Easier Accounting

Photo by BBTree2012

Biden is really pushing his vaccination numbers since they have slipped in the last week.

In an effort to encourage people to get vaccinated, the Biden Administration released a statement Wednesday adding a tax credit for employers. “Every employee should get paid leave to get a shot, and businesses should know that they can provide it without a hit to their bottom line,” Biden said in a speech at the White House. “There’s no excuse for not getting it done.”

The new tax credit will allow paid time off for employees to get the vaccine and paid time off for recovery. Though the side effects vary, fever, chills, and nausea are among the most common and can come about 1-3 days after getting vaccinated.

That’s roughly three days of paid time off and an estimated 2 hours, assuming the first dose doesn’t affect the person enough to need it. The tax credit will cover up to $511 per day for ten workdays (or 80 hours of work) for businesses with 500 employees or less.

Biden is also encouraging employers to share accurate information on vaccines to urge their employees to get vaccinated. The recent dip in those getting vaccinated is only within this week and not dramatic. Biden reached his goal of 100 million vaccinations within 58 days of setting it. He expected to need 100 days to get that many shots out. 

Roughly 26% of the U.S. is vaccinated, according to the CDC. The CDC reported around 3.4 million vaccinations on April 13 and down to only 3 million on Tuesday. Most adults are eligible, but the number has gone down since that. 

This new tax credit may incentivize business owners to encourage their employees to get vaccinated, but it’s still not enforced. 

Photo By Tech Daily 

The pandemic opened a new interest in stock trading because you can do it from the comfort of your home, and for those who lost their jobs, it’s a way to make some money.

Sounds great, right? Unfortunately, investors who traded on platforms like Robinhood, SoFI, Public.com, and other trading apps in 2020 are realizing that taxes make a big dip into those gains. With tax season well in swing, paying back on those capital gains is becoming a frightening reality. 

These platforms create an easy way to trade stocks, but it’s not easy to make moves that reduce taxes on them. A few of those apps don’t allow users to put that money in accounts like IRAs that would lessen that tax blow which some users definitely need.

It’s also difficult for investors to track their “wash-sales,” which allows investors to trade “a security with a loss” and buy a similar one within 30 days. The wash-sale rule restricts investors from reducing a capital loss on that sale from a capital gain. 

Those platforms make it difficult for users to implement a common tax-reducing strategy called “specific-lot-identification.” Investors use this technique to lower their taxes by picking which share to sell if they have multiple lots purchased and varying prices and aren’t selling them. 

The biggest issue is that the tax law lets investors with taxable accounts offset their losses they sustain when they sell a stock to negate taxes on capital gains. Losses can counterbalance up to $3,000 on other income like wages. Plus, unused losses can cycle into future use against gains.  

Investors are finding that not being able to sell lots they choose has significant tax implications. Those big bucks you made from that bitcoin stock? You should consider putting some of that toward the taxes you’ll owe next year. 

There are S-Corp and C-Corp but have you heard of a B-Corp? 

Don’t be fooled by the name because it has nothing to do with taxes. Small businesses are looking to make a profit and appeal to customers on a social and environmental level. A B-Corp certificate is a trending certification that small companies are looking to apply to show their dedication to their workers and customers. It evaluates a business’s operations model and how it treats its employees, customers and how the product or service affects the community. A B-Corp certification shows that a company meets the highest standards for its performance and how it operates.

B Lab, the firm that certifies companies, says, “Certified B corporations are a new kind of business that balances purpose and profit. They are legally required to consider the impact of their decisions on their workers, customers, suppliers, community and the environment.”

The B-Corp certification ensures that companies are legally conscious of how they address diversity and inequality in the workplace and how these companies use their profits to a “greater end.” 

Often, those looking to get hired evaluate a company’s reputation for how it treats its employees and what the company stands for. Companies that have been certified are a beacon for those looking to find a job with environmental consciousness and diversity in mind. 

It may seem like an easy process, but it’s actually quite difficult to get certified. The application process is a 200 question assessment test and needs a minimum score of 80 out of 200 to start the review process. There a background checks on the company, business models, and of course, there is an annual certification fee. The business must also be transparent about things like past complaints, fines, and corporate practices.

B-Corp certifications are trending right now, so the review process is taking 6-10 months. It’s not easy to qualify as 1 in 3 that submit will actually become certified. However, if a company does become certified, they join 3,900 other businesses in 74 countries. It has networking benefits as well as becoming part of a trending movement. 

In this day and age, social media makes it easy to be either praised or demonized for how you treat employees and customers. A B-Corp certification shows the value of a business to its community and its dedication to being socially aware. 

There is an equity discount on that certification if the business is at least 50% owned by groups that are:

Black

Indigenous

People of color

Women or female-identified

People with disabilities

Veterans

LGBTQ

The business must also have less than $5million in annual revenue to qualify for “special pricing.”

A B-Corp certification, though relatively new, is already very popular and worldwide. It may not be for everyone, but it might instill trust from the local community in that business and practices. 

Photo Credit: 401(k) 2021 

If you're an investor, entrepreneur, or save your money from the comfort of a different state, you'll want to pay attention to this. 

A bill introduced last year in 2020, the Protecting Retirement Savers and Everyday Investors Act, is becoming a real possibility. The Hudson Institute came up with the Main Street Tax. It would lower the value of certain tax credits and get rid of most itemized deductions. This tax would ensure that entrepreneurs, investors, and savers are taxed two times on a single purchase.

States like New Jersey levy taxes on data processing while New York levies taxes on the exchange. 

Say you live in Missouri and traded stock through a company that is in New Jersey. Not only will Missouri tax you at the state level, but so will New Jersey for having traded electronically. 

Without the Protecting Retirement Savers and Everyday Investors Act, states can levy taxes on out-of-state residents. Both the federal and state FTTS bring about volatility, lower liquidity, lower the value of assets, among other things. So, it would hurt the economies of the states more than help them. 

FTTs are unavoidable, but at this level of taxation, which would cost investors, savers, and entrepreneurs two times the transaction tax, lawmakers would get involved.

Two House of Representatives members stepped in to introduce the Protecting Retirement Savers and Everyday Investors Act. Rep. Patrick McHenry (R-NC) and Rep. Bill Huizenga (R-MI) argued for the sake of the middle-class whom this would impact and the entrepreneurs who use stock trade to help the economy and their businesses.

This bill would protect non-residents from the increased FFT's likely to be implemented on the federal level if passed. The two House of Representatives members argued that this would hurt the economy and went against President Biden's claim to help those in the middle class. 

It's not all bad, but for small businesses and investors, it could be devastating. On the upside, the Main Street Tax wants to get rid of Medicare payroll tax. That would be nice as a business owner, but there is another downside I haven't mentioned yet. The Tax Foundation says that the Main Street Tax would also make all tax credits non-refundable, get rid of the head of household filing status, and makes sure that interest deductions go away.

Photo Credit: Mike Lawrence https://creativecommons.org/licenses/by/2.0/

When tax season comes around, so does the thought of amended reviews. As business owners, keeping track of everything financial can seem like a hassle, and hiring an accountant is the way to go. 

There's way more to it than just finding any old accountant. Finding the right accountant who is up to date on the policies and works for your benefit is vital. Getting a new accountant willing to work with you and do an amended review is essential for your peace of mind and finances. 

The tax Manager at Easier Accounting, Jared Hall, says that different accountants have different opinions and stances on the same tax code. When switching CPAs, having the new one do an amended review can be beneficial to you. "An older CPA that's been doing taxes for 30 years that is just going through the motions and data entry, they’re not up to date on new laws (especially with covid) they’re still in their old ways. Now a newer accountant might be more up to date or have more information and would have more time to research and actually help clients," Hall said. 

At Easier Accounting, having a second opinion on a tax return is essential, so that's why they do it. Amended reviews are most beneficial for businesses to see if the previous accountant missed something to help lower taxable income. They will only amend if it's worthwhile to do so. The review is a way to see if there's a possibility of a refund if they do amend. At Easier Accounting, when preparing returns, they request two prior years to review and look for errors. 

Hall says that when new clients come to them, such as business owners, there usually is something they can do for an amended review. With W-2 employees, it's pretty black and white. With the W-2 being an official government document, there's not a lot that your accountant can do. 

If you're looking for a new accountant and have trouble choosing someone different from the one you have now, there are a few things you'll want to ask them. "Like a financial advisor, you'll want to question the accountant about their stance, education levels, how long they've been doing taxes. An older CPA is not always the best CPA. Someone who just got a master's and passed the CPA is the most up-to-date person on the tax law," Hall said. 

Even though they may not have the experience, they will have the most current knowledge. If that accountant works for someone who has the experience, they will do the job correctly. That's the best way to ensure you're comfortable giving your tax information over to someone new. Having an accountant that's part of a team structure is the best way to ensure that everything is good to go and your accountant isn't overloaded and able to focus on you. 

After finding a new accountant that fits what you need, you'll want to find the proper time to have your accountant do an amended review. That is not in the middle of tax season. Generally, the off-season is the best time to have an amended review done unless it's necessary during the busy season.