Hot Topic Accounting

We have had several clients receive letters from the IRS about the amount they received from their stimulus checks. The first step is to compare what was reported to the IRS through the tax return to the amount the IRS reports they sent. This is how you check the records on IRS.gov: https://sa.www4.irs.gov/eauth/pub/login.jsp?Data=VGFyZ2V0TG9BPUY%253D&TYPE=33554433&REALMOID=06-00029c6a-0543-17b0-89b8-163b0acf40c7&GUID=&SMAUTHREASON=0&METHOD=GET&SMAGENTNAME=UOkC7yx4eMTO24FGxPfBRb5q3Mj3Xh3pyXfBEjYyHJ97nGCXu16wx5MzFHjfZmlG&TARGET=-SM-HTTPS%3a%2f%2fsa%2ewww4%2eirs%2egov%2fola%2ftax_records%3fGMP%3d1

Sources: Bloomberg Article – “Biden unveils massive family aid plan funded by taxing wealth.” Accounting Today – “Biden calls for raising taxes on capital gains and wealthy.” $1.8 trillion bill - $1 trillion on spending & $800 million on tax cuts and credits Spending: Pre-K and community college becomes free NATIONALLY Direct support to families for childcare Finance Teacher training The national family paid leave program $80 million in funding to IRS to conduct tax audits Tax Cuts & Credits: Permanent Earned Income Tax Credit to childless adults under an income limitation Expansion of child tax credit to 2025 End Goal: Tax Wealthy More Corporate Tax Rate increases to 35% Individual Tax Rate increases back to 39.6% Capital Gains Tax Rate increases to 39.6% with over $1 million in earnings “I will not impose any tax increases on people making less than $400,000 a year.” - President Joe Biden

Sources: USA Today – “When will child tax credit payments start? Checks set to roll out in July, IRS says.” · American Rescue Plan – passed in March of 2021. · Starting in July 2021, Child Tax Credit payments will begin to be deposited into taxpayers' bank account. These are expected to be between $250-$300 per month. · American Rescue Plan – passed in March of 2021. · President Biden wants to extend this through 2025 with The American Families Act. · Phase-out starts at $75,000 for single filers and $150,000 for joint filers. Families above this income level may still be eligible for the original $2000 credit on the filing of their tax returns. For more information: https://www.irs.gov/credits-deductions/advance-child-tax-credit-payments-in-2021

The IRS is behind on processing 2019 AND 2020 tax returns. If you are still waiting on your tax refund, you are not alone. Luke dives into what taxpayers can do to adjust their withholding so they get their tax dollars throughout the year, rather than waiting for a backlogged IRS system to send you a refund!

Luke follows up on Spencer's previous podcast regarding Individual Retirement Accounts, and why a ROTH IRA may make sense for you.

Luke invites guest, Spencer Ford, CFP®, to discuss IRA's. He explains how to invest, where you should invest, and why to start now.

Luke covers some changes to the tax forms of 2020. Wondering what papers you need to bring to your accountant - he shares that too!

Luke and Darren dig into some details about S-Corps and Partnerships, and how to report income derived from these entities.

Luke and Darren dive into the details of a "LLC" (Limited Liability Company) and how this simple step in the process of setting up your business can save you troubles down the road. They discuss: Why the LLC election is important How to obtain your LLC election The IRS standards for electing to become a single-member LLC versus electing to become a multi-member LLC. For more information about Harrison Tax & Accounting - visit: https://www.harrisontaxandaccounting.com/

On this episode of Hot Topic Accounting, Darren and Luke discuss the differences in tax liability between a 'W2 employee' and a self-employed individual. They also share some tips and tricks on how to be more prepared come tax filing season!

Welcome to Hot Topic Accounting where we dive into the latest Accounting news! This podcast episode welcomes our hosts Darren Bowman, CPA, and his son, Luke Bowman, Operations Manager of Harrison Tax & Accounting.