80: Ask The Taxgirl - Answering Listener Questions

01/25/22 • 29 min

The Taxgirl Podcast discusses tax news, tax info, and tax policy. With so many taxation-related rules, facts, and updates, it's easy to be left with questions about tax processes. Luckily, the Taxgirl mailbag allows readers and listeners to submit their tax questions for Kelly to address.

What questions do listeners want to ask the Taxgirl?

Can people make money "under the table" that is not reported to the IRS or recorded as a form of employment? Is this wrong, and what are the repercussions of choosing not to report this income?

How do Social Security taxes, Medicare taxes, and income reporting work for freelancers or self-employed people?
What are the disadvantages to "working under the table" regarding benefits, retirement contributions, employment records, and payment conflicts?
How are annual loss limits applied to losses and gains in the stock market? Are there annual losses that you can carry forward to later years after you've exhausted your capital gains?
If you receive money as gifts, do you need to report the money to the IRS? Is there any scenario where this money could be excluded?
Can people receive money gifts over $15k in multiple payments so that it is not taxed, or would this be considered structuring payments? What tax issues can accompany actions taken with the intent to avoid tax payments?
How are monetary gifts taxed? How often does gift taxing affect middle-class taxpayers?
How do reporting requirements affect cash deposits into bank accounts? If someone were to make a deposit of over $10,000, would the bank report it, and what would happen?
Why might someone be denied a tax refund advance loan? If someone is turned down, can they reapply elsewhere?
Can social media influencers/creators write off their college tuition as a deductible expense related to their business? What qualifiers make a business expense deductible?

More about Kelly:

Kelly is the creator and host of the Taxgirl podcast series. Kelly is a practicing tax attorney with considerable experience and knowledge. She works with taxpayers like you every day. One of the things that she does is help folks out of tax jams, and hopefully, keep others from getting into them.

You can find out more about Kelly here and you can follow her on Twitter, Facebook, Instagram, and Linkedin.

To subscribe to the podcast (it’s free!) using Apple, Spotify, or your favorite listening app, click here.

Links:

Kelly’s Website – Taxgirl

What questions do listeners want to ask the Taxgirl?

Can people make money "under the table" that is not reported to the IRS or recorded as a form of employment? Is this wrong, and what are the repercussions of choosing not to report this income?

How do Social Security taxes, Medicare taxes, and income reporting work for freelancers or self-employed people?
What are the disadvantages to "working under the table" regarding benefits, retirement contributions, employment records, and payment conflicts?
How are annual loss limits applied to losses and gains in the stock market? Are there annual losses that you can carry forward to later years after you've exhausted your capital gains?
If you receive money as gifts, do you need to report the money to the IRS? Is there any scenario where this money could be excluded?
Can people receive money gifts over $15k in multiple payments so that it is not taxed, or would this be considered structuring payments? What tax issues can accompany actions taken with the intent to avoid tax payments?
How are monetary gifts taxed? How often does gift taxing affect middle-class taxpayers?
How do reporting requirements affect cash deposits into bank accounts? If someone were to make a deposit of over $10,000, would the bank report it, and what would happen?
Why might someone be denied a tax refund advance loan? If someone is turned down, can they reapply elsewhere?
Can social media influencers/creators write off their college tuition as a deductible expense related to their business? What qualifiers make a business expense deductible?

More about Kelly:

You can find out more about Kelly here and you can follow her on Twitter, Facebook, Instagram, and Linkedin.

To subscribe to the podcast (it’s free!) using Apple, Spotify, or your favorite listening app, click here.

Links:

Kelly’s Website – Taxgirl

Previous Episode

79: The OECD Global Minimum Tax Deal and What to Expect

The Organization for Economic Cooperation and Development (OECD) recently released details and proposed legislation on its global minimum tax plan. However, questions still linger regarding the details of the plan and the practicality of its proposed timeline.

What future developments could we expect to occur as a result of the OECD global minimum tax deal?

On today's episode of the Taxgirl podcast, Kelly is joined by George Salis to talk about the OECD’s proposed global minimum tax plan. George is the principal economist and tax policy advisor of Vertex Inc. George has over 25 years of experience in international trade and taxation compliance, tax planning and controversy, fiscal regulation and tax economics consulting.

Listen to Kelly and George discuss the OECD’s global minimum tax plan:

Kelly and George discuss the reasons the global minimum tax plan was created, and how the OECD’s plans for global minimum taxes have changed over the years.
The OECD’s proposed legislation would make changes to the way many other nations have previously been implementing their minimum tax rates. Would the proposed plan’s frameworks be inclusive to these nations that are directly affected by this deal?
By now most nations have signed on with the plan, so what does George believe is the next step? George provides his input, and mentions the ways COVID-19 could impact factors relating to the proposed legislation.
What are the differences in economic challenges and obstacles affecting the United States as compared to other countries that will be influenced by this tax plan? Kelly and George discuss how these countries may choose to move forward, or whether they believe these countries would look to the US as an example for guidance.
George believes that certain critical contingencies that have to have to be set in place for a multinational tax convention to take place, and explains how each of them would relate to this process.
How would this tax agreement influence the business world with regards to economic competition? Does George believe that this change would be artificially increasing economic competition, or decreasing it, and if so how?
There are two pillars to the agreement, and a lot of media attention has been placed on pillar two, and its impact on companies in and outside the US. George discusses his opinions on this, how these pillars would be addressed, and how time may influence their impact.
Kelly and George share their thoughts about the proposed agreement with its regards to the imposition of digital service taxes on US companies.
What would George tell tax practitioners and individuals to look out for next, as important future developments that may arise regarding this tax plan?

More about Kelly:

You can find out more about Kelly here and you can follow her on Twitter, Facebook, Instagram, and Linkedin.

To subscribe to the podcast (it’s free!) using Apple, Spotify, or your favorite listening app, click here.

Links:

Kelly’s Website – Taxgirl

George Salis – LinkedIn

Vertex – Website

Next Episode

81: Impacts on the Tax Profession in 2022

It comes as no surprise that recent events have had significant effects on the economy and businesses as a result. But with inflation causing soaring prices, many tax practitioners have experienced significant impacts on their professions.

What challenges are tax practitioners experiencing in 2022, and how can they successfully navigate the effects on their professions?

On today's episode of the Taxgirl podcast, Kelly is joined by Tony Novak to talk about the impact of inflation on the tax practitioner profession. Tony is a serial small business entrepreneur in the Philadelphia area. He founded MedSave, a first-generation insurance exchange, and Freedom BenefitsTM, a benefits firm for contractor's business. He is a graduate of Delaware Valley University (BS, 1982), Temple University (MBA in Finance and Accounting, 1985), and Villanova Law School (MT, Compensation Planning, 1995). He primarily served the construction industry, including a term on the board of the National Association of the Remodeling Industry. Now his passion is promoting rural business redevelopment in South Jersey, promoting tax-free small business investments in restorative aquaculture, sustainable fishing, and waterfront recreation. He operates a sole practitioner CPA firm steps from the beach at Money Island, New Jersey that serves other entrepreneurs and investors.

Listen to Kelly and Tony discuss impacts on the tax profession in 2022:

In the competitive world of tax practices, it can be hard to survive as a small businesses accounting firm. Kelly asks Tony for his opinion on how these professionals can adjust their practices to stay in business.
How can tax practitioners identify the best billable rates for their service in a society where asking others is inappropriate?
Kelly and Tony discuss the stress that individuals in the tax profession experience and its effect on their health, personal lives, and career decisions.
Many people view hiring a tax practitioner as a discretionary cost rather than a necessary one and feel more comfortable with price shopping and deduction shopping. Kelly discusses this and its relation to the tax profession's stress on practitioners, especially those handling small businesses.
Tony and Kelly speak on the importance of managing expectations and communicating effectively with clients. They touch on the innovative ways that technology is being used in recent years to benefit small businesses, practitioners, and their communication.
What is the best method for making billing adjustments in the tax profession? How do billing methods relate to this regarding hourly rates and flat fees?
In our increasingly cost-conscious environment, how can tax professionals navigate the decision to increase their rates and the effect of their rates on the quality of their services?
Often, people don't consider the additional value that employing tax professionals can provide to them in the form of ensuring tax compliance and planning for their futures. How has this influenced the livelihood of tax professionals?
Kelly and Tony discuss pivoting and how making adjustments to one's practice can be beneficial in an economy that is constantly changing.