Tax Consequences of Crowdfunding

Article Highlights:

  • Crowdfunding Sites
  • Gifts
  • Charitable Gifts
  • Business Ventures
  • SEC Registration
  • Crowdfunding Scams

Raising money through Internet crowdfunding sites prompts questions about the taxability of the money raised. A number of sites host money-raising projects for fees generally ranging from 5 to 9%, including GoFundMe, Kickstarter, and Indiegogo. Each site specifies its own charges, limitations, and withdrawal processes. The money raised may or may not be taxable depending what the purpose of the fundraising campaign was.

Gifts – When an entity raises funds for its own benefit and the contributions are made out of detached generosity (and not because of any moral or legal duty or the incentive of anticipated economic benefit), the contributions are considered tax-free gifts to the recipient.

On the other hand, the contributor is subject to the gift tax rules if they contribute more than $15,000 to a particular fundraising effort that benefits one individual; the...

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Wealth.Tax YouTube Channel is Live!

Exciting news! The Wealth.Tax YouTube channel has officially launched as of this week!
If you want to learn how to add 5-6 figures of after-tax cash flow in the next 90 days and add a 0 to your net worth long term, check out the channel and make sure to Subscribe.
On the channel, I will show you how to apply advanced wealth planning, tax & real estate specific strategies to increase your after-tax cash flow by 5-6 figures or more and add a 0 to your net worth for long-term generational wealth. Even better, you’ll be able to tell your CPA or advisor exactly how they can help you get there (or find a new advisor that can!).
Make sure you hit the Subscribe button and the Notification bell so you know when new videos drop! We post videos every Monday, Wednesday and Friday, every week!
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Tax Deductions Without Itemizing

tax planning taxes Apr 06, 2021

Article Highlights:

  • Charitable Contributions
  • Educator Expenses
  • Performing Artist Expenses
  • State and Local Government Officials’ Expenses
  • Health Savings Account Contributions
  • Moving Expenses for Members of the Armed Forces
  • Student Loan Interest Deduction
  • Tuition and Fees Deduction
  • Deduction for Early Withdrawal of Savings
  • Deductible Part of Self-employment Tax
  • Self-employed Health Insurance Deduction
  • Alimony Deduction (pre-2019 divorce agreements)
  • Business Pass-through Deduction
  • Retirement Plan Deductions

Most taxpayers think they have to itemize their deductions to claim them on their tax return. However, that is not entirely true. There are certain deductions that can be claimed while still using the standard deduction. Here is a list of those deductions:

Charitable Contributions

  • For 2020, non-itemizers can deduct up to $300 of cash contributions above-the-line. The $300 limits apply both to single and married taxpayers. Donations to donor-advised funds and private...
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Accelerate 5-6 Figures of Cash Flow!

Proper, optimized tax planning can yield surprising increases in cash flow -- often in the range of 5-6 figures total!  If you suspect that your tax planning is not optimized, and you think you may be leaving money on the table, contact us immediately and we'll let you know if and how we can help.

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Obscure and Overlooked Tax Deductions, Credits, and Benefits

tax planning taxes Mar 08, 2021

Article Highlights:

  • State Income Tax Refund
  • Social Security Taxes Deduction
  • NOL Carryback
  • Charitable Contribution Deduction for Non-Itemizers
  • PPP Loan Expenses
  • Military Reservist Travel Expenses
  • Child’s Private School Expenses
  • Student-Loan Interest
  • Extended Tax Benefits
  • Gambling Losses
  • Live in a State without a State Income Tax?
  • Spousal IRA
  • Economic Impact Payment
  • Economic Impact Payment Document
  • Reinvested Dividends
  • Worthless Stock
  • Lifetime Learning Credit
  • Charity Volunteer Tax Breaks
  • Self-Employed Travel Expenses
  • Self-Employed Health Insurance Deduction
  • Summer Camp
  • Medical Dependent
  • Income in Respect of a Decedent (IRD)

As tax time is upon us, here are some tax issues that taxpayers frequently overlook, ranging from obscure deductions to overlooked tax credits and benefits. Of course, not everything can be included since the tax law has grown significantly in complexity, and it would take a thick book to list everything. But besides what you are probably accustomed to,...

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Beware: These Tax Return Red Flags Could Catch the Eye of the IRS

tax planning taxes Mar 03, 2021

Tax time can be one of the most hated times of the year. Just preparing the forms is enough to be an irritant, and if you owe the government money there’s a good chance that you’re downright annoyed. But neither of those things compare to the feeling that accompanies an envelope bearing an IRS return address, alerting you to the fact that your taxes are about to be audited.

The truth is that audits are relatively rare in the United States. As much as people fear them, the IRS reports that between 2010 and 2018 only 0.6% of individual tax returns resulted in an audit. That may make you feel better, but statistically speaking that still means that more than 250,000 taxpayers had to go through the process. In many cases the audit process could have been avoided had the taxpayers simply known what we’re about to spell out for you – that there are specific triggers that send up IRS red flags and frequently lead to an audit process.

The red flags include:


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IRS Offers New Identity Protection for Taxpayers

tax planning taxes Mar 01, 2021

Article Highlights:

  • IP PIN
  • Identity Verification
  • Opt-in Program
  • Application Process

In the past, the IRS has assigned verification numbers to victims of identity theft to file their tax returns, if requested by the victimized individual. These numbers are referred to as identity protection (IP) PINs. The IP PIN is a six-digit code known only to the taxpayer and the IRS. It helps prevent identity thieves from filing fraudulent tax returns using a taxpayer’s personally identifiable information.

The IP PIN serves as the key to an individual’s tax account. Electronically filed returns that do not contain the correct IP PIN will be rejected, and paper returns will go through additional scrutiny for fraud.

The IRS launched the IP PIN program nearly a decade ago to protect confirmed identity theft victims from ongoing tax-related fraud. In recent years, the IRS has expanded the program to specific states where taxpayers can opt into the IP PIN program. Now, the voluntary...

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4 Questions Business Owners Should Consider During the 2020 Tax Season

business tax planning Feb 24, 2021

As if 2020 wasn’t challenging enough, this season’s tax-filing is going to be even more complicated than usual. Though the CARES Act and the Paycheck Protection Program were put into place to help small businesses, the old adage about “no such thing as a free lunch” is proving true once again as business owners sit down to gather their documents and realize just how big an impact the changes will make on what they can and can’t deduct, on payroll tax, and many other elements of their filing. We encourage you to speak with our office as soon as possible so that you can get some insights into the specific effect on you and your business. Start by asking these questions and go from there.

  1. I took a Paycheck Protection Program loan. How will it impact my taxes?

The PPP loans were attractive because they were forgivable if used for the intended purposes. Normally, under tax law, when debt is forgiven it becomes taxable income. However, by law the PPP loan...

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2021 Standard Mileage Rates Announced


  • Standard Mileage Rates for 2021
  • Business, Charitable, Medical and Moving Rates
  • Important Considerations for 2021
  • Switching between the Actual Expense and Standard Mileage Rate Methods
  • Employer Reimbursements
  • Employee Deductions Suspended
  • Special Allowances for SUVs 

The Internal Revenue Service (IRS), each year, computes standard mileage rates for the use of a vehicle for business, medical and moving purposes based on a number of factors, to determine the standard mileage rates for the following year.

As it does annually around the end of the year, the IRS has announced the 2021 optional standard mileage rates. Thus, beginning on Jan. 1, 2021, the standard mileage rates for the use of a car (or a van, pickup or panel truck) are:

  • 56 cents per mile for business miles driven (including a 26-cent-per-mile allocation for depreciation). This is down from 57.5 cents in 2020;
  • 16 cents per mile driven for medical or moving* purposes. This is down from 17 cents in...
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W-2 or 1099-NEC: Which Form Should Your SMB Use for Which Workers?

Filing annual wage reports is just one of the many end-of-year responsibilities expected of every business. But the task is not as straightforward as some would think. The reports get sent to the people who have received wages, and at the same time they get filed with the Social Security Administration (SSA) or the Internal Revenue Service (IRS). In some cases, they get filed with both.  The question of which is appropriate rests entirely on who is being paid and how the relationship between them and the business is categorized.

Wage reports are prepared for employees as well as for independent contractors, but each type of wage earner receives a different form for filing their income tax returns. The information that a business provides to the appropriate government agency needs to match the information submitted by the wage earner, both to ensure accuracy and that they are paying the taxes that they owe. Businesses are expected to use the correct form, and in order to do that...

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