Category: Tax
Michigan First-Time Home Buyer Savings Program offers favorable state tax treatment to new homebuyers
The Michigan First-Time Home Buyer Savings Program was created in 2022 to assist first-time home buyers (a Michigan resident who has not owned or purchased a single-family residence during a period of 3 years before the date of the purchase...
Caretakers may exclude certain Medicaid waiver payments from income
Family members who care for a disabled relative in their shared home and receive Medicaid payments for this care may qualify to exclude certain Medicaid waiver payments from their gross income calculation. IRS Notice 2014-7 offers guidance on how these...
Employer-provided tuition assistance programs must meet requirements
An employer-provided educational assistance program is a formal plan that offers educational benefits to employees*. The program qualifies under these conditions: It does not favor highly compensated employees**. Exclusion from the program based on a collective bargaining agreement is disregarded...
Tax consequences of compensation clawbacks for issuers and executives
Corporate executives with lucrative contracts may face "clawbacks," where previously paid compensation is reclaimed due to policy violations, breaches of agreement, or legal infractions. This situation triggers tax considerations both for the company initiating the clawback and the executives affected....
New IRS proposal could affect timing of inherited IRA distributions
If you've inherited an IRA in 2020 or later, take note: the wait-until-the-tenth-year approach to distributing the account might no longer work. Most have interpreted the IRS' regulation of the 2019 SECURE Act to mean that an IRA inherited in...
SR Client Question: Is a salary advance taxable?
Some employers allow employees to request a salary advance, receiving their paycheck earlier than the standard payday. For example, if a paycheck is issued on the 1st of the month instead of the usual 15th, the advance received on the...
“Staked” cryptocurrency value may no longer be taxed as income
A recent settlement offered to taxpayers who filed a suit against the IRS may indicate a change in how staked cryptocurrencies are taxed. Previously, staking income was treated similarly to interest income. Many crypto exchanges were handling it like that...
SR Client Question: Do I issue a Form 1099 to a law firm collecting fees for my medical practice?
When a medical practice or another business hires a law firm or third party on a contingent basis to collect overdue fees or invoices, it triggers obligations under two distinct sections of the tax code. If the law firm or...
SR Client Question: Are disability benefits paid out under an employer group disability plan taxable to the employee?
If an employer offers group term disability insurance as a fringe benefit to employees, any benefits received under this plan are typically taxable to the employee. However, according to IRS Revenue Ruling 2004-55, the employer has the option to design...
SR Client Question: Do I need to pay tax on the sale of an asset paid out over many years in the year it’s sold or as I collect the installments?
Installment payments received for assets, such as proceeds from a stock sale spread out over several years or a seller-financed mortgage, allow the seller to defer recognizing the income tax liability over the period the payments are received. Under IRS...