Potter & LaMarca LLP

If you are active-duty military personnel, you have options for free federal tax preparation.

One is IRS Free File. This program offers, online tax preparation, electronic filing, and direct deposit of refunds, at no cost.

Members of military and their families who have income of $73,000 or less in 2021 may choose from any of the IRS Free File tax software companies to help them prepare their tax returns online.

IRS Free File Fillable Forms is available for those with income of any amount and is most suitable for those who are comfortable preparing and electronically filing their own tax return.

Have you ever heard of a Contra asset account?

A contra account is a general ledger account with a balance that is opposite of the normal balance for that account classification. The use of a contra account allows a company to report the original amount and also report a reduction so that the net amount will also be reported.

"May you have all the happiness and luck that life can hold—and at the end of your rainbows ay you find a pot of gold."

-Old Irish Blessing

Happy St. Patrick's Day!

If you are a freelancer, this post is for you!

If you earned money in the gig economy—driving for a delivery app, renting out a parking space or doing doggie daycare at home, for example—you must report your income and pay taxes on it.

Depending on whether you've worked as an employee or a contractor, you may need to file Schedule C: Profit or Loss from Business. The good news: If you are considered self-employed, you may be able to deduct some car or home office expenses. The bad news: Business taxes can be a bit more complicated.

Did you know that 2022 is the last year that Real Estate investors can take advantage of the 100% depreciation bonus?

After 2022 it will decrease by 20% per year until 2026 where it will remain unless congress acts otherwise.

Don't Forget Unemployment Benefits

Unlike 2020's tax breaks, benefits you received in 2021 are taxable, so don't forget to report this income on your return. If you didn't have taxes withheld from your benefit payments, you may owe additional tax.

Don't Miss Out on a 2021 Charity Deduction

Taxpayers who take the standard deduction instead of itemizing normally can't claim a deduction for charity donations. For the 2021 tax year, however, you can claim up to $300 in donations ($600 for married couples filing jointly), even if you don't itemize. Donations must be made to a qualifying charity and the deduction applies only to cash donations and non-reimbursable expenses related to volunteering.

For 2021 only, you can also claim a deduction of up to 100% of your adjusted gross income if you made a qualifying donation of that size.

Here are some tax loopholes that cost the Government the most in terms of missed revenue:

✅ Employer contributions to healthcare
✅Reduced Cap Gains rates
✅Child & Dependent Credits
✅Deprecation

If you are a Real Estate investor, here are 3 tax strategies you need to know about:

✅ Cost Segregation
✅ Step Up In Basis
✅ 1031 Exchange

Taxpayers who take the standard deduction instead of itemizing normally can't claim a deduction for charity donations. For the 2021 tax year, however, you can claim up to $300 in donations ($600 for married couples filing jointly), even if you don't itemize. Donations must be made to a qualifying charity and the deduction applies only to cash donations and non-reimbursable expenses related to volunteering.

For 2021 only, you can also claim a deduction of up to 100% of your adjusted gross income if you made a qualifying donation of that size.

If you received a third stimulus payment in 2021, you should have received IRS Letter 6475 documenting it. You can also check your tax transcript for payment details. This information can help you determine whether to claim the Recovery Rebate Credit on your 2021 tax return. The Recovery Rebate Credit is for taxpayers who still have not received the full amount of stimulus due to them in the previous three rounds of stimulus payments—at this point, a rare occurrence.

Don't forget to claim your Child Tax Credits.

Parents may be eligible for child tax credits of $3,000 to $3,600 per child for the 2021 tax year. If you qualify, you may already have received half of your available credits as advance child tax credit payments between July and December. You can claim the remaining half of your credits on your 2021 taxes using Schedule 8812.

Make sure to double-check for accuracy. If your numbers don't match up with IRS data, the agency will flag your return. You can check your numbers using IRS Letter 6419, which details how much taxpayers have received in advance child tax credit payments. If you can't find your IRS letter, use your tax transcript to verify your economic impact payment amounts.