Summer Activities That Could Affect Your Tax Situation

Although the tax return filing deadline has come and gone, it’s never too early to start planning for next year’s tax return. With that in mind, let’s take a look at some common summertime situations that could affect your taxes:

Business Owners: Year-End Tax Planning Strategies

Several end-of-year tax planning strategies are available to business owners to reduce their tax liability. Let’s take a look:

Deferring Income

Businesses using the cash method of accounting can defer income into 2022 by delaying end-of-year invoices so that payment is not received until 2023. Businesses using the accrual method can defer income by postponing the delivery of goods or services until January 2022.

Worker Classification: Employee vs. Contractor

If you hire someone for a long-term, full-time project or a series of projects that are likely to last for an extended period, you must pay special attention to the difference between independent contractors and employees.

The Internal Revenue Service and state regulators scrutinize the distinction between employees and independent contractors because many business owners try to categorize as many of their workers as possible as independent contractors rather than as employees.

Which Educator Expenses Are Tax Deductible?

Teachers and other educators should remember that they can deduct certain unreimbursed expenses such as classroom supplies, training, and travel – even when schools switched to hybrid or remote learning models during the pandemic last spring. Deducting these expenses helps reduce the amount of tax owed when filing a tax return.

Small Business: Understanding Payroll Expenses

Federal law requires most employers to withhold federal taxes from their employees’ wages. Whether you’re a small business owner who is just starting or one who has been in business for a while–and ready to hire an employee or two–here is what you should know about withholding, reporting, and paying employment taxes.

Changing Jobs? Don’t Forget About Your 401(K)

One of the most important questions you face when changing job is what to do with the money in your 401(k) because making the wrong move could cost you thousands of dollars or more in taxes and lower returns.

10 Smart Tax Tips for Small Businesses in 2021

To run a successful small business, there are a few tax tips every owner should know to help save money and minimize their tax liability. Here are our top ten tips:

Tax Withholding for Seasonal and Part-Time Employees

Many businesses hire part-time or full-time workers, especially in the summer. The IRS classifies these employees as seasonal workers, defined as an employee who performs labor or services on a seasonal basis (i.e., six months or less). Examples of this kind of work include retail workers employed exclusively during holiday seasons, sports events, or during the harvest or commercial fishing season. Part-time and seasonal employees are subject to the same tax withholding rules that apply to other employees.

Q & A: The $10,200 Unemployment Tax Break

Generally, unemployment compensation received under the unemployment compensation laws of the United States or a state is considered taxable income and must be reported on your federal tax return. However, a new tax break–in effect only for the 2020 tax year–lets you exclude the first $10,200 from taxable income. Here’s what you should know:

TAX TIPS FOR WORKERS IN THE GIG ECONOMY

The gig economy, also called sharing or access economy, is defined by activities where taxpayers earn income providing on-demand work, services, or goods. This type of work is often carried out via digital platforms such as an app or website. There are many types of sharing economy businesses including two of the most popular ones: ride-sharing, Uber and Lyft, for example, and home rentals such as Airbnb.