Stranger, Tallman & Lautz Accounting

  Tax-Saving Tips   March 2022 New Hope for Restoring and Fixing the Employee Retention Credit   As you may remember, two bad things happened to the Employee Retention Credit (ERC):   1.       On November 15, 2021, Congress retroactively repealed the ERC for the fourth quarter of 2021 (except for start-up businesses). 2.       On August 4, 2021, the IRS issued the clearly irrational Notice 2021-49, stating that a corporate owner with certain living relatives does not qualify for the ERC.   Hope in the House   On December 7, 2021, Rep. Carol D. Miller (R-WV-3) and three co-sponsors offered H.R. 6161, the Employee Retention Tax Credit Reinstatement Act, which would reinstate the ERC for the fourth quarter. On the day it was presented, the House referred the bill to its Committee on Ways and Means—a good thing.   Today, there are 54 bipartisan co-sponsors. The bill has some legs. ...

  Make Sure You Grab Your Home Internet Deduction   If you do some work at home, you’re probably using your home internet connection. Are your monthly internet expenses deductible? Maybe.   The deduction rules depend on your choice of business entity (proprietorship, corporation, or partnership).   Deduction on Schedule C   If you operate your business as a sole proprietorship or as a single-member LLC, you file a Schedule C to report your business income and expenses. As a Schedule C taxpayer, you may deduct ordinary and necessary expenses, which include business-related internet subscription fees.   You can deduct your use of your home internet whether or not you claim the home-office deduction, as follows:   ·          If you claim the home-office deduction on your Form 1040, the internet expense goes on line 21 (utilities) of IRS Form 8829 as either a direct or an indirect expense. ·...

  Is Your Sideline Activity a Business or a Hobby?   Do you have a sideline activity that you think of as a business?   From this sideline activity, are you claiming tax losses on your Form 1040? Will the IRS consider your sideline a business and allow your loss deductions?   The IRS likes to claim that money-losing sideline activities are hobbies rather than businesses. The federal income tax rules for hobbies have been anti-taxpayer for years, and now an unfavorable change enacted in the Tax Cuts and Jobs Act (TCJA) made things even worse for 2018-2025.   If you have such an activity, we should have your attention.   Here’s the deal: if you can show a profit motive for your now-money-losing sideline activity, you can classify that activity as a business for tax purposes and deduct the losses.   Factors that can prove (or disprove) such intent include:   ·          Conducting th...