Author - SFS Tax & Accounting

All Income Must Be Reported

Filing taxes? Then you must include all income in your tax preparation. Here is a partial list of the types of income you need to report: Government issued photo IDs (e.g., your driver's license) or ITIN Social Security card(s) (if you are a new client) Prior year's tax return (if you are a new client) W-2 - if you are employed Foreign earned income 1099-G - received government payments 1099-NEC - if you are self-employed  1099-R - is used to...

15 Year End Tax Tips

There are just 22 days left of 2021, and there is still some time left to consider these 15 Year-End Tax Tips and act on them. Additionally, they may have a positive impact on your 2021 taxes. Here are the tips for you to act on: Make last-minute charitable donations. Review and maximize use of the $15,000 annual gift-giving limit. It will increase to $16,000 in 2022. Review your investment portfolio for capital gain and loss planning. ...

7 Ways For Business Owners to Reduce Their Taxable Income

Taxes can be stressful for a business owner. You wear many hats, juggle many balls, and the last thing you want to do is give any more of your hard-earned revenue to the IRS than you need to. Thankfully, there are many tax savings strategies to reduce your taxable liability.  Here are 7 Ways For Business Owners to Reduce Their Taxable Income. Employ Family Member  One of the best ways to reduce taxes for your small business is by hiring a...

Tax Moves to Make Before Year-End

Tax Moves to Make Before Year-End - Are you looking to try and reduce your taxable income? Here are some tax-saving moves. However, they must be completed by December 31. Tax-loss harvesting  If you own stock in a taxable account that is not in a tax-deferred retirement plan, you can sell your underperforming stocks by December 31. And use these losses to reduce any taxable capital gains. If your net capital losses exceed your gains, you can even net...

Why Do I need a Tax Strategy Session?

Why do I need a tax strategy session? A year-end tax planning meeting with your Enrolled Agent (EA) is a must for many taxpayers, especially individuals who own a business. For the business owner, the purpose of the meeting is to clean up your books (if necessary). However, the underlying reason for the session is to project your tax liability for the current year. Your EA can make recommendations to reduce the amount of taxes that you will owe....

Employee Tax-Free Income

Most income received from your employer generally ends up on a W-2 tax form at year's end. However, some income is employee tax-free income. Here are eight common employee benefits that often avoid the impact of federal taxes. There are many more benefits to consider. Your tax professional can speak to this at your annual tax meeting.         1. Small gifts - non-cash The IRS calls these "de minimis" benefits. Small-valued benefits are not included in income and...

Tax-Loss Harvesting

Tax-loss harvesting, what the heck is that? Simply put, it is when you sell some investments at a loss to offset gains you've realized by selling other stocks at a profit. The result is that you only pay taxes on your net profit or the amount you've gained minus the amount you lost, thereby reducing your tax bill. Even with a strong market, you may not obtain the result you expect.  However, a poor-performing investment does have an upside. You may be...

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?

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? The tax withholding of federal income taxes on income typically does...