Estate and Tax Planning for Magicians

05/02/2023

ARE YOU A CONTENT CREATOR - like teaching magic tricks? Do you want to know what you spend is income tax deductable? We have answers.

12/20/2021

The IRS has announced 2022 the mileage rates used to calculate the deductible costs of operating an car/pickups/panel trucks for business, charitable, medical and for moving.
Starting January 1, 2022, the standard mileage rates will be:
• 58.5 cents per mile driven for business use (this is up 2.5 cents from the 2021 rate),
• 18 cents per mile driven for medical, or moving purposes for qualified active-duty members of the Armed Forces (up 2 cents from 2021), and
• 14 cents per mile driven in service of charitable organizations (the rate remains unchanged from 2021).

08/18/2021

A quick public announcement about dying without a will - what happens to all property you left behind.

03/23/2021

The IRS has announced March 2021 as "National Settlement Month" to virtually resolve taxes owed to the US Treasury and that way stay out of US Tax Court. “Virtual Settlement Day events enable the IRS to deliver meaningful resolution options to taxpayers as the nation works through the pandemic.” " said IRS Commissioner Rettig. "Virtual options are an addition to traditional methods of communication and interaction with taxpayers that the IRS will always make available under normal circumstances." Participants can speak to attorney volunteers to answer questions and assist you in settling your tax issue and keep you out of Tax Court. For more information following from the IRS, follow this link --> https://www.irs.gov/newsroom/irs-office-of-chief-counsel-unveils-national-virtual-settlement-days-effort-this-year-to-reach-more-taxpayers-in-more-parts-of-the-nation.

IR-2021-61, March 18, 2021 — The Internal Revenue Service Office of Chief Counsel has embarked on its most far-reaching Settlement Days program ever, declaring the month of March 2021 as “National Settlement Month.”

03/18/2021

IRS will automatically extend 2020 US Individual Income Tax Return due date to May 17, 2021.

The IRS announced today your 2020 Federal Income Tax Return (Form 1040) filing will be automatically extended from April 15, 2021, to May 17, 2021. More formal guidance still to come from IRS.

Payment of SELF-EMPLOYMENT TAX is also postponed.

PENALTIES AND INTEREST will start accruing on any unpaid balances as of May 17, 2021.

The postponement does not apply to estimated tax payments due on April 15, 2021.

03/17/2021

I am hearing rumors from a credible news source the IRS is considering extending tax filing deadlines for 2020 Federal Individual Income Tax Returns to May 15, 2021. More when I can verify the information from the IRS website. Until then, continue preparing for filing on April 15.

03/16/2021

Do Not Amend Your 2020 Form 1040 Just Yet To Exempt $10,200 of Unemployment Compensation.

If you reported all of your unemployment compensation in 2020 on your tax return, the IRS asks everyone not to file amended return exempting the first $10,200.00 to allow it to catch up to the recent passed American Rescue Plan Act of 2021.

The IRS just updated its website advising the first $10,200.00 of unemployment compensation received in 2020 is exempted from income. Many people have already filed their individual income tax returns (Form 1040) for 2020 reporting all of the unemployment compensation.

The IRS asks individuals who received unemployment benefits in 2020 and have already filed their 2020 tax return, not to file an amended return until IRS issues additional guidance. It has also provided information for individuals who received unemployment benefits in 2020 but have not already filed their 2020 tax return.

03/15/2021

This post discusses temporary expanded benefits in the Child Tax Credit in 2021.

Under the American Rescue Plan Act of 2021 (ARPA) there has been significant enhancements to the Child Tax Credit (CTC). These enhancements temporarily expand the eligibility for, and the CTC for tax years beginning in 2021 and require IRS to make monthly advance payments of the credit to taxpayers in July through December of 2021.
CTC temporarily expanded for 2021. For 2021, ARPA expands the CTC as to eligibility and amount, as follows:
1. The definition of a qualifying child is broadened to children who haven't turned 18 by the end of 2021.
2. The CTC is increased to $3,000 per child ($3,600 for children under age 6 as of the close of the year).
So, for 2021, the CTC is subject to two sets of phase-out rules:
o The increased CTC amount (the $1,000 or $1,600 amount) is phased out for taxpayers with modified AGI of over $75,000 for singles, $112,500 for heads-of-households, and $150,000 for joint filers and surviving spouses; and
o After applying the above phase-out rule to the increased amount, your remaining $2,000 of CTC is subject to the existing phase-out rules (i.e., the $2,000 of credit is phased out for taxpayers with modified AGI of over $200,000/$400,000 for joint filers).
If you aren't eligible to claim an increased CTC in 2021, you can still claim the regular $2,000 CTC, subject to the existing phase-out rules.
3. The CTC is fully refundable for 2021 for a taxpayer (either spouse for a joint return) with a principal place of abode in the U.S. for more than one-half of the tax year, or for a taxpayer who is a bona fide resident of Puerto Rico for the tax year.

Advance payments of the 2021 CTC. IRS will pay via direct deposit 50% of eligible CTC starting in July 2021 and will pay through December 2021. To determine your advance CTC payments, IRS will look at your 2020 return, or, if it's not yet filed, your 2019 return.

03/11/2021

This post addresses the stimulus money you received in 2020 and how much you REPORT ON YOUR FORM 1040.

The Internal Revenue Service, in Notice 1444-B, advises your 2nd Economic Impact Payment is NOT income to be reported on your 2020 individual income tax return, Form 1040. Translated, that means your second payment is tax free!

Any questions, either call the IRS at 1 (800) 919-9835, or if you do not trust the number, call me at (702) 202-4153.

Finally, REMEMBER --> "the IRS WON'T call or otherwise contact you asking for personal or bank account information."

07/01/2020

Hey Magicians, below is Thomas Donnely’s article entitled, “Financial Resources for Gig Performers (And Others) During the Pandemic.” It is a good read on, well, the title speaks for itself. I will try to repost Thomas’ other parts.