Translations from Your Trusted Advisor.
Massachusetts has implemented two new laws in 2019 that could have significant impacts on employees, employers and/or those who rent out short-term property. Massachusetts recently sent out an email detailing who might be impacted by the new laws and included links to learn more about them.
As hurricane season begins, the IRS is encouraging preparation. Beyond stocking up on food and water you also want to prepare to have your documents safe and your valuables documented in case of disaster.
The IRS recently released new draft tax forms for 2019 and 2020. New for 2019 are Form 8995, Form 8995-A, and corresponding schedules. These forms are used for the Qualified Business Income Deduction which was new in 2018. New in 2020 is Form 1099-NEC which will be used instead of 1099-MISC to report nonemployee compensation.
Alyssa Hodges, CPA •
The IRS requires “contemporaneous” documentation for certain types of activities and tax deductions. Some of the areas this covers include mileage, meals, and support for the new 250 hour requirement for the rental real estate safe harbor. “Contemporaneous” means that you should be recording the necessary information at the same time you are doing the activity.
Donna Deos •
As being one of the few people here at Mason + Rich, PA without an accounting degree, I can tell you the title of this article scares me too. Before working here, I wouldn’t have had the first clue about what to do and I can also relate to the panic that runs through folks when they see anything from the IRS.
Fair warning: this article is probably not going to answer state specific sales tax questions you have! My purpose is to alert you to when you may have sales and use tax issues to consider for your business. States vary widely in their sales and use tax requirements, so it is necessary to delve deeply into the specifics of any state in which you are transacting. States have also become very aggressive in the collection of revenue, including sales and use tax. This issue has become more prevalent with the 2018 Supreme Court ruling, "South Dakota v Wayfair". Larger businesses generally have experts on staff in this area, but I find that small businesses are the most likely to be completely unaware of their requirements relative to sales and use tax. Use tax is also a consideration for individuals who live in states with a sales tax, but we will confine ourselves to considering use tax as it relates to businesses. This discussion will provide you with some background and general information which will help you identify states you transact in that warrant closer inspection.
New Hampshire has an Economic Revitalization Zone Tax Credit that allows for a credit for new employees hired in specific zones throughout the state. To describe this credit as simply as possible, business can get a credit for having a new project including additions or improvements to the property in certain places that are either unused or underutilized industrial parks or vacant land or structures previously used for business purposes if the new project creates new jobs.
Lena Rozzi, CPA •
What is IRC Section 1202?
As an incentive for non-corporate taxpayers to invest in small businesses, Section 1202, Small Business Stock Capital Gains Exclusion, allows for the exclusion of gains associated with Qualified Small Business (QSB) stocks. Section 1202 was initially enacted with the purpose of promoting investments in new ventures and small businesses by allowing taxpayers to exclude 50% of the gain in select small businesses, however, as capital gain rates changed, the Section 1202 exclusion was increased from 50% to 75%, and subsequently to an exclusion of 100%, effective for QSB stocks acquired after September 27, 2010.
Andrew Luce, CPA •
One of the most commonly used tax savings strategies is done when an individual or employer makes a contribution to a retirement plan. Luckily, as an individual or employer, you still have time to make a retirement plan contribution after December 31st to an employer 401(k), solo 401(k), Self-Employed Pension (SEP), or Individual Retirement Account (IRA) and deduct the contribution on your income tax return. For example, a contribution paid into your retirement plan in 2019 might be deductible on your 2018 income tax return. The following information summarizes some key facts about these retirement plans, including timing and deductibility of retirement plan contributions, among other things:
Andrew Luce, CPA •
So by now you’ve likely heard that you need to track your business mileage from your tax preparer but have been resistant to start tracking your mileage because it’s too time consuming or you’re just not aware of the rules. If time is your issue than I will admit up front I cannot help you. However, if you are not aware of the rules than I can help! The following information will help you understand what qualifies for business use vs. personal use and I’ve also include information on what type of information you’ll want to document to retain in your tax records.
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