Congress Extends Tax Exemption for Employer-Sponsored Student Loan Repayment
Congress for granting a five-year extension to a temporary tax exemption that allows employers to pay up to $5,250 annually toward each employee’s student debt on a tax-free basis. Employers looking to provide any of its workforce tax-free assistance with student loan debt should check and see if they have an existing 127 education assistance…
13 IRS Audit Red Flags
There’s no sure way to avoid an IRS audit of your tax return, but these red flags could increase your chances of drawing unwanted attention from the IRS. The IRS audited only 0.4% of all individual tax returns in 2019. The vast majority of exams were conducted by mail, which means that most taxpayers never…
Educators can now deduct out-of-pocket expenses for COVID-19 protective items
Eligible educators can deduct unreimbursed expenses for COVID-19 protective items to stop the spread of COVID-19 in the classroom. COVID-19 protective items include, but are not limited to: face masks; disinfectant for use against COVID-19; hand soap; hand sanitizer; disposable gloves; tape, paint, or chalk to guide social distancing; physical barriers (for example, clear plexiglass);…
Which form do we use – 1099-MISC or Form 1099-NEC
The IRS issued two new forms for the 2020 tax year – Form 1099-NEC and a revised Form 1099-MISC. The newly reintroduced Form 1099-NEC is used to report payments for nonemployee compensation (NEC) that were previously reported on box 7 of Form 1099-MISC. Background The IRS reported confusion among taxpayers regarding these deadlines. To alleviate…
Q&A – Timing of terminating employees
Question: We are going to terminate an employee who has not been meeting expectations, even after several warnings. Could we give the employee notice that their employment will end in two weeks? That way they have a little time to search for a new job. Answer: We would not recommend giving notice ahead of an…
Refund delays, stimulus check errors foreshadow rough tax season
Tax-refund delays and stimulus-payment hiccups could spill into the upcoming tax season as the Internal Revenue Service continues to face challenges related to the coronavirus pandemic and as Congress considers yet another round of direct payments. Millions of Americans waited months for refunds in 2020, and millions also have yet to receive some or all…
Tax Season Start Date
The IRS announced it will begin accepting and processing returns on Friday, Feb. 12, 2021. The decision was made to push back the start date by a month to allow the department extra time to prepare following the Dec. 27, 2020 tax law changes. The tax filing deadline remains April 15, 2021.
When are credit cards purchases deductible
Credit card statements are necessary to prepare your taxes. They have a record of items that were purchased with the credit card some of which may be tax-deductible on your tax returns. There is a belief that you deduct your purchases as you pay off your credit card: This belief is incorrect. When you put…
Car allowances vs. mileage reimbursement
If you use your personal car for a business, you can take a mileage deduction to save on your taxes. But what if you drive your own car for the ministry at your church? The church can provide you a car allowance or mileage reimbursement. Let’s go over the differences between a car allowance and a mileage…
What kind of records should I keep
You may choose any recordkeeping system suited for your ministry that clearly shows your income and expenses. Your recordkeeping system should include a summary of all ministry transactions. This summary is ordinarily made in some type of bookkeeping account. Supporting Documents Purchases, sales, payroll, and other transactions you have in your ministry will generate supporting…
