Tax codes are in constant flux. With all the proposals and laws state, city, and federal legislatures present, debate, and enact each year (Florida has produced more than 130 new laws this year alone), the average person would need to make a full-time job of reading the news just to keep up. Luckily, a person exists to do just that: the tax professional.
You may believe you are informed enough not to miss any new credits, cuts, or exemptions that apply to you or your business. But consider these recent tax developments and existing obscurities. Beyond mastering the complexities of the existing federal and state tax codes, an accountant or tax attorney ensures you take advantage of every potential money-saving opportunity (and avoid every penalty-incurring financial behavior), no matter how new or obscure.
IRA Rollover Limits
If you changed jobs several times in a short period, you probably have multiple IRA accounts active and awaiting your next move. In years past, IRA account holders could consolidate the money by rolling funds over into a new or existing account. Beginning in January of this year, the tax code now dictates that taxpayers are only allowed one rollover a year. Any amount beyond the first will potentially be subject to an early withdrawal tax and even an excise tax.
Bitcoin
The IRS legitimized the virtual currency when it made it officially taxable. Bitcoin, and any other virtual currencies, are treated as property for U.S. federal tax purposes. This means business owners, as well as individual taxpayers, who receive payments in Bitcoin are expected to include the fair market value in with their bookkeeping.
Bingo Losses
If you participate in local bingo leagues, or frequent major gambling destinations, you might be aware that any winnings you are lucky to receive are taxable as income. But did you know that you could claim your losses (up to the amount of your winnings) as an itemized deduction?
Uniform Maintenance
For uniform-wearing employees such as firefighters, health care workers, professional athletes, and delivery workers, the cost of purchasing and cleaning the required work attire is not insignificant. But the IRS allows that amount as a deductible expense.
Medically Necessary Treatments
You might reconsider joining Weight Watchers or entering a smoking-cessation program if you knew the costs are deductible—providing that they are part of a regimen to treat a disease that has been diagnosed by a doctor. Examples of other unknown deductions include clarinet lessons taken as treatment for a dental overbite, wigs used to cover up disease-caused hair loss, pregnancy tests, or having reconstructive breast surgery after a mastectomy.
The list of corporate deductions is much longer; if you would like to find out which ones are applicable to your business, contact us today! We’d be more than happy to schedule a success planning session to go over your company’s financial situation and ensure you are not leaving any money on the table.