The Social Security (SS) “wage base” will increase to $147,000 for 2022, up from $142,800 for 2021. Wages and self-employment income above this threshold aren’t subject to SS tax. The Federal Insurance Contributions Act (FICA) imposes SS tax and a Medicare tax on employees, employers and the self-employed. There’s no threshold for Medicare tax; all […]

Do you employ someone in your home to care for family members or do other household tasks? If so, you may owe what’s commonly called the “nanny tax.” The Social Security Administration announced that for 2022, the nanny tax will be due on a household worker’s wages when the wages exceed $2,400 for the year

When IRS examiners audit S corporation owners, do they make sure the owners are paying themselves reasonable compensation? Not always, according to a recent report from the Treasury Inspector General for Tax Administration (TIGTA). It looked at how S corp owners report their own compensation. At issue is whether the owners are “motivated to underpay

“Families come in all shapes and sizes” the IRS notes. Some may not realize that, depending on the makeup of their household, they qualify for monthly advance child tax credit payments in 2021. Qualifying children may include foster children, stepchildren, grandchildren, or the taxpayer’s siblings or other relatives. An eligible family may receive up to

The Earned Income Tax Credit (EITC) was designed to keep low-income families out of poverty. It’s “refundable,” which means eligible individuals can receive a refund even if they don’t owe any tax. The IRS has stated that there’s a significant amount of EITC fraud because individuals falsely report information in order to claim an EITC

From 2017 to 2019, the IRS conducted nearly 2 million “correspondence” exams (or audits) and recommended approximately $12.2 billion in additional taxes, according to a Treasury Inspector General for Tax Administration (TIGTA) audit. The IRS conducts a correspondence exam if it requires additional documentation from taxpayers. The TIGTA audit was initiated to assess the IRS’s

Some businesses fail or just close for many reasons including the impact of COVID-19 and the resulting labor shortages. Business owners who close their doors must fulfill certain federal tax responsibilities and inform the IRS of their plans. Among the steps to take are: filing a final tax return; paying final compensation to employees and

When we give money to charity, we want it to be used wisely. Unfortunately, a great deal of money given to charity is stolen by criminals. Charity Fraud Awareness Week runs from Oct. 18-22 and the IRS is one agency highlighting the dangers. For example, cybercrime is on the rise and includes attacks on charities,

Negotiations continue in Washington, D.C., over the future of President Biden’s agenda. Tax law changes may be ahead under two proposed laws, the Build Back Better Act (BBBA) and the Bipartisan Infrastructure Bill (BIB), also known as the Infrastructure Investment and Jobs Act. The final provisions remain to be seen, but the BBBA and, to

Accountants love codes.  Whether it’s the tax code or codes to fill out forms for our clients.  One code that can come in handy is the good old bread tie code.   Did you know that the color of the twisty tie can generally point to the day the bread was made?  Each color is a different