Milikowsky Tax Law Blog

Blog Authors

Latest from Milikowsky Tax Law Blog

Let us tell you a story. Some 15 years ago, we encountered a case in which a man’s wife passed away.  In the subsequent months, he received credit card bill after credit card bill of which he had no prior knowledge. The bills added up to nearly a million dollars of credit card debt.  Unbeknownst to this man, his wife had been opening credit cards, maxing them out, and opening other cards.  He went to his CPA who helped him get the debt charged off at 10% owed by explaining what had happened.  After months of diligent work and hours…
The Employment Development Department (EDD) is the largest tax collection agency in the state of California. They’re responsible for collecting payroll taxes from over 17 million workers annually, accounting for over $31 billion in tax payments. The agency also offers various services to California residents through the Job Service, State Disability Insurance (SDI), Workforce Management, and Labor Market Information programs.  Because of the high responsibility it holds, EDD cracks down on businesses that fail to file the correct forms or make appropriate payroll tax withholdings. Dealing with EDD leaves small business owners and employers little room for mistakes. While EDD…
**UPDATE: 2021** Additional CA Business Tax Rules going into effect affecting states outside CA Tax season is upon us and the newest revisions to the California tax codes affect not only residents of the state but those who do business with CA (the 5th largest economy in the world). For the millions of Californians who went to the polls in November these ballot measures and Bills may be familiar. Here are three that passed into law and two that did not.  We review what they are and what they mean for your business and personal taxes in 2021. In June…
Earlier this year the Coronavirus Aid, Relief, and Economic Security (CARES) Act offered businesses the opportunity to apply for loans under the Paycheck Protection Program (PPP). Businesses were eligible to receive up to as much as 2.5 times their average monthly payroll costs, up to a maximum of $10 million. Following the distribution of $349 billion in PPP loans, it was discovered that many businesses improperly applied for the loans. As a result, the Small Business Administration (SBA) has begun the process of auditing all loans over $1 million. For those small businesses whose loans were under $150,000, a…
Receiving a letter from IRS is often something that most don’t consider until forced to do so. Until taxpayers receive an IRS letter, there is often no reason to concern themselves on the subject. That being said, experiencing such a receipt is likely to cause a state of concern. In the event that you receive a letter from IRS, there is no reason to be concerned. There are various types of IRS Notices, some of which may not necessarily be negative. That being said, the most efficient first step to protect yourself is to reach out to a tax…
Since its initial launch in April 2020, the Paycheck Protection Program has challenged recipients more than originally expected. What was once thought to be a no strings attached loan has now become a source of stress and worry for many of its recipients. Shortly after issuing loans to applicants, SBA announced that it would be conducting in-depth audits on any businesses that claimed $2 million or more. This also does not include the randomized audits for recipients at all loan amounts as a “spot check.”  In October 2020 the U.S. Small Business Administration (SBA) released new information that they would…
In some cases, it may be difficult to distinguish what your CPA is capable of helping you with and which tasks are better suited for a tax attorney. Both are experts when it comes to tax matters but in different ways. While your CPA is an expert at preparing and submitting your taxes correctly, you’ll need a tax attorney in the event that IRS notices inconsistencies in your tax submissions or if you’re the subject of an audit. In any case, you’re best off having access to both experts.  What does a CPA do?  A Certified Public Accountant (CPA) has…
In April 2020 the Paycheck Protection Program (PPP) was announced as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. It granted loans to businesses across the country to support more than 51 million jobs and over 80 percent of all small business employees. While the average loan size was $100,000, some businesses received up to $10 million. Since its initial announcement, however, the U.S. Small Business Administration (SBA) has begun performing audits on the loans they granted following the discovery that many loans were granted under false pretenses.  Currently, all loan recipients are at risk of being…
Starting to think about your resolutions for the new year? Well, we’ve got the perfect suggestion for you: make a commitment to make 2021 the year that you stay organized for your CPA. Whether on a personal level or for your business, staying on top of your finances with your CPA can make a huge difference in the event of an audit.  Maintaining a good organizational system with your CPA can make or break the outcome of an audit. Working closely with a CPA has the power to decrease the chances of being audited in the first place by ensuring…
Were you laid off during the COVID-19 pandemic? Have you been receiving unemployment benefits? Are you questioning what’s going to happen when it comes time to file your taxes? Wondering whether or not the unemployment benefit income you’ve received is taxable? The short answer is yes, it is.  Millions of Americans have been receiving unemployment benefits after being laid off throughout the current pandemic. Many of those that have qualified for unemployment benefits are receiving them for the first time and as such have been left with questions, including regarding the tax specifics of their benefits.  Earlier this year, IRS