Year: 2021

Tax Evasion vs. Tax Avoidance

At the top of July, the Trump Organization and CFO faced accusations of tax fraud dating back 15 years.  The indictment suggests more than $1.7 Million in off-the-book fringe benefits such as a personal apartment rent, car payments and school tuition were paid to top level executives and not reported as income on executive’s W2s.  As a result, the executives illegally avoided paying income taxes and the Trump Organization illegally avoided paying employer taxes.  While no convictions have been made, we wanted to highlight the difference between legally and illegally reducing your taxes.

Get Your Child Tax Credit Now

In an effort to continue stimulating the economy, the IRS will allow taxpayers who qualify for the child tax credit to receive half of the funds as equal monthly payments from July through December 2021 and the remaining half at time of annual tax filing.  The IRS calculates the payment based on a person’s 2019 or 2020 tax return and will disburse payments by direct deposit if correct banking information has been provided to them.  Otherwise, checks will be mailed. 

Bookkeeping Tip

Always separate business and personal transactions to avoid comingling funds.  Open a business bank account and get a separate business credit card as soon as you decide to go through with your startup. This not only separates your accounts but also helps your business build its own credit rating to purchase assets and obtain funding that is not backed by your personal credit.  Business Owners who comingle funds run the risk of tax deductions being disqualified thus increasing tax bills.  The IRS already announced small business audits will increase by 50% in 2022, so let’s stay ready so we don’t have to get ready.

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