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The IRS will audit hundreds of thousands of individual tax returns this year. Although that represents only a small percentage of all returns filed, it is little consolation if your return is among those selected for audit. With proper preparation and planning, you should fare well.

Given the ever-escalating cost of providing employee healthcare benefits, we want to advise you of a more cost-effective method of providing these benefits; namely, a health savings account (HSA). For eligible individuals, HSAs offer a tax-favorable way to set aside funds (or have their employer do so) to meet future medical needs

Increased tax benefits may be available to you under the rules for "spousal" individual retirement accounts (IRAs). Under these rules, the amount a married couple can contribute to an IRA for a nonworking spouse in 2018 is $5,500. The same limit applies for the working spouse.

Social Security benefits are taxed depending on your other income. In the worst-case scenario, 85% of your benefits would be taxed. This does not mean you pay 85% of your benefits back to the government in taxes, but you would include 85% of them in your income subject to your regular tax rates.

If you've ever considered deducting your spouse's travel costs during a business trip, be careful. The rules for deducting those costs are pretty restrictive.

If you rent a home to a relative who (1) uses it as his or her principal residence (that is, not just as a second or vacation home) for the year, and (2) it is rented at fair rental rate (not at a discount), then no limitations apply. You can deduct all the normal rental expenses, even if they result in a rental loss for the year. If you have a loss, however, it is a "passive" loss, which may be subject to a different set of limitations.

Rapid City, SD, May 23, 2018 – Local CPA firm, Casey Peterson, Ltd. has been awarded the 2017 Top Wealth Advisory Firm from HK Financial Services (HKFS). Casey Peterson, Ltd. earned this award by helping clients with wealth management planning. Casey Peterson, Ltd. works closely with HKFS to provide independent and objective financial services to their clients. Congratulations, Casey Peterson, Ltd.

The question of whether a worker is an independent contractor or employee for federal income and employment tax purposes is a complex one. It is intensely factual, and the stakes can be very high. If a worker is an employee, the company must withhold federal income and payroll taxes, pay the employer's share of FICA taxes on the wages plus FUTA tax, and often provide the worker with fringe benefits it makes available to other employees. There may be state tax obligations as well. These obligations do not apply for a worker who is an independent contractor. The business sends the independent contractor a Form 1099-MISC for the year showing the amount paid to the contractor (if the amount is $600 or more), and that is it. Who is an “employee?” There is no uniform definition of the term.

Employers can qualify for a tax credit known as the work opportunity tax credit that is worth as much as $2,400 for each eligible employee ($4,800, $5,600 and $9,600 for certain veterans and $9,000 for "long-term family assistance recipients"). The credit is generally limited to eligible employees who began work for the employer before Jan. 1, 2020. The credit, calculated as described below, is available on an elective basis for employers hiring individuals from one or more of nine targeted groups.