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Philip L. Liberatore, CPA Blog

Is It Better to Have a Tax Credit or a Deduction?

Article Highlights: Itemized Deductions Above-the-Line Deductions Business Deductions Asset-Sale Deductions Refundable Credits Nonrefundable Credits Carryover Credits Business Tax Credits People often say that an expense is “a tax write-off”; most everyone interprets this to mean that the expense will have a tax benefit. Generally, such a benefit takes the form of either a deduction or … Read More

Are You Subject to Self-Employment Tax?

Article Highlights: Self-employed Individuals Estimated Taxes Self-Employment Tax Estimated Tax Safe Harbors 1099-MISC and 1099-K Others Subject to Self-employment Tax income Not Subject to Self-employment Tax Self-employed individuals, unlike employees, don’t have someone withholding Social Security or Medicare (FICA) taxes along with pre-payments toward their federal (and state, where applicable) income tax from...

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Earned Income Tax Credit: Used, Abused and Altered

Article Highlights: Purpose of the Earned Income Tax Credit Qualifications Earned Income Qualified Child Credit Phaseout Computing the Credit Investment Income Limit Combat Pay Election Fraud Safeguards Any discussion of the earned income tax credit (EITC) needs to begin with a discussion of why Congress created it in the first place. It has a twofold … Read More

October Extended Due Date Just Around the Corner

Article Highlights: October 15 is the extended due date for filing federal individual tax returns for 2018. Late-filing penalty Interest on tax due. Other October 15 deadlines. If you could not complete your 2018 tax return by the normal April filing due date and are now on extension, that extension expires on October 15, 2019. … Read More

Who Claims the Children You or Your Ex-Spouse?

Article Highlights: Custodial Parent Dependency Release Joint Custody Tiebreaker Rules Child’s Exemption Head of Household Filing Status Tuition Credit Child Care Credit Child Tax Credit Earned Income Tax Credit If you are a divorced or separated parent with children, a commonly encountered but often misunderstood issue is who claims the child or children for tax … Read More

Tax Issues That Arise When Converting a Home into a Rental

Article Highlights: Reason for Conversion Basis Depreciation Cash Flow versus Tax Profit or Loss Passive Losses Home Gain Exclusion There are many reasons to convert a home into a rental, such as to ensure that a prior home produces income and appreciation after the owner buys a new home; to maximize the tax benefits for … Continue reading Read More

Make a Tax-deductible Donation for Hurricane Disaster Relief

With Hurricane Dorian set to make landfall as a devastating storm on the east coast, the Dream Center response team is set to deploy at a moment’s notice. The Dream Center has been responding to disasters all across the United States and around the world for over 10 years. Bringing aid to Texas, Florida, California … Continue reading...

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2019 Business Due Dates

September 16 – S Corporations File a 2018 calendar year income tax return (Form 1120S) and pay any tax due. This due date applies only if you requested an automatic 6-month extension. Provide each shareholder with a copy of K-1 (Form 1120S) or a substitute Schedule K-1. September 16 – Corporations  Deposit the third installment … Read More

Scammers are getting more creative: watch for these new phone and email rip-offs

We’re not out to steal their money — just their time. When fraudsters call to say we’re about to be arrested for tax debt, our Social Security number has been “suspended,” or a loved one is in trouble, we play along. This gives us valuable insight into how the scams operate, while wasting the time these … Continue...

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Is It Time for a Payroll Tax Checkup?

Article Highlights: Tax Reform Underpayment Penalties W-4 Modifications for 2020 Withholding Estimator Penalty Abatement Was your 2018 federal tax refund less than normal, or – worse yet – did you actually owe tax despite usually getting a refund? If so, this was primarily due to the last-minute passage of the Tax Cuts and Jobs Act … Read More

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