Alpha’s Tax Tips

Unused Flexible Spending Accounts Balances

Unused funds in a dependent care FSA at year-end can’t be carried over, IRS confirms privately. Nor can the FSA refund you the extra money, even if you know that you cannot use the funds by December because your child’s day care after-school program is shuttered as a result of the Coronavirus pandemic. Earlier this […]

Tax Breaks for Business Cars

Buying a new or used passenger auto for your business can lead to tax breaks. If bonus depreciation is claimed, the first-year depreciation cap is $18,100 for vehicles bought after September 27, 2017, and put in use this year. The second-and third-year caps are $16,100 and $9,700. After that…$5,760. If no bonus depreciation is taken, […]

Paycheck Protection Loan Forgiveness

More bad news from the IRS for firms that took out paycheck protection loans. In May, the agency issued public guidance saying that small businesses that have their Paycheck Protection Program (PPP) loans forgiven cannot deduct expenses that result in forgiveness of the loan. The IRS now confirms companies can’t deduct such expenses paid or […]

Avoid Tax Trap on 529 Withdrawals

If you’re like many parents of children in college, your kid is currently learning remotely from home, even though you signed up for room and board at the school. Watch out for a hidden tax trap. If you’ve withdrawn funds from a child’s Section 529 plan and don’t return them, you could be hit with […]

Shift Tax Gears on Car Donation

Are you thinking about donating a car or other vehicle to charity? If you give away the car without any strings attached, you might forfeit some extra-tax saving mileage. Specify that the charity must use your vehicle in furtherance of its tax exempt-purpose. As a result, you can deduct an amount equal to the vehicle’s […]

Rescue Tax Loss for Worthless Stock

Do you own stock that has become worthless in these uncertain times? At least you may be able to salvage some tax relief on your 2020 return. Prepare to claim a capital loss for the worthless stock. The loss can offset capital gains racked up this year plus up to $3,000 of highly taxed ordinary […]

New Form Used to Report COVID-19

Filers get a new form to report a COVID-19 retirement-related easing. The 10% fine on pre-age 59 ½ payouts from retirement accounts in 2020 is waived on up to $100,000 of Coronavirus-related distributions from 401(k)’s, 403(b)’s and IRA’s. Tax on these distributions can be paid over three years, beginning with the payout year, unless the […]

Combine Benefits with Roth 401(k)

With a 401(k) plan, you can accumulate a tidy nest egg for retirement without any current tax erosion. Another retirement planning option, the Roth IRA, provides tax-free distributions in the future. But you can combine the best of both worlds. Strategy: Switch your regular 401(k) account to a Roth 401(k). If your company doesn’t offer […]

4 Ways to Max Out Biz Gifts

As a small business owner, you may give gifts to clients and customers to show your appreciation. Unfortunately, however the deduction for business gifts is limited to a paltry $25 per recipient per year. Learn all the tax angles. Then, by planning ahead, you can get the most bang for your bucks. Here are four […]

Closing a Struggling Business?

Hopefully not !! Are you thinking of shuttering your struggling business? Don’t forget taxes. The IRS is aware of the many small-business closures during the coronavirus pandemic and has redesigned its “Closing a Business” page on its website to help. The agency has information and procedures for sole proprietorships, partnerships and corporations. Among the to-dos: […]