AlldayCPA

The Supreme Court Likely Shook Up Your Buy-Sell Agreement We’d like to bring your attention to a recent U.S. Supreme Court decision that could significantly impact your buy-sell agreement if it involves life insurance to redeem shares upon your death. Impact on Estate Tax The Supreme Court’s ruling in Connelly established that life insurance proceeds used by a company to redeem a deceased owner’s shares increase the company’s value for estate tax purposes. This could result in a higher estate tax liability than anticipated. For more information, please visit our website at https://lnkd.in/gkhvMCVm.

Unlock Aircraft Tax Deductions - Overcome Passive Loss Limits Here are some important tax strategies for your aircraft operations that could help you overcome passive loss limitations and maximize your deductions. Understanding Passive Activity Limitations The IRS’s passive activity loss rules can prevent you from using aircraft-related losses to offset other income. If the tax code classifies your aircraft operations as passive, you may be stuck with unused losses until you dispose of the aircraft or generate passive income in future years. For more information, please visit our website at https://lnkd.in/gr65vFKc.

BOI Latest Updates for Dissolved and Disregarded Entities The clock continues to tick. Here are the upcoming deadlines for filing your Business Ownership Information (BOI) reports with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). Deadlines If your business existed as of January 1, 2024, you must file your BOI report by January 1, 2025.If you created your business in 2024, you have 90 days from the date of filing with your state’s Secretary of State to submit your BOI report. Entities Required to File All limited liability companies (LLCs) and corporations must file. For example, if you own multiple LLCs, each requires a separate BOI report.  For more information, please visit our website at https://lnkd.in/g8hpKAng.

Employee Retention Credit (ERC) Update Here’s a recent update on the Employee Retention Credit (ERC) and the new IRS payback scheme. New IRS ERC Payback Program The IRS introduced a second ERC Voluntary Disclosure Program for 2021 claims. Under this program, you can say, “I didn’t deserve the ERC, so I’ll repay 85 percent of my claimed ERC and retain 15 percent tax-free.” The program is available only for ERC claims from 2021, and there are specific eligibility requirements. If you claimed the ERC using a third-party payer, the third party must apply on your behalf.  For more information, please visit our website at https://lnkd.in/gQFzrmTK.

The Department of Labor Markets - It's Harder to Hire Independent Contractors Does your business classify workers as independent contractors instead of employees? You should know that the U.S. Department of Labor is trying to make it harder for all businesses to use independent contractors. The Department of Labor enforces the Fair Labor Standards Act (FLSA), the federal law that requires most employers to pay employees a minimum wage and non-exempt employees time-and-a-half for overtime. The key word here is “employee.” FSLA does not apply to independent contractors. They need not be paid time-and-a-half for overtime or even the minimum wage. For more information, please visit our website at https://lnkd.in/gagJW6Mg.

Tax Planning to Winter in Florida and Summer in Massachusetts You can plan your tax-deductible business life to avoid cold winters and hot summers. Spend a moment examining the following four short paragraphs containing the Andrews case’s basic facts. For six months of the year, from May through October, Edward Andrews lived in Lynnfield, Massachusetts, where he owned and operated Andrews Gunite Co., Inc., a successful pool construction business. During the other six months, Mr. Andrews lived in Lighthouse Point, Florida, where he owned and operated a sole proprietorship engaged in successful horse racing and breeding operations. In addition, he, his brother, and his son owned a successful Florida-based pool construction corporation from which Mr. Andrews took no salary but where he did assist in its operations For more information, please visit our website at https://lnkd.in/gSpMKFVy.

Side Fund Increases Benefits When Cutting Social Security Taxes After our discussion about ways to save on your Social Security taxes, you might be wondering how these savings impact your Social Security benefits. After all, paying less into Social Security results in receiving lower benefits later in life. However, there is a strategy to come out ahead—by creating a side fund and investing the savings from reduced Social Security taxes. For more information, please visit our website at https://lnkd.in/gE-7WEDC

The Cost of Trust - A Cautionary Tale for Minority Shareholders The story of James Maggard, a minority shareholder in an S corporation, highlights some significant lessons about the importance of vigilance and the need for proper oversight in businesses with multiple owners. Maggard, who owned 40 percent of the corporation, discovered too late that his fellow shareholders looted the corporation, which led to severe financial and tax consequences for him. Despite being unaware of their misconduct, Maggard was ultimately responsible for taxes on over $784,000 of income he never actually received. For more information, please visit our website at https://lnkd.in/gYR5JRrM.

Tax Deductions for Dues and Expenses of Being a Mason or a Lion Based on IRS regulations, club dues are generally not deductible if the organization’s principal purpose is to conduct entertainment activities for its members. However, there are exceptions for civic and public service organizations, such as the Lions, Rotary, Kiwanis, and Civitan clubs, which the IRS recognizes as not being primarily for entertainment. The situation is less clear for clubs like the Masons or Shriners because the IRS did not name them in its regulations. For more information, please visit our website at https://lnkd.in/gfw4pp8k.

Late Summer Tax Checkup – Did You Know? Every year, millions of Americans face the disappointment of an unexpectedly large tax bill in the spring. Often, those bills occur because people did not adequately plan for the tax impacts of their activities the previous summer. A late summer or early fall tax checkup can help you stay up to date with your payments, protecting you from disheartening April surprises. Here are some key questions to consider when reviewing your tax situation: - Did you take on a seasonal or part-time job for the summer? - Did you earn summer income as a gig worker, freelancer, or independent contractor? - Did you receive other income not subject to tax withholding, such as interest or dividends? - Did you sell valuable assets like antiques, cryptocurrency, artwork, jewelry, collectibles, stocks, or musical instruments at a gain? - Did your tax filing status change (for example, because you got married)? Any of these circumstances could result in your regular paycheck withholding being insufficient to cover your tax obligations. You can use the IRS Withholding Estimator tool (link below) to check whether your payments are staying on track. If not, you may need to submit a new Form W-4 to your employer to request extra withholding or make quarterly estimated tax payments. A tax professional can help you analyze your tax circumstances now, so you can make the right moves to bring about a favorable outcome later. IRS Withholding Estimator: https://lnkd.in/g9nq8HX