Retirement Withdrawals, Home Purchases and the 10% Early Withdrawal Penalty
If you take money out of a retirement account to buy a house (for example to make a down payment), you can avoid the 10% early withdrawal penalty … but only on IRA withdrawals. The rules on retirement withdrawals are tricky and vary between 401(k) accounts and IRAs. With home purchases, you can take money […]
Making IRA Contributions After the End of the Year: Good or Bad?
I usually advise my clients against making IRA contributions for the prior year after the year has ended. Let’s back up. What are we even talking about here? IRA Contributions After Year-End A taxpayer who qualifies to make a deductible IRA contribution (WARNING: not everyone does qualify!) can make a contribution up to the due [...]
Making IRA Contributions After the End of the Year: Good or Bad?
I usually advise my clients against making IRA contributions for the prior year after the year has ended. Let’s back up. What are we even talking about here? IRA Contributions After Year-End A taxpayer who qualifies to make a deductible IRA contribution (WARNING: not everyone does qualify!) can make a contribution up to the due […]
Revisiting (Again!) Shareholder Wages and the ERC
UPDATE 8/4/21 WITH AN OFFICIAL ANSWER: IN MOST CASES, SHAREHOLDER WAGES WILL NOT COUNT. SEE IRS NOTICE 2021-49, AND MY MOST-RECENT BLOG POST ON THE SUBJECT. ALL OF THE ANALYSIS BELOW IS RENDERED MOOT BY NOTICE 2021-49. ALSO NOTE THAT SOME OF THE LINKS BELOW MAY NO LONGER WORK, AS I HAVE SIMPLY DELETED OLDER […]
Tilting at Windmills Again, Or, Don’t Clients Have a Responsibility Too?
Here I go again on a writing spree about articles from the “experts” and the complaints of clients about how accountants aren’t doing enough. The latest comes from a survey from Canopy, published in Accounting Today (link here) which as usual maligns accountants, we’re failing our clients, blah blah blah. From the survey: Over half […]
Another ERC Question: Wages Paid or Wages Incurred?
Another employee retention credit has come up. The question was submitted to me by an attendee in one of my webinars: Pertaining to wages paid in the first quarter after 3-12, does the entire paycheck qualify or only the portion of the paycheck that would be for days paid for hours worked after 3-12? The […]
FFCRA Leave and the PPP
The Families First Coronavirus Response Act (FFCRA) requires businesses with fewer than 500 employees to provide 2 weeks of paid sick leave to employees who contract COVID-19. The employer then receives a tax credit for those wages paid. Other nuggets about the leave: The credit is wages paid PLUS employer-side Medicare tax. The employer does […]
Tax Season 2020: The Lament of the Solo Tax Practitioner
Even before COVID-19 happened, I had said this was the worst tax season ever. COVID was just the rancid cherry on top of a moldy cake. It’s easy to be negative and cynical — social media almost demands this attitude, I think. But I am not being cynical here. I spent nearly 3 hours writing […]
How Do Sole Proprietors Prove Usage of Funds for PPP Loan Forgiveness?
UDPATE: Not so fast on this. It looks like loan forgiveness for a sole proprietor is based on taking 2019 net income, dividing by 52 and multiplying by 8. Read this article in Forbes: https://www.forbes.com/sites/anthonynitti/2020/04/15/ten-things-we-need-to-know-about-paycheck-protection-program-loan-forgiveness/#27dbd8953291 And also see the AICPA frequently asked questions on this subject. https://www.aicpa.org/interestareas/privatecompaniespracticesection/qualityservicesdelivery/sba-paycheck-protection-program-resources-for-cpas/sba-payroll-protection-program-faqs.html Because of this new guidance, I am striking […]
