Tax Tuesday with Toni Covey 08-18-2020

As COVID-19 and tax-related relief questions continue, Toni Covey and Jeff Webb of Anderson Advisors answer your tax questions. Do you have a tax question? Submit it to taxtuesday@andersonadvisors.

Highlights/Topics: 

• Due to the AB5 Law, my clients can no longer hire me as an independent contractor. Instead, they are hiring out-of-state contractors. Do I need to switch to an S Corp or move my company out of California? It depends and offers various options, such as a worker must be customarily engaged in an independently established trade occupation
• For a preschool that received Coronavirus relief, will the PPP loan forgiveness amount, the grants, and the EIDL advance be taxable as income? PPP loan and grants are not considered taxable income, however, an EIDL of $10,000 will not be forgiven or tax-deductible from PPP
• I have solely owned a second home long-term in New York. Do I need to file taxes separately from my wage-earning wife to minimize my capital gains tax considering my present income is limited to Social Security? No, but it primarily depends on how much the wife is earning
• My wife and I own several rental properties and manage/maintain them mostly ourselves with no other employees. Does setting up a corporation to manage the rental properties (each on their own LLC) make sense from a tax standpoint? Consider a corporation to manage the rental properties or manage the LLCs that hold the rental properties   

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Resources:

Uniform Transfers to Minors Act (UTMA)

https://www.investopedia.com/terms/u/utma.asp

Economic Injury Disaster Loan (EIDL)

https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/economic-injury-disaster-loan-emergency-advance

Paycheck Protection Program (PPP)

https://home.treasury.gov/system/files/136/PPP--Fact-Sheet.pdf

Paycheck Protection Program (PPP) Flexibility Act

https://www.investopedia.com/paycheck-protection-program-flexibility-act-of-2020-an-overview-4846944

Small Business Administration (SBA)

https://www.sba.gov/

Internal Revenue Service (IRS)

https://www.irs.gov/

Wills and Trusts

https://andersonadvisors.com/living_trusts/

Individual Retirement Arrangements (IRAs) 

https://www.irs.gov/retirement-plans/individual-retirement-arrangements-iras

Traditional and Roth IRAs

https://www.irs.gov/retirement-plans/traditional-and-roth-iras

Self-Employment Tax

https://www.irs.gov/taxtopics/tc554

Unrelated Business Income Tax (UBIT)

https://www.irs.gov/charities-non-profits/unrelated-business-income-tax

Unrelated Debt-Financed Income (UDFI) 

https://www.irs.gov/pub/irs-tege/eotopicn86.pdf

California Assembly Bill 5 (AB5)

https://www.investopedia.com/california-assembly-bill-5-ab5-4773201

Franchise Tax Board (FTB)

https://www.ftb.ca.gov/

Capital Gains Exclusion/Section 121

https://www.irs.gov/taxtopics/tc701

Charitable Organizations

https://www.irs.gov/charities-non-profits/charitable-organizations

Real Estate Professional Requirements

https://www.irs.gov/pub/irs-utl/33-Real%20Estate%20Professionals.pdf

Form 1065: Schedule K-1

https://www.irs.gov/pub/irs-pdf/f1065sk1.pdf

Form 8805

https://www.irs.gov/forms-pubs/about-form-8805

1040NR

https://www.irs.gov/forms-pubs/about-form-1040-nr

Passive Activity Losses (PALs)

https://www.investopedia.com/terms/p/passive-activity-loss-rules.asp

Schedule A

https://www.irs.gov/forms-pubs/about-schedule-a-form-1040

Schedule C

https://www.irs.gov/forms-pubs/about-schedule-c-form-1040

Section 105

https://www.irs.gov/pub/irs-drop/rr-03-102.pdf

Tax Cuts and Jobs Act (TCJA)

https://www.irs.gov/tax-reform

26 U.S. Code Section 280A

https://www.law.cornell.edu/uscode/text/26/280A

Bonus Depreciation

https://www.irs.gov/newsroom/new-rules-and-limitations-for-depreciation-and-expensing-under-the-tax-cuts-and-jobs-act

Depreciation Recapture

https://www.investopedia.com/terms/d/depreciationrecapture.asp

Healthcare Reform (Affordable Care Act) 

https://www.healthcare.gov/

Credits and Deductions

https://www.irs.gov/credits-deductions-for-individuals

Anderson Advisors

https://andersonadvisors.com/

Anderson Advisors Events

https://andersonadvisors.com/all-events/

Events@andersonadvisors.com

Anderson Advisors Tax and Asset Protection Event

https://andersonadvisors.com/asset-protection/

Tax-Wise Workshop

https://andersonadvisors.com/tax-wise-workshop/

Anderson Advisors on YouTube

https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ

Anderson Advisors on Facebook

https://www.facebook.com/AndersonBusinessAdvisors/

Anderson Advisors Podcast

https://andersonadvisors.com/podcast/