Robert P Russo CPA PC

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Navigating the complexities of real estate investing can be daunting, especially when tax season arrives. Proper planning with a tax accountant who specializes in real estate taxation can save you thousands. Don’t leave money on the table—ensure your investments are optimized for tax efficiency. ?? Get more insights and stay ahead with our free real estate accounting newsletter. Sign up today! ?? Link in comments. #RealEstateInvesting #TaxPlanning #RealEstateAccounting #TaxSavings #InvestSmart #RealEstateTips #AccountingExpert #FinancialPlanning #PropertyInvestment #TaxStrategy

As we bid farewell to 2023 and welcome 2024, here's to a year filled with prosperity, financial wisdom, and abundant opportunities! Happy New Year from Robert P. Russo, CPA – may your 2024 be a year of success and financial well-being. ??

Receiving a sudden and sizable influx of cash may seem like a dream come true. It can be, but many people get carried away and end up in worse financial shape. If you’re hit with a financial windfall, here are some points you should know. ”You may be tempted to almost immediately make an expensive purchase, such as a luxury car or a vacation home. And friends and family members may expect to share in your bounty, or they may pitch““sure-fire” investment opportunities. Fraudulent charities may also come knocking.“You may be tempted to almost immediately make an expensive purchase, such as a luxury car or a vacation home. And friends and family members may expect to share in your bounty, or they may pitch “sure-fire” investment opportunities. Fraudulent charities may also come knocking. You can avoid these potential pitfalls by stashing your windfall in a bank or money market account as soon as you receive it. Let it sit there until you’ve had some time to think carefully about how to best use the money and you’ve obtained advice from a qualified professional. Waiting at least a month before you touch the money can help prevent impulse buys and other mistakes. Also, you may owe taxes. Some windfalls, such as lottery winnings and certain legal settlements, are subject to federal tax — as much as 37% federal tax if your windfall pushes you into the top income tax bracket. State and local taxes may apply as well. A tax professional can help you determine what you owe.

Questions surrounding the tax treatment of cryptocurrency are complex. According to the recent IRS Revenue Ruling 2023-14, the process of verifying ownership of cryptocurrency is called “ staking.” And when a taxpayer has successfully staked his or her units of cryptocurrency, he or she may also receive “ staking rewards” consisting of additional units. When does the taxpayer have to include those staking rewards in gross income? A cash-basis taxpayer is said to “ gain dominion” over staking rewards received when he or she can sell, exchange or dispose of them. In the year that the taxpayer gains dominion over the rewards, the fair market value of the rewards must be included in gross income.

Wishing you a Merry Christmas filled with joy, love, and cherished moments! From all of us at Robert P. Russo, CPA, may your holiday season be truly special and your financial dreams come true.

Does your business have multiple owners? If so, you need a buy-sell agreement. This type of binding contract determines how (and at what price) ownership shares of a privately held business will change hands should an owner depart. There are also potential tax consequences to consider. Unlike public companies, private ones have no ready or established market on which to sell ownership shares. This can create difficult circumstances for businesses when something unexpected happens. Say an owner suddenly dies. The owner’s shares may pass on to heirs, but how much are those shares worth, and to whom can the heirs sell them? A buy-sell agreement will remove uncertainty by stipulating that the remaining owners will buy the ownership interest at a price determined by the stated valuation method. Plus, the agreement will help to prevent an unfamiliar and perhaps unwanted owner from suddenly joining the business.

In Notice 2023-62, the IRS addressed a technical error in the SECURE 2.0 Act that wouldn’t have allowed catch-up contributions to 401(k)s and similar plans after 2023. Generally, taxpayers who are age 50 or older are allowed to make additional “catch-up” contributions to employer-sponsored retirement plans such as 401(k)s. When Congress included a requirement in SECURE 2.0, signed into law at the end of 2022, that certain higher-income taxpayers make catch-up contributions only to Roth accounts, it inadvertently left out language needed to allow any catch-up contributions to employer-sponsored plans, whether pre-tax or Roth and regardless of income. The notice clarifies that catch-up contributions can be made after 2023. The notice also pushes out the requirement that taxpayers who earned more than $145,000 (indexed for inflation) in Social Security wages the previous year be made on a Roth (after-tax) basis. The new rule was to go into effect in 2024, but plan administrators requested additional time to modify systems to implement the change. The IRS has extended the effective date to 2026.

Despite the generally robust job market, some people are still losing their jobs. If you’re laid off or terminated from employment, taxes are probably the last thing on your mind. However, you may face tax implications due to your changed personal and professional circumstances. Depending on your situation, these can be complex and require you to make decisions that may affect your tax picture, both this year and in the future. Unemployment compensation is taxable for federal tax purposes, as are payments for any accumulated vacation or sick time. Although severance pay is also taxable and subject to federal income tax withholding, some elements of a severance package may be specially treated. If you’ve been laid off and are wondering how it will affect your taxes, reach out to us.

What does it mean if a business receives a Notice CP2100 or CP2100A from the IRS? These notices tell recipients that the Form 1099 information returns they’ve submitted contain missing or incorrect Taxpayer Identification Numbers, names, or both. How do I respond to Tax Notice CP2100 or CP2100A? To respond, payers need to compare accounts listed on the notice with their own records and make corrections, if necessary. They may also need to amend backup withholding for payments made to payees. Typically, the IRS sends these notices twice a year, in April and in either September or October. As always, you should promptly respond to any IRS communication. If you need help, we are here!