avoid using frivolous tax arguments to avoid paying taxes. Promoters of frivolous schemes encourage taxpayers to make unreasonable and outlandish claims to avoid paying the taxes they owe. These arguments are wrong and have been thrown out of court. While taxpayers have the right to contest their tax liabilities in court, no one has the right to dis- obey the law or disregard their responsibility to pay tax- es. The penalty for filing a frivolous tax return is $5,000.

Ways to Protect Yourself From Scams
There are many precautions you can take to protect yourself from becoming a victim. These include:

• Personal information should not be provided over the phone, through the mail, or on the internet unless the taxpayer initiated the contact or is sure he or she knows with whom he or she is dealing.
• Social Security cards or any documents that include your Social Security Number (SSN) or individual tax- payer identification number (ITIN) should not be car- ried around.
• Do not give a business your SSN or ITIN just because they ask — provide it only if required.
• Financial information should be protected. Do not give out any financial information over the phone or via email.
• Credit reports should be checked yearly.
• You should review your Social Security Administration earnings statements annually.
• Protect personal computers by using firewalls and anti-spam/virus software, updating security patches and changing passwords for internet accounts.
• Report any instances of tax scams to the IRS. ​