The US Treasury has announced that all tax returns and income tax payments due on April 15, 2020 are now due on July 15, 2020 without incurring any interest or penalties. This deferral includes any income tax due with the 2019 tax return and the 2020 first-quarter estimate up to an aggregate amount of $1 Million dollars for individuals and $10 Million for C Corporations. The 2020 second-quarter estimate is still currently due on June 15, 2020. Most states have not yet issued any 2019 tax relief provisions in relation to COVID-19. We will provide additional updates as new information from the states becomes available. For the health and safety of our clients and employees, we are asking that all tax information be sent to us electronically, via one of our secure online file exchanges, or through the mail. All completed tax returns will be delivered either electronically or through the mail. We are currently not offering in-person pick up of any tax returns. Our online tax organizer allows you to answer the questions in the tax organizer and upload your paperwork. If you have not already requested an online organizer, please email the request to firstname.lastname@example.org. […] Read More
Raffles are popular fundraisers for not-for-profits. But they’re subject to strict tax rules. State laws on nonprofit-sponsored raffles can vary significantly, but nonprofits must comply with federal income tax requirements linked to unrelated business income, reporting and withholding. Unrelated business income tax Nonprofits are required to pay income tax on unrelated business income (UBI), and funds raised by raffles often qualify as such. This is particularly true if you routinely hold raffles and they aren’t related to your exempt purpose. But raffle income can be exempted from UBI tax if the raffle is conducted with “substantially all” volunteer labor. The IRS’s unofficial guideline is that 85% or more of the labor should be volunteer. If relying on this exemption, make sure you keep records to demonstrate your level of volunteer support. Reporting obligations Raffle winnings must be reported when the amount is $600 or more and at least 300 times the raffle ticket price. You can deduct the amount of the ticket when determining if the $600 threshold is met. For example, you sell $2 tickets, and your winner receives $1,000. Because the winnings ($998) are more than $600 and more than 300 times $2, you’re required to report them […] Read More
Prepaying property taxes related to the current year but due the following year has long been one of the most popular and effective year-end tax-planning strategies. But does it still make sense in 2018? The answer, for some people, is yes — accelerating this expense will increase their itemized deductions, reducing their tax bills. But for many, particularly those in high-tax states, changes made by the Tax Cuts and Jobs Act (TCJA) eliminate the benefits. What’s changed? The TCJA made two changes that affect the viability of this strategy. First, it nearly doubled the standard deduction to $24,000 for married couples filing jointly, $18,000 for heads of household, and $12,000 for singles and married couples filing separately, so fewer taxpayers will itemize. Second, it placed a $10,000 cap on state and local tax (SALT) deductions, including property taxes plus income or sales taxes. For property tax prepayment to make sense, two things must happen: 1. You must itemize (that is, your itemized deductions must exceed the standard deduction), and 2. Your other SALT expenses for the year must be less than $10,000. If you don’t itemize, or you’ve already used up your $10,000 limit (on income or sales taxes or […] Read More
Tyler, Simms & St. Sauveur, CPAs, P.C.
Phone: +1 (603) 653-0044