Enhance your tax expertise: fixed assets and depreciationBy: National Association of Tax Professionals
December 6, 2023

Properly categorizing assets as deductible or capitalizable can lead to significant tax savings and minimize errors in tax returns. This also allows you to provide valuable advice on asset management, timing of acquisitions and overall tax efficiency.

This knowledge is vital when supporting clients during audits and ensuring compliance with ever-evolving tax laws.

Below, you’ll find a few of the top questions from a recent webinar on the topic and their accompanying answers. If you choose to attend the on-demand version of this webinar, you’ll have access to the full recording and the entire list of Q&As.   

Q: Is the class life of semi tractors three years?

A: Yes. The semi tractor has a class life of three years.

Q: If the property greatly appreciated before it was placed in service, would you use the fair market value as basis, or the actual cost?

A: Actual cost is the basis for depreciation in this case.

Q: If a building was already depreciated 15 years and a new roof is installed in year 16, is the roof depreciated for what is left on the original asset or what the original asset was depreciated for?

A: When completed, the new roof would be placed in service as a separate asset with a new depreciable life.

Q: The MACRS deduction doesn’t give you the full $10,000 depreciation, but the straight-line (SL) does. Why would you use the MACRS deduction versus the SL deduction?

A: It does give you the full $10,000 deduction. That’s why five-year property actually has six years of depreciation deductions. Depreciation continues until all the basis is used up.

To learn more about navigating fixed assets and depreciation, you can watch our on-demand webinar. NATP members can attend for free, depending on membership level! If you’re not an NATP member and want to learn more, join our completely free 30-day trial at natptax.com/explore. 

Depreciation
Tax education
Fixed assets
Tax planning
Tax preparation
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Learn how to prepare taxes for a deceased taxpayerBy: National Association of Tax Professionals
December 4, 2023

Death can be an unpleasant subject, but every tax pro needs to be ready for the day when someone who has lost a family member walks into your office looking for help with the deceased’s taxes. You need to know what information you need, where to find it and how to report it to the IRS.

Below, you’ll find a few of the top questions from a recent webinar on the topic and their accompanying answers. If you choose to attend the on-demand version of this webinar, you’ll have access to the full recording and the entire list of Q&As.   

Q: Since a fiduciary steps into the shoes of the deceased taxpayer, does it need a Form 2848, Power of Attorney and Declaration of Representative, to get tax information?

A: If they are already a fiduciary, Form 2848 shouldn’t be necessary. Instead, they’ll want to file Form 56, Notice Concerning Fiduciary Relationship.

Q: When Form 56 is filed, what documentation needs to be filed with it?

A: You don’t need to include documentation unless you checked the boxes on Lines 1a and 1b as the executor, administrator or representative of an estate who has been appointed by a court. Otherwise, it only needs to be available should the IRS ask.

Q: Can the same Form 56 be used for a decedent’s final Form 1040 and decedent’s estate Form 1041, U.S. Income Tax Return for Estates and Trusts?

A: A second Form 56 would be needed in the name of the estate.

Q: Do we normally have to file the decedent’s Form 1040 by mail?

A: The final return can be e-filed.

To learn more about preparing taxes for a deceased taxpayer, you can watch our on-demand webinar. NATP members can attend for free, depending on membership level! If you’re not an NATP member and want to learn more, join our completely free 30-day trial at natptax.com/explore. 

Tax education
Form 2848
Power of attorney
Form 1041
Estate planning
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Why it’s important you know about the R&D creditBy: National Association of Tax Professionals
November 29, 2023

By identifying eligible research and development (R&D) activities and expenses, you can optimize tax returns and secure significant tax savings for your clients. Accurate knowledge of the credit regulations will ensure your clients fully benefit from available tax incentives while fostering innovation and competitiveness in their industries.

Below, you’ll find a few of the top questions from a recent webinar on the topic and their accompanying answers. If you choose to attend the on-demand version of this webinar, you’ll have access to the full recording and the entire list of Q&As.   

Q: When a sole proprietorship becomes a C corporation, do we look at the sole proprietorship’s prior two years when determining whether a C corporation is in its first year?

A: You would include the two years it was a sole proprietorship before it became a C corp.

Q: Can a company receive both the employee retention credit (ERC) and the R&D credit based on the same wages paid, or do they need to pick one?

A: An employer can’t claim both credits using the same wages.

Q: How many years do we amortize the research costs in 2022?

A: Companies must spread their deductions for R&D expenses over five years for domestic R&D. It’s 15 years for foreign R&D.

Q: For the payroll tax credit option, what if your gross receipts are zero?

A: You can still apply the credit against the employer’s portion of the Social Security and Medicare tax payment (up to a total of $250,000).

To learn more about helping clients claim the research and development (R&D) credit, you can watch our on-demand webinar. NATP members can attend for free, depending on membership level! If you’re not an NATP member and want to learn more, join our completely free 30-day trial at natptax.com/explore. 

R&D credits
Tax education
Business tax
Tax planning
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About NATP

Whether you’re a tax professional just starting out in your career or an experienced expert, NATP believes in you and the work you do to help your clients. We take pride in providing you with resources you won’t find anywhere else, and helping you succeed in the ever-growing and changing industry.

As tax laws change, you can rely on NATP for professional advocacy within the government, guidance on how to apply updated federal tax code to your clients’ unique situations and relationships with communities of other tax professionals to help foster your career. Explore NATP.

If you’re a taxpayer looking for an expert to help you with your tax planning and preparation, look to the industry’s top preparers. Choose an NATP member.

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