Author - SFS Tax & Accounting

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...

Tax ID Theft. Don’t Be A Victim.

Tax ID Theft. Don’t Be A Victim. Here are 7 Tips to Reduce Your Chances of Becoming a Victim of Tax Identity Theft. Tax identity theft occurs when identity thieves obtain your Social Security number and file a fraudulent tax return on your behalf. According to the Federal Trade Commission, tax identity theft is the most common form of identity theft. The FTC estimates that it costs taxpayers over $5 billion a year. Consumer advocates believe that since Social Security numbers...

Prepare for Tax Season

How to Prepare for Tax Season by Following These 3 Steps and Avoid Tax Trouble. Talking about taxes is not one topic people are happy to discuss or even care to think about, especially if they end up owing money in back taxes every year. That's why many taxpayers wait until the very last moment to prepare for tax season. It’s also why nearly 14 million Americans find themselves receiving threatening letters from the IRS and in some collection...

It’s Your Salary!

It’s Your Salary so who decides how much your paycheck should be? You or the IRS? You are the business owner. Are you taking advantage of your S Corporation status? Who decides what your salary should be? Don't let the IRS determine what your salary is. You likely formed an S corporation to save on self-employment taxes. Consider this - is your S corporation salary nonexistent? Is it too low, too high or, just right? Getting the S corporation salary right...

Stay Out of Tax Trouble

Stay Out of Tax Trouble By Avoiding These 5 Common Tax Filing Mistakes Whether you file a simple 1040EZ or a complex 1040 and a slew of schedules, making a mistake on your tax form could lead to big tax trouble. Something as simple as a math error or unsigned form could invite unwanted attention from the IRS. The tax agency sees those mistakes every year, and IRS representatives warn taxpayers to be careful when filling out their forms. Even if...

Ten Tax Facts to Know If You’re Selling Your Home

Selling Your Home? Here are Ten Tax Facts to Know Generally, the gain from the sale of the house is taxable but, you may not have to pay taxes. Here are ten tax facts to know: Exclusion of Gain. You may be able to exclude part or all of the gain from the sale of your home. This rule may apply if you meet the eligibility test. Parts of the test involve your ownership and use of the house....