Peter A. Burgos CPA, PC

Quick Tip: It’s easier to take the standard deduction, but you may save a bundle if you itemize, especially if you are self-employed, own a home or live in a high-tax area.

What is a Simple Trust? This type of TRUST is required to distribute all its income currently, whether or not the TRUSTEE actually does so, and it has no provision in the trust instrument for charitable contributions. It is to be distinguished from a COMPLEX TRUST. A trust may be a simple trust in one year and a complex trust in another year. In the year in which the trust distributes its corpus, it loses its classification as a simple trust.

The Safe Harbor Rule: Concept in statutes and regulations whereby a person who meets listed requirements will be preserved from adverse legal action. Frequently, safe harbors are used where a legal requirement is somewhat ambiguous and carries a risk of punishment for an unintended violation.

Businesses have until Feb. 1, 2021, to file the revised Form 1099-MISC, Miscellaneous Income, and the new Form 1099-NEC, Nonemployee Compensation, and provide copies to the recipients.

Remember if you are considering selling your business in 2021 you will need guidance to make tax-efficient decisions, and should be aware of investment vehicles like 1031 Exchanges you’re your buildings or Opportunity Zone funds that enable them to reduce and defer tax liabilities.