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What’s new for freelancers in tax year 2022?

Do you use apps like PayPal, Venmo, or Square to accept freelance business payments? If so, you’ll need to pay close attention to the new tax reporting changes affecting these platforms that go into effect this month, especially if you do a significant amount of business through them. In an effort to reduce the amount of unreported, taxable income from these payment platforms, the IRS is now requiring digital payment app businesses to report, on a Form 1099-K, each of their user’s business transactions (defined as a payment for a good or service). Given that the threshold for reporting was

Cryptocurrency Taxes 101: What You Need to Know About Filing Virtual Currency on Your 2022 Taxes

What is cryptocurrency and how does it impact your taxes? As more people are investing in cryptocurrency, how complex can this get if they do their own taxes? What are some factors they need to keep in mind? While cryptocurrency (crypto) investors were expected to meet the same reporting standards when it came to paying tax and reporting profits and losses to the Internal Revenue Service, the passage of the Infrastructure Investments and Jobs Act (IIJA) shows that the IRS is serious about enforcing, strengthening, and standardizing these requirements. You can find the reporting requirements stated in section 80603

Quick Wins for Your Tax Return: Easy to Miss Tax Deductions

What are a few items people tend to miss when they do their taxes, whether filling out their tax form themselves or using a tax software? Medical expenses (if they are significant). The IRS allows you to deduct unreimbursed expenses for preventative care, treatment, surgeries, and dental and vision care as qualifying medical expenses. You can also deduct unreimbursed expenses for visits to psychologists and psychiatrists. Unreimbursed payments for prescription medications and appliances such as glasses, contacts, false teeth and hearing aids are also deductible. The IRS also allows deductions for expenses that you pay to travel for medical

The IRS Makes Eliminating Tax Debts Easier with New Offer in Compromise Rule

If you have significant tax debt, cleaning it up may be the ultimate holiday gift that you can give to yourself as a freelance business owner. Not only will it put you more in control of your finances, it will also free you from paying burdensome interest, penalties, and fines related to back taxes. One of the ways to do this is to file for an Offer in Compromise or OIC. An offer in compromise allows you to settle past due taxes for an amount that is less than the full amount owed to the IRS. The IRS must agree

DIY Self-employed Taxes vs. Hiring a Tax Professional in 2022

Have you been hemming and hawing on whether or not to hire a professional to do your taxes? Has there been a large change in your life that has impacted your finances or maybe you just aren’t sure what you are doing? Read through some commonly asked questions and changes and then make your decision. Some people have used online tax preparation software for years. When would be the best time to consider hiring an accountant? Hiring a tax professional can save you time and will often save you money, too, because a tax professional knows the current tax code’s

Moving & Taxes: Your Questions Answered

Are you thinking of moving or doing business in another state? Read through to get some quick answers to your tax questions. What tax implications should someone consider if they are moving from one state to another? What records would they need to show, if any? From a business perspective for self-employed individuals, if you are living in one state and then move to another one and you have conducted business in both locations, then you will owe taxes in both states. Beyond the state taxes, you may also owe city and local taxes, too, so it’s important to check

Business Meals are Fully Tax Deductible this Year

If your freelance business reimburses contractors for meals consumed while traveling, you can now deduct the per diem portion of meal expenses at 100% according to new guidance from the IRS which covers tax years 2021 and 2022. If you are planning to take a client out for a holiday meal, remember that as part of the HEALS Act instated as part of the government’s COVID-19 relief program, you can deduct the expense as an eligible meal expense. This includes meals from 2021 and those you may have in 2022. This guidance applies to the period from Jan. 1, 2021,

Serious About Scaling with Crypto? The New Infrastructure Bill Shows the IRS is Serious About It, Too.

Given that the new infrastructure bill mainly allocates funding for public works projects, you may not be aware that the bill also puts in place new reporting requirements for individuals trading and using cryptocurrency which begin January 1, 2023. While cryptocurrency (crypto) investors were expected to meet the same reporting standards when it came to paying tax and reporting profits and losses to the Internal Revenue Service, the passage of the Infrastructure Investments and Jobs Act (IIJA) shows that the IRS is serious about enforcing, strengthening, and standardizing these requirements. You can find the reporting requirements stated in section 80603

Reduce Your 2021 Freelance Taxes? Charitable Gift Deductions May Help

It’s a great feeling to be able to help others—and it’s even better if you get some added benefit, too. This is the kind of win-win situation that The Taxpayer Certainty and Disaster Tax Relief Act of 2020 made possible by allowing tax payers to deduct up to $600 of charitable contribution regardless of whether they itemize their taxes or not. What does it mean for year-end freelance taxes? Essentially, this new law made it easier to deduct up to $600 in donations to qualifying charities on your 2021 federal income tax return. This applies even if you don’t itemize

Using the Employee Retention Credit? The New Infrastructure Bill May Cut the Benefits Early

The Infrastructure Investment and Jobs Act is heading to President Biden’s desk to be signed and when it is, it may mean that the Employee Retention Credit will be terminated earlier than the original guidance issued by the IRS. This means that the infrastructure legislation ends the employee retention credit (ERC) early, making wages paid after Sept. 30, 2021, ineligible for the credit (except for wages paid by an eligible recovery startup business). While there are not many tax provisions in the infrastructure legislation, (expect more extensive changes coming in a fiscal year 2022) budget reconciliation bill that remains under

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