Individual Tax

Deferral of Stock Options or RSU Income Available Under the Tax Act of 12/22/2017

In the past, non-statutory stock options (non-ISOs or ESPPs) and restricted stock grants/RSUs were considered taxable income at FMV at exercise/vesting, potentially creating a tax problem for an employee of a privately held company, as there would be no avenue for selling some of the shares to cover the related tax liability.   Starting in 2018, a qualified employee of a qualified company can postpone recognition of that income for up to 5 years, but no later than an occurrence of a triggering event (e.g. an IPO).  The newly introduced Section 83(i) of the Internal Revenue Code provides guidance.

For more details click here.

By |June 29th, 2018|Categories: Accounting & Bookkeeping, Business Tax, Individual Tax, IRS|Comments Off on Deferral of Stock Options or RSU Income Available Under the Tax Act of 12/22/2017

Reporting Bitcoin Cash

On August 1, 2017 Bitcoin Cash split from Bitcoin.  Each investor that owned Bitcoin on or before the split received Bitcoin Cash in an amount equivalent to their current Bitcoin holdings.  Investors who were fortunate enough to receive the cryptocurrency for free must report it on their 2017 tax return as income.

Click here for more info.

By |June 18th, 2018|Categories: Accounting & Bookkeeping, Business Tax, Individual Tax|Comments Off on Reporting Bitcoin Cash

California Supreme Court Ruling Significantly Limits Independent Contractor Classification

The California Supreme Court has established new criteria for classifying workers as Independent contractors.   In Dynamex Operations West, Inc. v. Superior Court, the Court rejected the previous multi-factor test and instead issued a rigid 3-factor test, called the “ABC” test.

Under the ABC test, each of the following three factors must be met in order to classify a worker as an independent contractor:

  1. The worker must be free from the control and direction of the hiring company in performing the work.
  2. The work must take place outside the usual course of the business of the hiring company’s business.
  3. The worker is customarily engaged in an independent established trade, occupation or business.

This ruling will no doubt have a significant impact on gig companies in the Bay Area (Uber, Lyft, and DoorDash, etc.), […]

By |June 6th, 2018|Categories: Accounting & Bookkeeping, Announcements, Business Operations, Business Tax, Individual Tax, IRS, Real Estate, Retirement Planning|Comments Off on California Supreme Court Ruling Significantly Limits Independent Contractor Classification

Home Equity Loan Interest can still be Deducted (in certain instances)

The IRS clarified in its News Release on February 21, 2018 that taxpayers can continue to deduct the interest on home equity loans, if the home equity loans are used to buy, build or substantially improve the taxpayer’s home that secures the loan.

Under prior tax law (pre-2018), the interest on a home equity loan secured by the taxpayer’s qualified residence was deductible (on a loan balance of up to $100,000) even if the loan was used to pay personal living expenses, i.e., paying off credit card debts, student loans or buying a car.

Starting in 2018, the new tax law does not allow taxpayers to deduct the interest on a home equity loan if the loan was used for personal living expenses.

In order for home equity loan interest to be deductible, […]

By |February 25th, 2018|Categories: Individual Tax, IRS, Real Estate|Comments Off on Home Equity Loan Interest can still be Deducted (in certain instances)

2018 Tax Reform-Individual Tax Changes

The President signed the biggest tax reform law in over 30 years. When you file your 2018 tax returns — about a year from now — your tax return may look very different. And because most changes don’t happen until then, we have some time to learn about the changes and plan for next year. Here are a few of the biggest changes that may affect you.

  • Tax rate changes: The maximum individual rate is reduced to 37%.
  • Standard deduction increases: The standard deduction is almost double.
  • Personal exemption eliminated: You will have no personal exemption deduction for yourself, your spouse, or your dependents.
  • Increased Child Tax Credit and new Dependent Credit: The credit is increased for each child to $2,000 (up to $1,400 of which is refundable for each […]
By |February 5th, 2018|Categories: Announcements, BCo Community News, Individual Tax, IRS|Comments Off on 2018 Tax Reform-Individual Tax Changes