Author - SFS Tax & Accounting

What is a Property Installment Sale?

Using an Installment Sale to Help Sell Real Estate and What to Look Out For You may be able to benefit from a tax deferral if you use an installment sale to sell a property and may even lower your tax bill. However, there is much to consider as specific "tax traps" to look out for. An installment sale is: You create an installment sale when you receive payments for sold real estate in the tax year of the sale and at...

What is a Property Installment Sale?

Using an Installment Sale to Help Sell Real Estate and What to Look Out For You may be able to benefit from a tax deferral if you use an installment sale to sell a property and may even lower your tax bill. However, there is much to consider as specific "tax traps" to look out for. An installment sale is: You create an installment sale when you receive payments for sold real estate in the tax year of the sale and at...

9 Ways Realtors Can Reduce Their Tax Bill

Do you know the 9 ways realtors can reduce their income tax bill? Is the IRS a dreaded agency that is working against the taxpayer? Tip #1: Gather Your Records To start, you’ll need to have all of the relevant documents on hand. This is especially important if you’re trying to maximize your deductible income. You’ll need documents and copies of the following: Copies of your receipts (scan or copy them if they may fade) Business earnings Business expense lists Deductions  ...

What the Heck is Backup Withholding?

Basically, if you are a taxpayer receiving certain types of income payments, the IRS requires the payer of these payments to report them on an information return. The person or business paying you does not generally withhold taxes from these types of payments, as it is assumed you will report and pay taxes on this income when you file your federal income tax return. So, what the heck is Backup Withholding? It is the tax withholding of federal income taxes on...

The 2021 Child Tax Credit Update

The 2021 Child Tax Credit Update - Important changes to the Child Tax Credit (CTC) will help many families get advance payments of the Child Tax Credit starting in the summer of 2021. Half the total credit amount will be paid in advance monthly, and you will claim the other half when you file your 2021 income tax return. The IRS will issue the first advance payment on July 15, 2021. The new “Child Tax Credit Update Portal” allows parents to...

Adopting? You Might Benefit from This Special Tax Credit

Are you adopting? You just might benefit from this special credit.  Here is some information you should know. What exactly is the adoption tax credit? The adoption tax credit is a nonrefundable tax credit meant to provide relief for the qualified costs you pay when adopting a child. The adoption process can be very costly. Fortunately, the adoption tax credit can help to offset some of those expenses. Here are some facts to help you understand the credit: • The maximum adoption credit...

The American Rescue Plan Passed!

The American Rescue Plan passed and will be signed into law at the end of the week. Here's a look at some of the provisions in the recently passed Act: Direct payments The bill allocates funds for a third economic impact payment to qualifying Americans. Individuals earning up to $75,000 and couples earning up to $150,000 would receive the full direct payments of $1,400 per person. Individuals will also receive an additional $1,400 payment for each dependent claimed on their...

Yes! These Things May Be Taxable

You already know that your wages are taxable. Here are some other things that may be taxable. 1. Scholarships - If you receive a scholarship to cover tuition, fees, and books, you don't have to pay taxes on the money. But if your scholarship also covers room and board, travel, and other expenses, that portion of the award is taxable. 2. Gambling Winnings - The IRS expects you to report your gambling proceeds on your tax return even if you do...

Employee or an Independent Contractor?

Employee or an Independent Contractor, sometimes it's hard to tell. Are you an independent contractor or an employee? As the pandemic continues, many long-time employees are now picking up jobs as contractors. States like California are trying to force the definition of employees upon companies. However, getting it wrong could cost you plenty in the way of Social Security, Medicare taxes, and other employment-related taxes. Here is what you need to know. The basics: As a contractor - If you are the worker...

The IRS IP Pin Program is Open

The IRS IP Pin Program is Open! The IRS has expanded their pilot program that uses Identity Protection Personal Information Numbers (IP PINs) to provide an extra layer of security for all taxpayers. Here is what you need to know about the IP PIN program: The IRS's IP PIN program is an additional security layer to ensure your tax identity is not stolen. When you register in the program, the IRS will mail you a six-digit numeric IP PIN. You must...