Martin Cantu, EA - Tax Consultant - Tax Relief Services Blog

The 2017 tax overhaul presented a new set of challenges and questions for taxpayers to deal with in preparing their returns and making financial plans.   Tara Siegel and Ron Lieber of The New York Times wrote a great article on some of the more difficult questions facing taxpayers as a result of that legislation. You can read the article here . I want to add my input to some of the points they raise in a series of blog entries, in no order. The first issue I want to address is that of Qualified Business Income (QBI). It applies to so many taxpayers and in my opinion is the most confusing section of the new tax law. Reviewing the IRS website addressing QBI, you can tell that this area provides fertile ground for future #IRSAudits and adjustments. The key provision from my viewpoint is what is not QBI: A qualified trade or business is any section 162 trade or business, with three exceptions (Specified Service Trades or Businesses or SSTB): 1.    ...

Independent Contractor v. Employee. This fight has been going on between the IRS and the business for as long as anyone can remember. Even cities are not safe from scrutiny. Safe Harbors, amnesty programs, voluntary classification program - the IRS refuses to recognize independent contractors that are used on a routine basis. Lets review a couple of things on this issue: The IRS has preference for classification of workers as employees for tax collections purposes. More and more workers are working at a number of different jobs for multiple employers, and many from home - this is the new economy. Many states are now interested in classifying workers as employees - we recently saw a case with the Texas Workforce Commission that classed workers as employees independent of an IRS involvement. Obamacare is right around the corner - employers will adapt to get under the 50 employee threshold.  Employers, better gear up for a fight on this issue. Document your files. Revi...