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Are scholarships tax-free or taxable?
- Sep 14, 2020
- By Dukhon Tax
- In Tax Tips
COVID-19 is changing the landscape for many schools this fall. But many children and young adults are going back, even if it’s just for online learning, and some parents will be facing tuition bills. If your child has been awarded a scholarship, that’s cause for celebration! But be aware that there may be tax implications. Scholarships (and fellowships) are generally…
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Why do partners sometimes report more income on tax returns than they receive in cash?
- Sep 14, 2020
- By Dukhon Tax
- In Tax Planning, Tax Tips
If you’re a partner in a business, you may have come across a situation that gave you pause. In a given year, you may be taxed on more partnership income than was distributed to you from the partnership in which you’re a partner. Why is this? The answer lies in the way partnerships and partners are taxed. Unlike regular corporations,…
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Reopening concepts: What business owners should consider
- Sep 11, 2020
- By Dukhon Tax
- In Business, Business Taxes, Tax Tips
A widely circulated article about the COVID-19 pandemic, written by author Tomas Pueyo in March, described efforts to cope with the crisis as “the hammer and the dance.” The hammer was the abrupt shutdown of most businesses and institutions; the dance is the slow reopening of them — figuratively tiptoeing out to see whether day-to-day life can return to some…
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Conduct a “paycheck checkup” to make sure your withholding is adequate
- Sep 09, 2020
- By Dukhon Tax
- In Income Tax, Tax Tips
Did you recently file your federal tax return and were surprised to find you owed money? You might want to change your withholding so that this doesn’t happen next year. You might even want to do that if you got a big refund. Receiving a tax refund essentially means you’re giving the government an interest-free loan. Withholding changes In 2018,…
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Steer clear of the Trust Fund Recovery Penalty
- Jul 07, 2020
- By Dukhon Tax
- In Tax Tips
If you own or manage a business with employees, you may be at risk for a severe tax penalty. It’s called the “Trust Fund Recovery Penalty” because it applies to the Social Security and income taxes required to be withheld by a business from its employees’ wages. Because the taxes are considered property of the government, the employer holds them…
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PPP Flexibility Act eases rules for borrowers coping with COVID-19
- Jun 22, 2020
- By Dukhon Tax
- In COVID-19, Tax Tips
As you may recall, the Small Business Administration (SBA) launched the Paycheck Protection Program (PPP) back in April to help companies reeling from the economic impact of the COVID-19 pandemic. Created under a provision of the Coronavirus Aid, Relief and Economic Security (CARES) Act, the PPP is available to U.S. businesses with fewer than 500 employees. In its initial incarnation,…
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If you’re selling your home, don’t forget about taxes
- Jun 19, 2020
- By Dukhon Tax
- In Tax Planning, Tax Tips
Traditionally, spring and summer are popular times for selling a home. Unfortunately, the COVID-19 crisis has resulted in a slowdown in sales. The National Association of Realtors (NAR) reports that existing home sales in April decreased year-over-year, 17.2% from a year ago. One bit of good news is that home prices are up. The median existing-home price in April was…
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Good records are the key to tax deductions and trouble-free IRS audits
- Jun 19, 2020
- By Dukhon Tax
- In Tax Tips
If you operate a small business, or you’re starting a new one, you probably know you need to keep records of your income and expenses. In particular, you should carefully record your expenses in order to claim the full amount of the tax deductions to which you’re entitled. And you want to make sure you can defend the amounts reported…
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A nonworking spouse can still have an IRA
- Jun 08, 2020
- By Dukhon Tax
- In Tax Planning, Tax Tips
It’s often difficult for married couples to save as much as they need for retirement when one spouse doesn’t work outside the home — perhaps so that spouse can take care of children or elderly parents. In general, an IRA contribution is allowed only if a taxpayer has compensation. However, an exception involves a “spousal” IRA. It allows a contribution…
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Student loan interest: Can you deduct it on your tax return?
- Jun 03, 2020
- By Dukhon Tax
- In Student Taxes, Tax Planning, Tax Tips
The economic impact of the novel coronavirus (COVID-19) is unprecedented and many taxpayers with student loans have been hard hit. The Coronavirus Aid, Relief and Economic Security (CARES) Act contains some assistance to borrowers with federal student loans. Notably, federal loans were automatically placed in an administrative forbearance, which allows borrowers to temporarily stop making monthly payments. This payment suspension…