Year-end is rapidly approaching as are the holidays. So, before you become distracted with the seasonal celebrations, it may be in your best interest to consider year-end tax moves that can benefit you for both 2022 and 2023.
Congress created Achieving Better Life Experience (ABLE) accounts in 2014. Prior to the creation of the ABLE accounts, individuals with disabilities who were eligible for Medicaid or federal Supplemental Security Income were limited to a maximum of $2,000 in assets, such as bank savings accounts. Now, disabled people are allowed to have up to $100,000 in one of these special accounts without jeopardizing their Medicaid or Supplemental Security Income.
November 10 – Social Security, Medicare and Withheld Income Tax
File Form 941 for the third quarter of 2022. This due date applies only if you deposited the tax for the quarter in full and on time.
November 15 – Social Security, Medicare and Withheld Income Tax
If the monthly deposit rule applies, deposit the tax for payments in October.
November 15 – Nonpayroll Withholding
If the monthly deposit rule applies, deposit the tax for payments in October.
If you are an employee who works for tips and received more than $20 in tips during October, you are required to report them to your employer on IRS Form 4070 no later than November 10. Your employer is required to withhold FICA taxes and income tax withholding for these tips from your regular wages. If your regular wages are insufficient to cover the FICA and tax withholding, the employer will report the amount of the uncollected withholding in box 12 of your W-2 for the year. You will be required to pay the uncollected withholding when your return for the year is filed.
The Small Business Administration (SBA) provides disaster assistance for homeowners, renters, nonprofits, and businesses of all sizes affected by Hurricane Ian.
Caution: The following list of qualifying counties is preliminary and can change as damage assessments are concluded.
With the recent passage of the Inflation Reduction Act of 2022, the electric vehicle credit has undergone some major changes. Although most of the changes take effect in 2023, to qualify for the current credit, vehicles purchased after August 15, 2022, are required to meet the final assembly requirement of the new law.
The Inflation Reduction Act signed into law by President Biden on August 16, 2022, gives new life to the federal tax credit for the purchase and installation costs of residential solar-power systems and provides guidelines allowing batteries to also qualify for the credit.
To help struggling taxpayers affected by the COVID-19 pandemic, the IRS has issued a notice, which provides penalty relief to most people and businesses who file or filed certain 2019 or 2020 returns late.
This includes nearly 1.6 million taxpayers who will automatically receive more than $1.2 billion in refunds or credits. Many of these payments will be completed by the end of September.
A frequent question that arises when borrowing money is whether or not the interest will be tax deductible. That can be a complicated question, and unfortunately not all interest an individual pays is deductible. The rules for deducting interest vary, depending on whether the loan proceeds are used for personal, investment, or business activities. Interest expense can fall into any of the following categories:
If someone were to craft a “Mount Rushmore” featuring the likenesses of some of the most influential musicians of all time, Aretha Franklin would undoubtedly be on it.
Born in 1942, Franklin was more than just another singer or songwriter. She was a brilliant pianist. She penned some of the most influential songs of all time. She became a massive commercial success after signing with Atlantic Records in the 1960s, essentially creating her own genre along the way. The list goes on and on.
Having said that, it’s important to note that Franklin passed away in 2018 and when she did, she left some financial troubles behind her that her estate had to take care of. How much did Aretha Franklin owe to the IRS and what eventually became of the situation? The answers to those questions require you to keep a few key things in mind.
Aretha Franklin’s Estate Tax Problems: An Overview
When Aretha Franklin passed away a few years ago, the IRS quickly determined that her estate owed almost $8 million in back taxes. All of this further complicated a situation that was already ongoing, where family members were battling it out in court (and in the public eye) to see who was owed what in terms of the assets that the esteemed singer had left behind.
Aretha Franklin left behind four children – all boys – who quickly entered into negotiations with the IRS. After years of jumping through legal hoops, it seems like all parties have reached a conclusion that they are satisfied with. After the estate makes an immediate payment of $800,000 to the IRS, Franklin’s sons are allowed to continue to question the amount that they say is owed. So while it does not seem like the situation is well and truly over, it does appear that things are moving in the right direction.
All of this paints a very interesting picture of what happens to celebrities in these types of situations. Since Aretha Franklin died, her estate has been steadily making payments to address a long-term tax bill that was left behind. As of December 2021, it was estimated that the balance was still close to $4.75 million.
Of course, a situation like this one is unique because the estate will continue to generate revenue long after Franklin herself has left us all behind. When you’re talking about an average person, someone’s ability to generate revenue essentially ends when they pass away. When you’re talking about a recording artist like Aretha Franklin, her artistry will give for generations. Companies will continue to put out new compilations of her work, monetizing those songs along the way. People will continue to buy them. Her songs will get sold to streaming services that again generate revenue.
All of this begs the question – how do you stay out of trouble with the IRS if even someone like Aretha Franklin can’t? By hiring the right professional to make sure that everything is in order all throughout the year, of course.
At that point, the question becomes – what happens to all of that money moving forward? What percentage of it is allocated to pay off the tax bill that the IRS claims the singer/songwriter owes and what percentage goes to her sons?
If you’d like to find out more information about everything going on with the Aretha Franklin estate and taxes, or if you’d just like to discuss your own situation with an expert in a bit more detail, please don’t hesitate to contact our firm today.
