The CBD Blog

Find peer advice, partner insights, and industry updates – all here in the CBD blog, ‘At The Helm’! With contributions from our entire team, we blog about the things that interest you.

U.S. Treasury to Retire the myRA Program

It’s only a few years old, but the “my Retirement Account” (myRA) program, is going away. These accounts were intended to encourage taxpayers to start saving for retirement, but too few people took advantage of the program to justify the taxpayer cost. As part of a plan by the Trump administration to assess and eliminate ineffective programs, myRAs will soon be phased out. Here’s information for accountholders about the future of myRAs.

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Business ID Theft: Is Your Data at Risk?

Cyberattacks against individual taxpayers are down, thanks to security measures set forth by federal and state tax agencies. But thefts of business data are rising, and the costs of these breaches can be significant. Here’s more on this trend, along with simple, but effective, ways businesses can help minimize the risk of tax-related identity theft.

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Revenue Recognition for Contracts: Changes Coming Soon

Revenue is the top line of your company’s income statement. It helps management, investors and lenders assess your company’s growth prospects, financial strength and strategic direction. The accounting rules for recognizing contract revenue will be changing for annual reporting periods starting in 2018 for public companies and 2019 for private companies. These sweeping changes will affect the timing of revenue recognition and the details you must disclose.

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Casualty and Theft Losses: Find the Silver Lining in Dark Clouds

Hurricanes, mudslides, wildfires, ice storms the list of possible natural disasters is extensive. Nowhere in the United States is safe from Mother Nature. But Uncle Sam offers a concession to individual taxpayers: Losses due to such casualties, as well as thefts and vandalism, may be deductible. Some exceptions and limits apply. Here are the basics, along with an overview of the tax rules for deducting casualty and theft losses for business owners.

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Understand Your Social Security Retirement Benefits

Are you or a loved one nearing retirement age? Many seniors are uncertain about their federal retirement benefits, including when benefits start, how to apply, who qualifies for survivors benefits and whether benefits will be subject to income tax. Here are the basics, along with the highlights from a recent report on the Social Security system.

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5 Recent Supreme Court Decisions that Could Affect Your Business

The U.S. Supreme Court just wrapped up its 2016 term. This spring, the top court published several opinions that will affect businesses, including cases that provide an ERISA exemption for church plans and clarify federal guidance on patents, copyrights, bankruptcy priority, and the statute of limitation for disgorgements from the Securities and Exchange Commission. In the 2017 term, a case regarding online sales and use tax charges could take center stage.

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Do You Have a Deductible Business Loss or a Nondeductible Hobby Loss?

Taxpayers who engage in an unincorporated sideline outside of their regular day jobs must understand the differences in the tax treatment of hobbies and for-profit business activities. Here’s an overview of the hobby loss rules, along with a recent U.S. Tax Court case that disallowed a taxpayer’s claim that his loss from organizing film festivals should be classified as a for-profit business activity.

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Hockey Team's Meals at Away Games Were a De Minimis Fringe Benefit

The U.S. Tax Court recently ruled that a professional hockey team’s pregame meals to players and personnel at out-of-town hotels qualified as a “de minimis” fringe benefit. Therefore, the cost of the meals wasn’t subject to the 50% limitation under the tax code. Here are the details of this case, which could have implications for businesses in the sports, entertainment and other industries.

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Why Partnership Tax Status May Sometimes Be Unwanted

In some cases involving activities with more than one co-owner, it may be desirable to avoid partnership status for federal income tax purposes. Fortunately, there are ways around being taxed as a partnership and there’s a key Tax Court decision that you can use to determine whether your multi-owner activity must be classified as a partnership.

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Know the Rules for Amending a Federal Income Tax Return

Mistakes happen. Fortunately, you can submit an amended return if you notice an error on a previously filed individual return. Claims for refunds must be filed on a timely basis. On the other hand, taxpayers who underpaid their taxes may owe interest and penalties on top of their additional tax liability. Here’s guidance on amending federal returns and dealing with past-due taxes in a cost-effective manner.

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Unlock the Biggest Possible Deduction for a Home Office

Do you work from home? You might be able to claim a home office deduction if part of your home is used for business purposes. Thanks to a tax law change in 2013, there are now two methods for claiming this deduction: actual expenses vs. the simplified method. Here’s how the deduction works, including specific requirements and types of costs that may qualify for the deduction.

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Can Your Research Credits Offset Your Payroll Tax Bill?

Qualified small businesses have a new option for using their research tax credits: They can now elect to apply their credit to the Social Security tax portion of their federal payroll tax liabilities. That may come in handy for smaller start-ups with significant research expenses and little or no profits. Here are the details of recent IRS guidance on how to take advantage of this special privilege.

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Consider Taxes before Converting Your Home to a Rental Property

It’s popular for property owners in certain markets to rent out their former residences. Doing so generates income that’s largely offset by tax deductions and allows you to potentially participate in the property’s future appreciation in value. Before making the home-to-rental conversion, however, it’s important to understand the special and sometimes confusing tax rules that apply when the property is rented and eventually sold.

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Sharing Tax Issues in the Sharing Economy

Mobile apps and online platforms have revolutionized the way many businesses offer services to consumers. Examples of the so-called “Gig” are widespread from ride sharing and vacation rentals to on-demand housekeeping and legal advice. If you decide to jump on the sharing economy bandwagon, it’s important to understand the tax rules for recognizing income, making estimated payments and deducting legitimate business expenses.

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Reclassifying Business Expenses as “Constructive Dividends”

Corporations that make payments to shareholders beware: The IRS may challenge deductions claimed for certain business expenses and other related-party transactions. An inquiry could lead to reclassification of certain payments as constructive dividends, which could have unfavorable tax consequences for the company and its shareholders. Here’s a recent Tax Court case that highlights this contentious issue.

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Are Contingent Attorneys' Fees Tax Deductible?

Individuals who agree to attorneys’ fees that are contingent on the outcome of their case may wonder if they can deduct the fees on their personal tax returns. The federal income tax treatment of contingent attorneys’ fees taken out of a taxable non-business judgment or settlement has led to litigation between taxpayers and the IRS. Here, we cover guidance on this issue and provide an overview for taxable and business-related recoveries.

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The Ins and Outs of Deducting Legal Expenses

Many individuals are surprised to discover that legal expenses usually aren’t currently deductible under the federal income tax rules. Here are some exceptions to this general rule, including two recent real-life examples that highlight when legal expenses may, at least partially, be deductible.

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Employer Can Have Info about Whether Misclassified Workers Paid Tax

Many businesses use independent contractors to lower their costs and administrative burdens. A recent U.S. Tax Court ruling provides good news for businesses that may find themselves audited by the IRS over worker classification. The court found that an employer could receive information about whether misclassified workers paid tax on the income, which would reduce the tax liability of the business.

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Financial Survival Tips for Recent College Graduates

Congratulations! It’s the moment you’ve spent the last few years working for: graduation. You’re finally part of the real world and the financial responsibilities can be daunting. You’ll have to pay bills, including student loans, and save for future life essentials, like cars, vacations, homes and even retirement. Here’s a crash course in financial survival to help you make smart choices.

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Spring Cleaning: When Can You Purge Your Old Financial Records?

Tax Day gives many people the urge to purge their file cabinets of extraneous financial records. But some people hold on to personal and business data indefinitely, because they don’t want to be caught off guard by an unexpected IRS inquiry. Here are basic records retention guidelines for individual and business taxpayers to help reduce the mounds of paperwork that are collected over the years.

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