Wave accounting is a free alternative to Quickbooks for small business. Service companies including ride sharing workers will find the free alternative very easy to use. Gooding CPA will be going over features and proper accounting with this free accounting system in our blogs. Setup and ongoing bookkeeping can also be done for clients that don’t have the time to do their books. We look forward to showing all the reports for growing businesses.
Beginning January 1, 2023, if you buy a qualified used electric vehicle or fuel cell vehicle from a licensed dealer for $25,000 or less, you may be eligible for a used clean vehicle tax credit . The credit equals 30% of the sale price up to a maximum credit of $4,000.
The credit is nonrefundable, so you can’t get back more on the credit than you owe in taxes. You can’t apply any excess credit to future tax years.
At the time of sale, a seller must give you information about your vehicle’s qualifications. Sellers must also register online and report the same information to the IRS. If they don’t, your vehicle won’t be eligible for the credit.
Compared to free then a CPA is expensive but is doing your taxes actually free? A lot of our clients have little time to even input all their information let alone study new tax laws. Not studying or having tax knowledge can cost much more than our fees. Gooding CPA really helps clients in setting up tax planning for families and small businesses. True tax savings does not come at year end but at the start of the year. Tax strategies put into place at the start of the year help clients save a lot using generous tax credits and deductions through out the year. Please contact Gooding CPA today to see what tax strategies we can help you start today.
Our clients have many different reasons they decide to use our services. All have one thing in common and that is they needed help with their taxes. The vast majority of our clients are small business owners and their personal return. This includes realtors, electricians, plumbers, welders, dashers, farmers, landlords, retail store owners and restaurants. The firm helps the clients not only do their tax but also understand their financials at year end. Business owners are always advised to have a CPA to help them not only with taxes but also their financials. Gooding CPA would be thrilled to help you with your taxes and financials. We also have a few clients that don’t have a business but just want a CPA to do their taxes and advise them on tax issues at year end. We would be thrilled to help you to if you just don’t want the stress of doing your own taxes. Click here to start the process of having our firm do your taxes.
As an accountant for a billion dollar business many times I pulled data from our Global Financial System in to Excel for data analysis. We used a Global Financial System that allowed hundreds of people to enter data at the same time. Excel is very powerful for data analysis but runs into problems the more people use it at the same time. I recommend most business to start with excel or google sheets the first year until they start having expenses or revenue almost daily. When I started my business I only had about 50 clients and a dozen expenses. I was able to use excel to do my books. As my business grew I moved onto Zoho for easier data entry and premade reports. Gooding CPA can help evaluate if you need monthly, quarterly or yearly financials as we review your taxes at year end.
H. Ty Warner, the billionaire creator of Beanie Babies, evaded $5.6 million in U.S. taxes by hiding assets in a Swiss bank account. He pled guilty to one count of tax evasion, made full restitution, and paid a $53.6 million civil penalty. The Sentencing Guidelines provided a recommended term of imprisonment, but the district judge gave Warner a more lenient sentence: two years’ probation with community service, plus a $100,000 fine and costs. The government claims his sentence was unreasonable because it does not include a term of incarceration. The judge said it was reasonable because he took into account Ty’s history of donations and charity. Gooding CPA will never recommend risky foreign tax havens. The IRS is knowledgeable about this and pursues such cases to the full extent of the law. Contact Gooding CPA for other ways to do tax planning that will not include prison.
Highlights of changes in Revenue Procedure 2022-38
The tax year 2023 adjustments described below generally apply to tax returns filed in 2024.
The tax items for tax year 2023 of greatest interest to most taxpayers include the following dollar amounts:
The standard deduction for married couples filing jointly for tax year 2023 rises to $27,700 up $1,800 from the prior year. For single taxpayers and married individuals filing separately, the standard deduction rises to $13,850 for 2023, up $900, and for heads of households, the standard deduction will be $20,800 for tax year 2023, up $1,400 from the amount for tax year 2022.
Marginal Rates: For tax year 2023, the top tax rate remains 37% for individual single taxpayers with incomes greater than $578,125 ($693,750 for married couples filing jointly).
The other rates are:
35% for incomes over $231,250 ($462,500 for married couples filing jointly);
32% for incomes over $182,100 ($364,200 for married couples filing jointly);
24% for incomes over $95,375 ($190,750 for married couples filing jointly);
22% for incomes over $44,725 ($89,450 for married couples filing jointly);
12% for incomes over $11,000 ($22,000 for married couples filing jointly).
The lowest rate is 10% for incomes of single individuals with incomes of $11,000 or less ($22,000 for married couples filing jointly).
The Alternative Minimum Tax exemption amount for tax year 2023 is $81,300 and begins to phase out at $578,150 ($126,500 for married couples filing jointly for whom the exemption begins to phase out at $1,156,300). The 2022 exemption amount was $75,900 and began to phase out at $539,900 ($118,100 for married couples filing jointly for whom the exemption began to phase out at $1,079,800).
The tax year 2023 maximum Earned Income Tax Credit amount is $7,430 for qualifying taxpayers who have three or more qualifying children, up from $6,935 for tax year 2022. The revenue procedure contains a table providing maximum EITC amount for other categories, income thresholds and phase-outs.
For tax year 2023, the monthly limitation for the qualified transportation fringe benefit and the monthly limitation for qualified parking increases to $300, up $20 from the limit for 2022.
For the taxable years beginning in 2023, the dollar limitation for employee salary reductions for contributions to health flexible spending arrangements increases to $3,050. For cafeteria plans that permit the carryover of unused amounts, the maximum carryover amount is $610, an increase of $40 from taxable years beginning in 2022.
For tax year 2023, participants who have self-only coverage in a Medical Savings Account, the plan must have an annual deductible that is not less than $2,650, up $200 from tax year 2022; but not more than $3,950, an increase of $250 from tax year 2022. For self-only coverage, the maximum out-of-pocket expense amount is $5,300, up $350 from 2022. For tax year 2023, for family coverage, the annual deductible is not less than $5,300, up from $4,950 for 2022; however, the deductible cannot be more than $7,900, up $500 from the limit for tax year 2022. For family coverage, the out-of-pocket expense limit is $9,650 for tax year 2023, an increase of $600 from tax year 2022.
For tax year 2023, the foreign earned income exclusion is $120,000 up from $112,000 for tax year 2022.
Estates of decedents who die during 2023 have a basic exclusion amount of $12,920,000, up from a total of $12,060,000 for estates of decedents who died in 2022.
The annual exclusion for gifts increases to $17,000 for calendar year 2023, up from $16,000 for calendar year 2022.
The maximum credit allowed for adoptions for tax year 2023 is the amount of qualified adoption expenses up to $15,950, up from $14,890 for 2022
Billionaire Leona Helmsley once said only the poor pay taxes. She soon found herself serving four years in jail. Her estate had billions in property that needed furniture as a business expense. This is a common asset that allows depreciation written off over time for businesses. The key is that the furniture is for business use and not personal use. Leona would buy furniture for her house and write it off as a business expense. It is very important to have business and personal items separated. 99.9% of doctors don’t need a boat to do surgery. A doctor would need to show how owning the boat was business expense and not a personal expense. A fishing guide on the other hand would need a boat. The guide would have a much easier time proving the boat was a business expense. Gooding CPA can help you with business assets. Please contact us today for help.
Tax is mandatory and collected by local, state, and national governments from individuals or businesses to cover the costs of general government services. Not paying your taxes by not filing or figuring out what you owe can have huge repercussions. Snipes did not file a return between 1999 and 2004, or pay tax on the estimated $38 million he earned during that period. Tax became complicated since he was filming movies around the world and each government wanted to tax him. Ultimately he ended up spending some time in jail for failure to file and pay tax on income earned outside the US.
All income, earned inside and outside the country, of U.S. citizens is taxable under Sec 1, 61, 63 and others. Section 861, and accompanying regulation 26 C.F.R. § 1.861-8, list what income is earned “inside” the country, and that’s relevant only to non-residents and foreign corporations because they only pay tax on domestic income. The list is typically not important for U.S. citizens, because they are taxed on all income, whether it is earned domestically or foreign.
IRS regulations re-iterate this point, stating:
“In general, all citizens of the United States, wherever resident, and all resident alien individuals are liable to the income taxes imposed by the Code whether the income is received from sources within or without the United States.”
Lucky the code has many generous credits for foreign income including taxes paid in foreign countries. This can bring your tax down to almost zero in some cases. Gooding CPA can help you navigate these complicated issues. Contact us today for help.
So you forgot to file and wondering about the late fees. Well it depends on a few things. First is the amount of time since the deadline. Every month the fee goes up so it is best to file as soon as possible after the filing deadline. The fee does not cap until you approach 25% of unpaid taxes. This applies to each year you do not file. Read below for the exact details from the IRS.
IRS calculates the Failure to File Penalty in this way:
The Failure to File Penalty is 5% of the unpaid taxes for each month or part of a month that a tax return is late. The penalty won’t exceed 25% of your unpaid taxes.
If both a Failure to File and a Failure to Pay Penalty are applied in the same month, the Failure to File Penalty is reduced by the amount of the Failure to Pay Penalty for that month, for a combined penalty of 5% for each month or part of a month that your return was late.
If after 5 months you still haven’t paid, the Failure to File Penalty will max out, but the Failure to Pay Penalty continues until the tax is paid, up to its maximum of 25% of the unpaid tax as of the due date.
If your return was over 60 days late, the minimum Failure to File Penalty is $435 (for tax returns required to be filed in 2020, 2021 and 2022) or 100% of the tax required to be shown on the return, whichever is less.
Contact us to get started with filing your late returns. We are here to help.
A federal judge sentenced Richard Hatch to 51 months in prison for evading income taxes. A jury found him guilty of tax evasion and filing a false return for not reporting to the IRS about $1,428,000 that he earned from the “Survivor” television series and other sources. Windfalls are rate but not uncommon and the IRS expects you to pay tax on them. Many people are shocked upon winning the lottery to see the IRS take almost half. The state governments holds lottery proceeds leading to less tax cases for the IRS. Television shows may hold tax but many do now. Not all windfalls are taxable though. Insurance proceeds for instance are taxed different then lottery winnings. If you have gotten a windfall from any source then contacts us today to see what taxes may be due.
Skull horror background. Illustration Generative AI
Nicholas Cage has made some great movies and questionable business choices. He found himself owing the IRS around 14 million dollars. He was able to make a quick payment of 6 million and then started on his VOD movie saga. The IRS worked with him to pay off the other 8 million due. Cage decide the best way to pay the debt was to make a lot of lower quality movies then he had made before. Nicholas say he does not regret his roles and is proud of his work. The IRS will work with individuals that fall behind on taxes and a great example is the Nicholas Cage payment of back taxes. Always file your tax return even if you don’t have the money to pay. Not filing just makes matters worse. If you have tax returns that need to be filed contact us today to file your previous tax returns quickly.
Starting January 1, 2023 the meals and entertainment expenses are returning to the pre-covid amounts. Most client meetings are going to be 50% now instead 100% of meal cost at a restaurant. A review of your meal and entertainment expense and the return on investment from it should be evaluated now at the 50% deductible amount. Many employee provided meals still remain at the 100% deduction. This would be for long days at the office as employees try to meet a deadline for a project or task. At least half of employees need to be present when ordering food. Holiday and team building events also still remain at 100% deductible. Clients are advised to contact us if you have any questions about your meal and entertainment deductions.
Heidi Fleiss is estimated to have made $1.5million for leading a Los Angeles prostitution ring that pandered to Hollywood’s stars. She was convicted of tax fraud and sentenced to 37 months in prison. It is advised that cash based earners report all income including tips and gifts from customers. Late night workers may find themselves being audited by the IRS for reporting low income yet owning expensive cars. Does your material possessions match your income reporting?
Proper mileage tracking is important incase of an IRS audit. Mileage can be tracked using a simple excel spreadsheet or even advance phone applications using GPS tracking. Amazon has log books for as low as $10 and it is recommended to keep a book in the car at all times. Phone applications range in price from $10 a month to $50. Standard mileage rate for 2023 will be .655 per mile.
Mob Boss Al Capone was a known high spender and spent thousands on cloths, food and betting. He also did not file a tax return for many years. The FBI opened a file and started finding vendors that knew his spending habits. The IRS is looking at your spending and comparing to your income reported. Many transactions are non taxable but still need to be report on tax forms.
The busted posts will be about Celebs who found themselves in trouble with the IRS. Just a hand full of names below. We will go into detail with each one on Busted Fridays.
