Passenger automobiles that are propelled solely or significantly by electric power have been in the news lately, thanks in part to the buzz surrounding the Tesla Model 3, an “economy” model set to be priced at $35,000 and available in late 2017 or early 2018. Given all the recent media attention, this seemed like a good time to remind you that federal tax credits of up to $7,500 are still available to help offset the purchase price of electric vehicles. The IRS has devoted a section of its website to explain how the credits work, and provide a list of all the manufacturers and models for which a credit is still available, including the current amount of the credit […]
Since compensation is subject to employment taxes (i.e., primarily Social Security and Medicare taxes) and distributions to shareholders are not, many S corporation owners reduce their compensation and increase their shareholder distributions in an attempt to avoid the employment taxes. In some cases this is justifiable, and in some it is not. The IRS is well aware of this issue; in fact, one of the IRS’s hottest audit triggers for S corporations is insufficient compensation paid to employee-shareholders.
The Journal of Accountancy recently published an article that provides nine steps to help S corporations reduce the likelihood of an IRS examination for unreasonable owner compensation. Read the article here.
Effective as of the 2nd calendar quarter beginning April 1, 2016, the Internal Revenue Service has increased the interest rates by 1% for all non-corporate and corporate taxpayers.
For taxpayers other than corporations (individuals, trusts, etc.), the overpayment and underpayment rates have increased from 3% to 4%.
The corporate underpayment penalty has increased from 2% to 3% and the interest rate on corporate overpayments exceeding $10,000 has increased from 0.5% to 1.5%. The underpayment penalty for large corporations has also increased, from 5% to 6%.
These rate increases are due to the increase in federal short-term rates that took effect February 1, 2016.
California rates will remain unchanged throughout the 2nd quarter (June 30, 2016).
More details regarding the rate increase can be found on the IRS […]
The IRS has issued a Fact Sheet (2016-8) that highlights major tax changes for 2015, including the renewal of many key taxpayer-favorable benefits through the PATH Act, a new way to save for retirement through myRA accounts, changes resulting from the Affordable Care Act, etc. Click here for the complete IRS Fact Sheet.
In addition to our own personal experiences, our clients have been contacting us regarding predatory emails and phone calls that they have received. These emails and phone calls are placed with the purpose of intimidating or tricking you into giving up personal information, placing you at risk for identity theft. They appear to come from trusted places like the IRS, law enforcement agencies and your own family and friends.
The IRS has been very vocal about the fact that they will not send out unsolicited emails and will not make phone calls threatening lawsuits or jail. They have published an informative article about ways you can protect yourself from these phishing scams. Click here for the IRS article.
They have also […]