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Month: November 2023
Business Development

Smart Tax Strategies: Employing Your Child in Your Business

Understanding the Benefits and Compliance Requirements By James C. Yochum, CPA, Corridor Consulting In today’s competitive business environment, finding tax-efficient strategies is crucial for closely-held businesses. One such strategy is employing your child in your business. This approach not only aids in income shifting but also opens doors to significant tax savings and financial planning opportunities for your child. Income-Shifting and Tax Savings When you hire your child in your business, it’s not just about getting help; it’s a strategic move. This income-shifting strategy allows your business to deduct the wages paid, while your child reports this income. In many
Real Estate Investing

Understanding Passive vs. Non-Passive Real Estate & Business Activities, and Navigating Self-Employment Taxes: A Focus On Airbnb And The 7-Day Rule

Understanding Passive vs. Non-Passive Real Estate Activities: A Focus on Airbnb and the 7-Day Rule In the complex world of real estate taxation, especially for Airbnb rentals, distinguishing between passive and non-passive income is crucial. This distinction is made often-times before it is too late, because many tax professionals are issuing guidance to prospects and clients, that just brush upon the tax law as written. They do not take the time to analyze clients particular facts and circumstances, and integrate them with the tax laws as written. The Internal Revenue Code (IRC) Sections 469 and 1402 play pivotal roles in
Business Compliance and Regulations

Navigating the Complexities of ERC Claims: Insights for Clients & Tax Practitioners

Increasing Concerns Over Potential Circular 230 Violations Among Tax Preparers As tax practitioners delve deeper into the Employee Retention Credits (ERC), they are increasingly confronted with the complexities and challenges posed by Circular 230, especially for clients involved in problematic ERC claims, or those just now getting notice of ERC Audits. Circular 230’s Section 10.21: A Liability Landmine Section 10.21 of Circular 230, a frequent point of reference among attorneys, highlights the responsibilities of practitioners in cases of non-compliance or errors in tax-related documents by clients. This section is particularly significant for those amending tax returns, as it introduces considerable
IRS Updates and Notices

IRS Kraken Crackdown: Understanding IRS Letters 6174, 6174-A, and 6173

The world of cryptocurrency has gained immense popularity over the past few years, and with it, the Internal Revenue Service (IRS) has been taking steps to ensure that crypto transactions are properly reported and taxed. The latest case that highlights the IRS’s seriousness in the news, is the IRS going after exchanges to release user information successfully such as Coinbase. Last month (October 2023) the IRS was successful through legal actions at getting the cryptocurrency exchange Kraken to release user information relating to the tax years 2016-2020 on all users who had transacted over $20,000 ( This amount includes all