Author - SFS Tax & Accounting

This Isn’t a Tax Change

This isn't a tax change; it's a tax reporting change. If you're a gig workers, freelancer, or self-employed American, it might be in your best interest to get a jump on your 2022's taxes and consult with us at SFS Tax & Accounting Services. That's because a new tax reporting law could affect your tax return next year. This recent ruling, a provision of the 2021 American Rescue Plan, now requires earnings over $600 paid through digital apps like PayPal, Cash App, or Venmo to be...

Tips to Reconstructing Records

 Tips to Reconstructing Records. Do You Have Your Destroyed Records from the most recent disaster? The time and work recovering from a natural disaster can be extremely stressful, and it can potentially devastate a small business. When you consider the loss of income, damage to facilities/equipment and the loss of business records, a business can fold if the issues aren't addressed timely. Many business owners might need to reconstruct records to prove a loss. The documentation may be essential for tax...

Charitable Contributions and Taxes

If you give money or goods to a charity, you may be able to claim those as a deduction on your 2017 federal tax return. This will reduce the amount of your taxable income. Here are the rules for charitable contribution deductions: Your Donation Must Given be to a Qualified Charity Organizations must be eligible to receive tax-deductible charitable contributions. The IRS keeps a list of these organizations online.  You can use this list to verify that your donations are going to a...

6 Tips You Can Use To Lower Your Taxes in 2021

Here are 6 Tips You Can Use To Lower Your Taxes in 2021. Leverage pre-tax savings. Take advantage of opportunities to set aside income on a pre-tax basis. Participation in your employer's retirement savings program. Fully funding Health Savings Accounts (HSA) and "Flex Benefits" accounts that allow using pre-tax earnings to pay for childcare and out-of-pocket medical costs. Remember, unlike HSAs, it is important to use up any funds in your Flex health care accounts and dependent care accounts before the...

Tax Benefits for the Military

Tax Benefits for the Military - Members of the various military service branches may qualify for tax benefits not available to civilians. For example, they don't have to pay taxes on some types of income. In addition, special rules may lower the tax they owe or allow them more time to file and pay their federal taxes. Here are some of these special tax benefits: Combat pay exclusion: Part or all their pay is tax-free if someone serves in a combat...

Is it a Business or Hobby?

Jewelry making, baking cookies, teaching yoga, freelancer, and social media manager are a few home-based businesses that have become popular over the past few years. About 50% of all small businesses in the United States are considered home-based. However, that number jumps to 60.1% when looking specifically at companies with no employees. In addition, 69% of startups begin in the home as home-based businesses. Here's how to tell the difference between a hobby and a business for tax purposes A hobby is any...

Have You Heard About “Ghost” Tax Preparers?

What is a Ghost” Tax Preparer? Some taxpayers are a bit savvier than the average person and take great pains in selecting their tax preparer. They look at credentials, experience, reviews, and the cost of tax preparation. Other folks might strictly be interested in the cheapest price for tax preparation and due very little due diligence.  Regardless of your approach to selecting a tax pro, it is vital that you be smart about checking the legitimacy of whoever prepares your taxes....

How To Correctly Loan Money

Cousin Freddy needs a quick loan, and you graciously say, "How much?" and later, you wonder, what have I gotten myself into. Here's what you should know before you loan money to friends and family to make sure you avoid any potential tax traps. Loaning money can be tricky. Not only because of the stress it could put on your interpersonal relationships, but because there could be tax ramifications. If you must lend money to someone close to you, here are some...

Rent Your Property Tax-Free!

Rent Your Property Tax-Free! Most income you receive is reported to the federal and state tax authorities as taxable income. However, renting out your home or vacation property on a short-term basis can be done tax-free if you follow specific IRS rules. If you receive rental income for less than 15 days per year, that income is generally not taxable. In addition to tax-free rental income, you may still deduct your mortgage interest expense and property taxes as itemized deductions. However, neither of...

Surprise! These Five Items Are Taxable.

Surprise! These five items are taxable. Of course, you already know that wages and self-employment earnings are taxable, but what about the miscellaneous cash or other financial benefits you receive? If something valuable passes from one person to another, you know the IRS will consider it taxable. Here are five taxable items that might surprise you: 1. Scholarships and financial aid. Applying for scholarships and financial assistance are top priorities for parents of college-bound children. But be careful — if any part...