New Law: Time to Benefit from the Work Opportunity Tax Credit The Work Opportunity Tax Credit rewards your good deeds. And now, because of new legislation, the rules are in place for longer than usual. If you need to hire workers in your business, this dollar-for-dollar reducer of your taxes is one to know about. Congress Closes the PayPal 1099-K Reporting Loophole The PayPal loophole is going away seven months from now. You may remember the strategy where you can avoid giving 1099s to contractors and vendors when you use PayPal or a similar service as your payment platform. In the past, PayPal often did not have to provide those contractors and vendors with a 1099. According to lawmakers, this created a situation where those people who use PayPal have an easy ability to cheat (i.e., not report the income on their tax returns). How to Deal with the New $142,800 Base for Self-Employment Taxes In 1935, the self-employment tax topped out at $60. In 2021, the first part of the self-employment tax tops out at $21,848, but the 2.9 percent Medicare part continues after that without limits. Good tax planning for the self-employment tax is like an annuity: it gives you monetary returns—year after year—every year you are in business. So, plan now and consider everything from choice of entity to hiring your children. IRS Focuses on Cryptocurrency: Are You Ready? If you are looking for a wild ride, examine cryptocurrency. Not only can it rise to $55,000 and then drop to $30,000 in a matter of weeks, but it can also trigger significant tax consequences. And now, the IRS wants to know about you and your cryptocurrency activities. 2021 Retirement Plans Desktop Reference for One-Person Businesses Download your PDF copy of the 2021 retirement plans desktop reference for one-person businesses. IRS Audit Issue: SUV Built on Car Chassis When is an SUV a car, and when is it a truck? How big is the difference in deductions? Does the SUV built on a car chassis get different treatment from the SUV built on a truck chassis? IRS Arrives with Tax Assessor's Allocation to Land and Building On your rental properties, you need proof of your cost allocation to land and depreciable buildings. If you have no proof of that allocation, the IRS has started using the Internet to grab the tax assessor's allocation and use that against your depreciation deductions. Do You Owe the Nanny Tax? The tax law can jump up and bite you in unexpected places. One example of that is the nanny tax.
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W. Murray Bradford, CPA
Tax Reduction Letter