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Recent Feature Headlines
July 2010
The critical point for making payments to charities and churches deductible business expenses is your reasonable expectation of financial return.
Here are your only two tax-saving choices when you operate your business as a corporation but personally own the car you use for business.
This subscriber is going to buy a motor home and use it during the first year for travel to and from conventions. In the second year, he is going to convert that motor home to a transient rental property. His plan meets the qualifications for Section 179 expensing and avoids recapture.
The CPA in this court case operated as an S corporation with a low salary. The low salary got the IRS’s attention. To salvage bigger things, the CPA had to take the IRS to court
If you operate your business as a corporation but own the business car personally, your best result comes about when you have your corporation use an accountable plan to reimburse you for actual expenses, including depreciation and Section 179 expensing.
When the IRS invites you for a tax audit, the examiner does not know that you hired your children. This fact surfaces during the initial interview or survey process, and the IRS instructs its examiners to examine this hire closely. You avoid all the problems when you have the right records.
When your S corporation employs a relative, you need to be aware of the stock attribution rules that can wreak havoc on the health insurance fringe benefit.
When you fail to seek reimbursement for an expense, you often have no write-off. However, there are exceptions to this general rule, as examined in this tax audit tip
Tax law allows an individual to be a real estate dealer with respect to his dealer properties and a real estate investor with respect to his investor properties.
Your lodging property may qualify for one or more of four exceptions that allow Section 179 expensing. The four exceptions override the basic rule that you may not claim Section 179 expensing on property used primarily for lodging or in connection with the furnishing of lodging
If you are married, you need to consider your spouse’s W-2 and other income sources in your Section 179 expensing eligibility. The inclusion of your spouse often enhances the amount you can deduct using Section 179 expensing.
June 2010
The IRS tax form for deducting the home office contains the gross-square-footage method and makes no mention of other permissible methods. This article shows you how the net-square-footage method works and why it is always superior to the gross method found on the IRS form.
Tax savings when renting to relatives depend on your compliance with the tax law’s fair-rent standards and your relatives’ use of the property. Violate these rules and you face the triple whammy of additional taxation.
The trade-in of your old business car on a replacement car creates additional basis. The subsequent trade-in can also increase basis. This process can create a big tax deduction if you know what to do.
One question that is often answered incorrectly, thus reducing tax benefits is the question: What is considered business income for the Section 179 expensing limit? Actually, the real problem is the assumption (and you know what they say about assuming) that I know what business income is. That assumption often limits Section 179 expensing to far less than what is allowed.
Renting equipment to your corporation requires knowledge of the tax laws. Three special rules apply to the individual taxpayer who rents equipment to others.
Doing business in two different locations requires tax knowledge. The purchase of a town house in the second location brings up many tax planning opportunities and a few hazards to avoid.
What happens when you locate an office (home office or other office) in a duplex or apartment building? It’s possible that this location can produce tax-favored depreciation for the home office.
To deduct business clothing, you must pass the condition-of-employment and not suitable standards.
May 2010
Prepaying expenses has been a most overlooked tax planning strategy because it is misunderstood. Proper use of the new safe-harbor prepayment rules can guarantee the prepayment deduction. Continued use of prepayments combined with strong investment returns can produce a nice addition to your net worth.
The tax strategy of renting property you own personally to your businesses needs your attention if you want tax benefits. Similarly, special recharacterization rules apply to rentals of land and also when land is a big part of the rental.
The U.S. tax system is kind to proprietors and corporations that lose money in their businesses. The losses can be carried back and forward, but you must pay strict attention to the elections and due dates to ensure your benefits.
The first good news is that you can be both real estate investor and real estate dealer with respect to your real estate portfolio. The next good news is that you are in control, and by knowing just a few rules about dealer and investor classification, you can do much to increase your net worth.
Poor planning for the S corporation owner’s business expenses can cost the owner every penny of his deductions.
It’s true, you don’t need a receipt for an entertainment expense that costs less than $75. But you may need to prove that you had the cash available for the entertainment.
You always come out ahead when you can deduct your charity involvement as a business expense.
April 2010
Tax credits are a true incentive for the business owner. They reduce taxes dollar for dollar. Now, you have waiting for you a hefty 35 percent tax credit on small-business health insurance coverage for employees. Here are the rules you need to know.
Luxury limits on passenger automobiles and light trucks and vans produce planning benefits at the back end. If you want to beat the luxury limits, you have to buy a vehicle that’s exempt from the luxury limits.
The new health care law grants a nice tax credit to business owners who cover their employees. How about the owners themselves? Lawmakers did them no favors, but one group of proprietors might catch a break.
For business owners who have children ages 22, 23, 24, 25, and 26, the new health care bill contains a healthy break, and perhaps even better than that. Amend Section 105 plans now for this new provision. Download your sample plan from this article.
Most of this issue explains how you pocket money from the new health care tax credits. That’s nice. But you have to ask, who is paying for my tax credits?
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