Business Accountant Austin TX

Tax Credits for Electric Vehicles in 2024

If you’re considering adding a qualified electric commercial vehicle to your business fleet, timing is everything. Waiting until after December 31, 2022, could help you capitalize on the updated Commercial Electric Vehicle Tax Credit.

As electric vehicles (EVs) become more common in the business world, we receive plenty of questions about how the Commercial Electric Vehicle Federal Tax Credit works. Here are some of the most frequent queries you might be pondering.

Common Questions CPAs Receive About the Commercial Electric Vehicle Tax Credit

❓What is the difference between a Commercial and Non-Commercial Electric Vehicle?

Commercial vehicles differ significantly from non-commercial electric vehicles under Section 30D. Understanding these differences is crucial for claiming the correct tax credit.

❓How much is the Commercial Electric Vehicle tax credit?

The credit is the lesser of:

📌 30% of the cost of a vehicle that isn’t powered by a traditional gasoline or diesel engine, or;
📌 The incremental cost of the vehicle (i.e., the difference in price between your new EV and a comparable conventional vehicle).

Note: Per Internal Revenue Code Section 45W, the credit caps at $7,500 for vehicles under 14,000 pounds and $40,000 for heavier vehicles.

❓What qualifies as a Commercial Clean Vehicle?

A “qualified commercial clean vehicle” must:

✅ Meets the requirements of Section 30D(d)(1)(C) and is acquired for use or lease by the taxpayer and not for resale;
✅ Is of a character subject to the allowance for depreciation;
✅ Either meets the requirements of subparagraph (D) of Section 30D(d)(1) and is manufactured primarily for use on public streets, roads, and highways (not including a vehicle operated exclusively on a rail or rails), or is mobile machinery, as defined in Section 4053(8) (including vehicles that are not designed to perform a function of transporting a load over the public highways), or;
✅ Either is propelled to a significant extent by an electric motor which draws electricity from a battery which has a capacity of not less than 15 kilowatt hours (or, in the case of a vehicle which has a gross vehicle weight rating of less than 14,000 pounds, 7 kilowatt hours) and is capable of being recharged from an external source of electricity, or is a motor vehicle which satisfies the requirements under subparagraphs (A) and (B) of Section 30B(b)(3).

❓How do I claim the credit?

You must include the vehicle identification number (VIN) on the tax return for the taxable year in which you purchase the vehicle. You can find eligible VIN numbers on the National Highway Traffic Safety Administration’s free VIN Decoder.

If a commercial EV is on your company’s list, do the due diligence ahead of time to avoid disappointment come tax time.

💡 Important Rules to Note

Section 30D Guidelines
Commercial Electric Vehicles must comply with Section 30D guidelines, with a few exceptions for income and retail price limitations.

Tax-Exempt Entities
Vehicles placed in service by tax-exempt entities shall not apply to any vehicle which is not subject to a lease and which is placed in service by that entity.

No Double Dipping
You can’t claim a double benefit—no credit under this section for vehicles already credited under Section 30D.

Need help?

Curious about how much your business could save with the Commercial Electric Vehicle Tax Credit? Let’s chat! The corporate tax specialists at Insogna CPA are ready to guide you through every charge and credit, ensuring you maximize your savings in 2024.

Reach out today—we’re just as excited about driving your business forward as you are.

Moving to Austin, Texas? The Tax Tips You Need to Know

If you’re eyeing Austin, Texas, as your next home—whether for retirement, a job relocation, or just a change in scenery—here’s the lowdown on what to expect tax-wise in 2024.

According to the U.S. Census Bureau, “Austin outpaced every other metro area in the nation from 2010 through 2019, and in 2020 (the latest figures), was the fastest-growing metropolitan area.” On average, the city gains 168 new residents daily, largely due to relocations. That trend shows no signs of slowing down.

❓ What are Taxes Like?

Even though you won’t pay personal state income tax (a huge bonus for people moving from states with high tax rates such as California and New York). The current total sales tax in Austin is 8.25 percent. While the county doesn’t currently impose a sales tax, the state charges a state sales tax of 6.25 percent. Austin adds to that a city sales tax of 2 percent. One percent of the city’s sales tax goes towards the improvement of its public transportation system.

While Texas doesn’t have a state income tax, it makes up for it in property taxes. According to Tax-Rates.org, the median property tax in Austin is $1,903 per year for a home that is worth approximately $150,000. Currently, the average median listing home price in the city is $579,000. Based on those figures, if you move to Austin, expect to pay at least $6,000 annually in property taxes for a home slightly below the median home price.

For people moving from historically expensive cities such as Los Angeles, San Francisco, or New York (where many of Austin’s recent transplants have come from), it still works out to a lower cost of living. But for folks moving from smaller Texas towns or mid-sized cities, it’ll feel like more of a squeeze.

❓ Why Are Businesses Moving to Austin?

Austin-based economist Jon Hockenyos told national attendees of a 2021 forecasting event that Austin will be “one of the great global cities of the 21st century.”

It’s worth noting that along with a lower comparable cost of living, businesses that move or expand to Austin will also get exceptional business incentives and be privy to some of the lowest tax rates in the country.

The state of Texas has neither corporate or personal income tax — a boon for businesses and their employees. Business incentives range from sales tax and franchise tax exemptions for qualified businesses. Additionally, the state offers waived permit fees, property tax abatements, grants, and local funding for relocating or expanding businesses.

Additionally, the city of Austin has a Business Expansion Incentive Program that rewards qualifying businesses that perform in certain target areas with tax reimbursements and wage reimbursements.

Real estate opportunities are still readily available, especially for expanding businesses or manufacturing companies that require larger warehouse spaces. With a median salary of $93,000, the economy is strong, and businesses will have access to a talent pool full of smart professionals.

💡Additional Business Relocation Costs to Consider

Before you pack up, make sure you’ve accounted for all the potential costs:

✅ Deposits and/or lease fees for new office space
✅ Business registration fees or any fees tied to dissolving, reforming, merging, relocating, or converting your business
✅ Potential loss of productivity and revenue during the move
Employee relocation costs
✅ Marketing costs to inform clients about your new location
✅ Insurance costs for the move and for relocating employees
✅ One-time setup costs for the new office and employees: utilities, IT, furniture, cleaning, etc.

For a full list of Austin’s economic incentives, visit the Austin Chamber of Commerce website.

❓What is Austin’s Cost of Living?

Austin’s cost of living is higher than the national average, with a living index of 109—9 percent above the norm. Housing is a significant factor, but you’ll also pay more for healthcare, goods, and services in Austin.

❓What is Austin’s Real Estate Market Like?

The median listing home price in Austin is $579,000, with an average of $320 per square foot—much higher than the national median of $374,900. Depending on the neighborhood, you might pay even more. Areas like Circle C, Bee Cave, Westlake, and East Austin are known for their steep prices.

Homeownership is at 44 percent in Austin, meaning more than half of the city’s residents rent. A significant portion of renters (35 percent) pay between $1,501 and $2,000 monthly, while 20 percent pay more than $2,000.

❓Does Austin, Texas, Pay You to Move There?

While you won’t get paid to move to Austin, the city is part of a guaranteed income program that redistributes local taxes to lower-income families.

Ready to Move? We’ve Got Your Back.

We help business owners navigate the complex world of taxes, ensuring you stay compliant while minimizing your tax liabilities. Planning a move to Austin? Let us help you calculate your tax bite and make sure you’re maximizing your deductions when tax season rolls around. Reach out today, and let’s turn your big move into a smart move.

2024 Travel Nurse Tax Tips

Hey there, fellow Travel RN!

Taxes—no one loves ’em, but everyone has to deal with ’em. But don’t worry, we’re here to guide you through the maze of tax deductions and savings your tax accountant should be working on for you.

At Insogna CPA, we get the unique challenges travel nurses like you face. You’re not just a nurse; you’re running a business as a 1099 contractor, and that requires more than just number crunching. Our Austin, TX-based tax preparation team is here to help you maximize your tax savings while keeping things straightforward.

💡 Tax Prep

Let’s dive into the world of tax preparation specifically tailored for travel nurses. Picture this: you’re hopping from one assignment to another, providing top-notch care to patients. Along the way, you’re racking up expenses like lodging, meals, and transportation. The good news? Many of these expenses can be deducted from your taxes, meaning more money back in your pocket.

But there’s more! As a travel nurse, you’re constantly investing in your professional development. Whether it’s renewing licenses, attending conferences, or taking courses to boost your skills, these costs can also be deducted. That’s right—your commitment to lifelong learning not only benefits your career but your wallet, too.

And let’s not forget those snazzy uniforms—scrubs, lab coats, and any specialized attire required for your assignments. The costs to keep up your professional appearance? Yep, they can be claimed as deductions.

❓Business Tax?

Now, I know what you’re thinking—business taxes can be overwhelming. But don’t stress! That’s where our tax accountant team comes in. We specialize in tax services for travel nurses, helping you navigate the complex tax laws and ensuring you’re taking advantage of every deduction available. We handle the paperwork so you can focus on what you do best—providing exceptional care.

Choosing Insogna CPA means choosing peace of mind. We’re not just your tax accountant; we’re your financial success partners. With our tax preparation expertise, you can rest easy knowing your business taxes are in good hands.

Now that you’re a successful travel nurse making bank as a 1099 contractor, let’s make tax preparation rewarding by keeping more of your hard-earned money where it belongs—in your pocket.

Ready to keep more of your hard-earned cash?

Let’s chat about how our tax preparation services can make 2024 and 2025 your most financially rewarding year yet. Reach out to us today!

5 Common Mistakes Your Bookkeeper Can Make (and How to Fix Them)

As your small business probably knows, anyone can perform basic bookkeeping tasks. Categorizing synced transactions from the bank isn’t rocket science. But it’s not just about finding someone who can handle these responsibilities—it’s about finding an experienced bookkeeper who gets it right, on time, and works cohesively with your CPA. If your bookkeeper made these accounting mistakes last year, it might be time to rethink your business’s accounting strategy.

🚩 Didn’t Collaborate with Your CPA

Having a bookkeeper and a separate tax person can prove to be an issue, as they are not incentivized to communicate with one another. Consider hiring a licensed Certified Public Accounting Firm that specializes in helping small businesses bridge the gap between transactional work and providing ongoing tax strategy planning.

You will miss opportunities to legally save money on your taxes if your financial efforts are not ongoing and cohesive. If your bookkeeper doesn’t do their job correctly on a daily basis, your CPA will have to clean up messes later on in order to correctly prepare your business’s taxes. Bringing in an integrated CPA team will ensure a seamless financial experience throughout the year as the same group of licensed CPAs sees your business through from the beginning of the fiscal year through to the end.

🚩 Missed Opportunities to Legally Save on Taxes

Your business could take a significant hit thanks to a financial disconnect between your CPA and bookkeeper. Is your bookkeeper only equipped to take care of your straightforward and transactional daily financial tasks? Don’t skimp in this area; what you might save by hiring an inexperienced bookkeeper that makes accounting mistakes you will likely spend when paying taxes and then some.

Enlisting the expertise of an integrated CPA team guarantees that you are getting high-quality service from a group of CPAs that work together to benefit your organization.

🚩 Didn’t Provide Year-Round Advisory and Planning

To truly thrive, your company needs year-round, customized financial expertise from an industry professional that has been trained to help business owners like you. Trusting an unqualified bookkeeper that works in total separation from your CPA will not do the trick.

A strategy that was established at the beginning of the year might need to be altered if your bookkeeper reports that day-to-day conditions have changed since the strategy was put into place. A communicative, collaborative relationship between these two is crucial for your organization’s success.

🚩 Risked an Audit with Mis-Reporting

You will be a likely auditing target if your bookkeeper continually makes mistakes—even small ones. Rounding to the nearest whole number, simple math errors, incorrectly categorizing expenses, neglecting to track reimbursable expenses, and more can catch the attention of the IRS and put your business in a vulnerable position.

If errors of this nature don’t trigger an audit for your company, your CPA will either have to allocate extra time and effort to rectify these mistakes later on or your business will simply miss out on opportunities to save money.

🚩 Didn’t Get to Know Your Business

Your bookkeeper should have an in-depth familiarity with your business, its problem areas, its long-term goals, etc. in order to help you save money. Ask yourself the following questions:

❓ Can my bookkeeper help identify problem areas?
❓ Opportunities to increase profits?
❓ Do they understand my goals to grow my business?
❓ Do they help me figure out ways to cut costs?

If the answer is no, and your bookkeeper makes accounting mistakes, consider how upgrading to an integrated CPA team might improve the financial aspects of your business.

💡 What Can Be Done?

As mentioned earlier, there are straightforward solutions to these costly mistakes. At Insogna CPA, we specialize in bridging the gap between transactional bookkeeping and ongoing tax strategy planning, so your business doesn’t suffer from poor financial management:

✅ Small business bookkeeping that helps your company save as much as legally possible on taxes.
✅ Identifying problem areas, maximizing profits, and advising on how to cut costs—looking beyond just the numbers to see the full picture.
✅ Preventing unnecessary audits by maintaining accurate records and avoiding common reporting mistakes.

Is your small business’s bookkeeping more of a headache than a help?

Let’s chat about how we can help you take control of your financial future. Reach out today—we’re here to make sure your books aren’t just balanced, but that your business is too.

Can You Pay Taxes with a Credit Card?

With tax season behind us, the next big worry is paying off those remaining tax bills. If you’re considering your options, paying your taxes with a credit card might have crossed your mind. It’s an alternative to IRS payment plans and could even offer some tempting rewards if your card has the right perks.

But before you swipe, it’s important to weigh the pros and cons. Depending on your tax bill and your credit card’s terms, this decision could either save you some stress or cost you more in the long run.

💵 Processing Fees

Since the IRS can’t accept credit card payments directly, they work with three approved payment processors. Currently, the processor with the lowest fee is pay1040.com, charging 1.87% of your balance, with a minimum fee of $2.59. So, if you owe $2,000 in taxes, you’ll be charged a total of $2,037.40.

Remember, these fees get steeper the larger your outstanding balance, and you’ll need to pay them on top of any interest. If you go with an IRS payment plan and pay by direct debit or check, you’ll only owe the IRS interest rate and any applicable penalties, with no processing fees.

📌 Interest Rates and Balance Transfers

Interest rates vary by credit card, but the average is about 15.07%. According to the IRS, the rate for overpayments and underpayments is currently 6% per year, compounded daily.

If you plan to pay your balance off over time, you’ll likely pay more interest with a credit card, even if it’s simpler to calculate than the IRS interest rates, which change frequently. However, if you open a new credit card with a balance transfer offer and have good credit, you could get several months to a year to pay off your balance at a 0% interest rate, which can save you money and buy you some time. But if you miss payments or your credit isn’t great, this might not be an option for you.

💡 Credit Card Rewards

Credit card rewards, like cash rebates and frequent flyer miles, often make the extra fees and interest tempting when paying your taxes by credit card. Why not earn a free vacation while paying your taxes?

However, financial experts estimate that most credit card rewards only net you about 1% back on what you purchase. It’s worth sitting down and doing the math on how much you could save by sticking with the IRS interest rates and avoiding processing fees—you might be able to fund that vacation out of pocket instead. Unless you plan to pay off your entire balance immediately and the rewards are worth the fees, using a credit card for your taxes might not be the best financial move.

📃Tax Bills and Your Credit Report

If you need extra time to pay your taxes, an IRS installment or short-term payment agreement is usually a better option, as these don’t appear on your credit report. However, carrying a balance will appear once you shift the responsibility from the IRS to your credit card company.

In addition to affecting your available credit, it also impacts your credit utilization score based on how much of your available credit is being used.

If you’re looking for housing, more credit, or other situations that involve a credit check, you’ll want to avoid paying your taxes with a credit card.

✅ Weigh the Risks and Benefits of Paying Your Taxes by Credit Card

Ultimately, the decision to use a credit card to pay your taxes is a personal one. If you’re planning to take a longer-term approach, an IRS installment agreement is likely to cost you less both upfront and in the long run.

Need Help?

Not sure which payment option suits your situation best? Let’s connect and figure out the smartest way to handle your tax bill—without sacrificing your financial goals.

Social Security Is Taxable? How to Minimize Taxes in 2024

How much (if any) of your Social Security benefits are taxable depends on several key factors. The following information will help you understand the taxability of your Social Security benefits.

Taxable Social Security Benefits

For this discussion, the term “Social Security benefits” refers to the gross amount of benefits you receive (i.e., the amount before any reductions due to payments withheld for Medicare premiums). For tax purposes, Social Security benefits are treated the same regardless of whether the benefits are paid due to disability, retirement, or reaching the eligibility age. Supplemental Security Income benefits are not included in these computations because they are not taxable under any circumstance.

The taxability of your Social Security benefits depends on your total income and marital status:

📌 If Social Security is your only source of income, it is generally not taxable.
📌 On the other hand, if you have other significant income, up to 85% of your Social Security benefits may be taxable.
📌 If you are married and filing separately, and you lived with your spouse at any time during the year, 85% of your Social Security benefits are taxable—regardless of your income. This rule prevents married taxpayers who live together from filing separately to reduce the income on each return and thus reduce the amount of Social Security income that is subject to tax.

💡 The Formula

The following quick computation can determine if some of your benefits are taxable: Add half of your total Social Security benefits to your total other income, including any tax-exempt interest and certain other exclusions from income. Then, compare this total to the base amount used for your filing status. If the total exceeds the base amount, some of your benefits may be taxable.

💵 Income Exclusions

These exclusions include interest from qualified U.S. savings bonds (used for education expenses), employer-provided adoption benefits, foreign-earned income or foreign housing income, and income earned by bona fide residents of American Samoa or Puerto Rico.

When taxpayers can defer their non-Social Security income from one year to another, such as by delaying individual retirement account (IRA) distributions, they may be able to plan their income to eliminate or minimize the tax on their Social Security benefits in a given year. However, the required minimum distribution (RMD) rules for IRAs and other retirement plans must be taken into account.

Individuals with substantial IRAs who either aren’t required to make withdrawals or are making post-age 70.5 RMDs but are not withdrawing enough to reach the Social Security tax threshold may be missing an opportunity for tax-free withdrawals. Everyone’s circumstances are different, and what works for one person may not work for another.

Need Help?

Want to ensure you’re not overpaying on your Social Security benefits in 2024? Reach out today for a personalized tax strategy session tailored to your unique situation. Let’s make sure you’re getting the most out of your hard-earned benefits.