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Category Archives: Tax Central

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Owe Taxes and Can’t Pay by the Due Date?

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on April 20, 2021 by Lake Wylie Tax Services StaffApril 20, 2021

Owe taxes and unable to pay by due dateThe vast majority of Americans get a tax refund from the IRS each spring, but what if you are one of those who end ends up owing?

The IRS encourages you to pay the full amount of your tax liability on time by imposing significant penalties and interest on late payments if you don’t. So if you are unable to pay the tax you owe, it is generally in your best interest to make other arrangements to obtain the funds for paying your taxes rather than be subjected to the government’s penalties and interest. Here are a few options to consider. Although they all have negative connotations, they are all better than the penalties and interest the IRS could impose, not to mention the time and headache of dealing with IRS communications and the possibility of wage, bank account and asset levies.

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Posted in Tax Central | Tagged Business Taxes, Individual Taxes, taxes

How Employee Stock Options Are Taxed

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on April 13, 2021 by Lake Wylie Tax Services StaffApril 13, 2021

How Stock Options are TaxedMany companies, as an incentive to employees to help grow the companies’ market value, will offer stock options to key employees. The options give the employee the right to buy up to a specified number of shares of the company’s stock at a future date at a specific price. Generally, options are not immediately vested and must be held for a period of time before they can be exercised. Then, at some later date, and assuming the stock price has appreciated to a value higher than the option price of the stock, the employee can excise the options (buy the shares), paying the lower option price for the stock rather than the current market price. This gives the employee the opportunity to participate in the growth of the company through gains from the sale of the stock without the risk of ownership.

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Posted in Tax Central | Tagged Employee

IRS to Automatically Adjust Prior Filed 2020 Returns with Unemployment Income

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on April 6, 2021 by Lake Wylie Tax Services StaffApril 6, 2021

Unemployment-Benefits-and-2020-Tax-ReturnThe IRS announced on March 31, that it will take steps to automatically refund money this spring and summer to people who filed their tax return reporting unemployment compensation before the recent law change made by the American Rescue Plan Act.

The American Rescue Plan Act, signed on March 11, allows each taxpayer who earned less than $150,000 in modified adjusted gross income to exclude up to $10,200 of unemployment compensation from taxation. Since it applies to each taxpayer, married couples where both spouses received unemployment benefits may be able to exclude up to $20,400 if married filing status. The legislation excludes only 2020 unemployment benefits from taxes.

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Posted in Tax Central | Tagged Covid-19, taxes

Understanding Tax-Filing Status

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on March 9, 2021 by Lake Wylie Tax Services StaffMarch 9, 2021

Understanding Tax-Filing StatusGenerally, when Lake Wylie Tax Service assists with completing your Tax Return, we determine your “Filing Status” for you.  However, we thought this article might be beneficial….

Filing status is determined on the last day of the year and most often is based on marital status. The two most prevalent are as follows in this week’s article.

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Posted in Tax Central | Tagged Filing Status, Tax Planning

Tax Consequences of Crowdfunding

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on February 23, 2021 by Lake Wylie Tax Services StaffFebruary 23, 2021

Tax consequences of CrowdfundingRaising money through Internet crowdfunding sites prompts questions about the taxability of the money raised. A number of sites host money-raising projects for fees generally ranging from 5 to 9%, including GoFundMe, Kickstarter, and Indiegogo. Each site specifies its own charges, limitations, and withdrawal processes. The money raised may or may not be taxable depending what the purpose of the fundraising campaign was.

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Posted in Tax Central | Tagged Crowdfunding, Tax Planning

Day Trader Rules and Tax Treatment

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on February 9, 2021 by Lake Wylie Tax Services StaffFebruary 9, 2021

Day Trading and Tax ImplicationsDay trading is neither illegal nor unethical, but it can be highly risky. Most individual investors do not have the wealth, time, or temperament to make money or sustain the losses that day trading can bring. Day trading in securities is governed by the Securities and Exchange Commission (SEC) Regulation T. Different rules apply for day traders for tax purposes than for SEC governance.

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Posted in Tax Central | Tagged Looking to Invest

Obscure and Overlooked Tax Deductions, Credits, and Benefits

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on February 2, 2021 by Lake Wylie Tax Services StaffFebruary 2, 2021

Obscure and Overlooked Tax DeductionsAs tax time approaches, here are some tax issues that taxpayers frequently overlook, ranging from obscure deductions to overlooked tax credits and benefits. Of course, not everything can be included since the tax law has grown significantly in complexity, and it would take a thick book to list everything. But besides what you are probably accustomed to, here are over 20 issues you may not be aware of and that can save you tax dollars.

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Posted in Tax Central | Tagged Tax Deductions, Tax Planning

How Biden’s Rescue Plan Might Impact Your Taxes

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on January 20, 2021 by Lake Wylie Tax Services StaffJanuary 20, 2021

How Biden's Rescue Plan Might Impact Your TaxesPresident Biden released his “American Rescue Plan” on January 14. It is a wish list of proposals he wants Congress to enact to address the COVID-19 pandemic and associated economic crisis. While some of the proposals are intended to be in effect for just one year, it isn’t too great a stretch of the imagination that these could later be extended or made permanent, as many of them have been on the Democrats’ agenda for some time. The anticipated cost of the American Rescue Plan, if all of the proposals are agreed to by Congress, is $1.9 trillion. None of Biden’s proposals are revenue raisers, and according to a January 15, 2021 Wall Street Journal report, he intends to use government borrowing to pay for his plan. Following are some of the tax-related proposals.

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Posted in Tax Central | Tagged Tax Planning

Charitable Contributions Deduction Liberalized for 2021

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on January 12, 2021 by Lake Wylie Tax Services StaffJanuary 12, 2021

Charitable Giving Deductions changes for 2021As a means to stimulate charitable contributions during the COVID crisis, Congress made two notable changes for 2020—one allowing taxpayers that don’t itemize their deductions an above-the-line deduction for cash contributions of up to $300 and another for those itemizing their deductions to increase the maximum deduction for cash contributions to 100% of their adjusted gross income (AGI).

The recent COVID-related tax relief act, passed late in December, extends and enhances those liberalized charitable contribution deduction provisions. Here is a rundown on these charitable contribution tax benefits for 2021:

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Posted in Tax Central | Tagged Charity, Covid-19, Tax Deduction

What Are the Tax Advantages of Home Ownership?

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on January 4, 2021 by Lake Wylie Tax Services StaffJanuary 4, 2021

Tax Advantages of Home OwnershipHousing is a big expense for everyone. The choice generally involves either renting or purchasing – and financing that purchase with a home loan. As of November 2020, the nationwide average for a 30-year fixed-rate mortgage was just under 3%, the lowest it has been in the last 50 years or even longer. Many individuals are taking advantage of the historically low rates to buy their first home, sell their existing home to move up to a more expensive one, or refinance their existing mortgage. Some who currently own their homes free and clear are even taking out loans to lock in the low interest rates. This article looks at the tax benefits and drawbacks of buying, financing, and owning a home.

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Posted in Tax Central | Tagged Buying a Home, Home and Mortgage

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