By topic: Spouse

Raise Hell: Save Your Employee Retention Credit

IRS Notice 2021-49 disallowing the employee retention credit to more than 50 percent owners who have certain living relatives has to be a mistake. It’s too illogical to stand. In fact, you have to question whether the notice is technically correct.

Know Why the Court Denied Losses on Four of Six House Rentals

When the government allows your rental property losses to offset your other income, it subsidizes your rental property profits. If tax law passive-loss rules deny your current rental losses, your profits go down. Therefore, you need to know how the passive-loss rules work so you can maximize your rental profits and avoid unpleasant visits with the IRS.

Tax Savings for Married Taxpayers Claiming Section 179 Deductions

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, as we explain in this article.

How the IRS Lost $55,000 in This IRS Rental Properties Audit

The thought of an IRS audit is a worry—no question about it. But it’s worse when the IRS wants a lot of your money. And it’s even worse yet when the IRS wants your money because it interprets the law incorrectly and, at the time you see the IRS adjustment, you have no idea whether the IRS is right or wrong.

Wow! Married, Filing Separately, May Be the Tax Year 2020 Strategy

In most circumstances, you save federal tax when you’re married by filing a joint return versus two separate returns. But for tax year 2020, due to how Congress wrote some of the temporary COVID-19 tax benefit provisions, you may end up pocketing more money by filing separate returns. We’ll show you why this is the case and how to determine which filing status you should use.

Tax Bonanza: Expanded Individual Tax Credits in New Law

The American Rescue Plan Act of 2021 provided billions of dollars in new expanded tax credits for individuals like you for tax years 2021 and/or 2022. The three main tax credits Congress increased are the child tax credit, the dependent care credit, and the premium tax credit for health insurance. Learn how you can get thousands more in your pocket for tax year 2021 due to these changes.

Handling Key Non-Tax Financial Issues When a Loved One Passes Away, Part 3

In this part 3 of this three-part series, learn how to handle key non-tax issues when a loved one passes away. There is much to know and to consider, from a simple matter such as how many “original” death certificates you should obtain to how you deal with the revocable trust that’s now irrevocable because of the death.

FREE PDF Download: Slash Business Taxes with the Help of Relatives

Do you own your own business? Do you have close relatives? If you responded yes to both, you have a golden opportunity to slash your business taxes. With the help of family members, you can utilize several tax-saving strategies to reap some nice financial benefits for both you and your relatives.

Tax Considerations When a Loved One Passes Away (Part 2)

If you become an executor of your loved one’s estate, you may have some important tax decisions to make, as we describe in this article. For example, on the decedent’s final Form 1040, should you elect to deduct medical expenses that are unpaid at the date of death? Should you file Form 706 when not required by law to do so?

Five Things to Know About Employing Your Spouse

If you own your own business, hiring your spouse to work as your employee can be a great tax savings strategy. But the tax savings may be a mirage if you don’t pay your spouse the right way. And the arrangement is subject to attack by the IRS. Here are five things to know before you hire your spouse that will maximize your savings and minimize the audit risk.

Tax Considerations When a Loved One Passes Away (Part 1)

If a loved one passes away and you serve as the executor or inherit assets, you need to consider your duties and/or tax planning. This is Part 1 in a three-part series where we consider your duties should you be the executor, along with planning to avoid the exorbitant tax rates that could apply to a living trust, special filing rules for the widow or widower, required minimum distributions, and more.

2020 Last-Minute Year-End Tax Strategies for Marriage, Kids, and Family

If you are thinking of getting married or divorced, you need to consider December 31, 2020, in your tax planning. Here’s another planning question: Do you give money to family or friends (other than your children who are subject to the kiddie tax)? If so, you need to consider the zero-taxes planning strategy. And now, consider your children who are under age 18. Have you paid them for work they’ve done for your business? Have you paid them the right way? You’ll find the answers here.

2020 Last-Minute Year-End Tax Deductions for Existing Vehicles

Yes, December 31 is just around the corner. That’s your last day to find tax deductions available from your existing business and personal (yes, personal) vehicles that you can use to cut your 2020 taxes. In this article, you will learn how to find and release tax deductions that the tax code trapped inside your existing business cars, SUVs, trucks, and vans. And you will learn how the Tax Cuts and Jobs Act makes it possible for you to find a big deduction from your existing personal vehicle.

New Law Kneecaps Stretch IRA—Here’s What You Can Do About It

The Setting Every Community Up for Retirement Enhancement Act (SECURE Act) passed last December makes a big change in the stretch IRA—an estate planning device favored by well-off IRA holders. To cope with the downside of this new law, you need to do some planning, as we explain.

Husband-Wife Partnerships: Three Tax-Saving Strategies—Part 2

When you operate a husband-wife partnership, you likely are paying far more than you need to pay in self-employment taxes. This article gives you three strategies you can use to save some serious money on the payment of self-employment taxes.

Husband-Wife Partnerships: The Tax Angles—Part 1

If you and your spouse work together in a business that you do not operate as a corporation, you can run into the partnership rules—and they are not usually friendly to a spouse partnership. In Part 1 of this article, you will see how the partnership rules work. You will also see how spouses can elect joint venture tax return treatment.

Divorce: Beat Alimony, Redeem Spouse’s Stock in Your Closely Held Corp.

The Tax Cuts and Jobs Act altered the rules of the road in divorce planning. The significant change is that alimony is no longer tax-deductible; therefore, you want to avoid paying alimony. You may be able to sidestep alimony by transferring assets to your ex—and also have your ex carry the tax burden associated with those assets.

Know These Divorce-Related Tax Issues for Small-Business Owners

As with all financial transactions, divorce comes with tax consequences. And those consequences have changed for tax years 2018 and later thanks to the Tax Cuts and Jobs Act (TCJA). If you are thinking of divorce or are currently in the process, make sure to read this article.

2019 Last-Minute Year-End Tax Deductions for Existing Vehicles

Yes, December 31 is just around the corner. That’s your last day to find tax deductions available from your existing business and personal (yes, personal) vehicles that you can use to cut your 2019 taxes. In this article, you will learn how to find and release tax deductions that the tax code trapped inside your existing business cars, SUVs, trucks, and vans. And you will learn how the Tax Cuts and Jobs Act makes it possible for you to find a big deduction from your existing personal vehicle.

2019 Last-Minute Vehicle Purchases to Save on Taxes

Here’s an easy question: Do you need more 2019 tax deductions? If yes, continue on. Next easy question: Do you need a replacement business vehicle? If yes, you can simultaneously solve or mitigate both the first problem (needing more deductions) and the second problem (needing a replacement vehicle), but you need to get your vehicle in service on or before December 31, 2019. This article helps you find the right vehicle for the deduction you desire.

Q&A: Spousal Business and 199A Deduction

Both you and your spouse have your own businesses. Your spouse’s business provides paid services to your business. Could this arrangement cause you problems when claiming a Section 199A deduction?

Creating More Business Meal Tax Deductions After the TCJA

If you have been looking for some good news on tax-deductible business meals, you will find it in this article. And along with the good news, you will find clarity as to what post-Tax Cuts and Jobs Act rules currently apply to your tax-deductible business meals.

Personal Use of Your Rental Triggers Ugly Vacation Home Rules

When you have both personal and rental use of a dwelling, you trigger some tricky tax code rules you need to know. With both personal and rental use, you create the possibility of tax-free rent, rental property deductions, and additional personal residence deductions.

Check Your Beneficiary Designations Now, Before Disaster Strikes

Surprise! You have an agreement in place that says your retirement account goes to person 1. But you have a beneficiary designation that says the account goes to person 2. Read this article to see which wins and why the winner is likely a big surprise.

Use a Single-Member LLC as a Tax-Smart Real Estate Ownership Vehicle

You find much beauty and little beast in using a single-member LLC for your real estate ownership. Of course, the big beauty is corporate-style liability protection without tax complexity, as you see in this article.

10 Proven Tax Reduction Strategies for the Self-Employed

We took a deep dive into the 263 strategy articles that apply to the self-employed and pulled out 10 that you should spend time with.

Avoid This S Corporation Health Insurance Deduction Mistake

If you own more than 2 percent of an S corporation, you have to follow special rules to deduct your health insurance premiums. The health insurance rules can also apply to family members who work in the business and don’t own a single share of stock. Don’t let the zero stock be a surprise and cost your family money.

How to Deduct Medicare as a Business Expense

When you are in business for yourself, you have options when it comes to creating tax deductions for your health insurance. The tax rules treat Medicare as health insurance, and that means you have options for how to create your tax deductions for Medicare.

2018 Last-Minute Year-End Medical and Retirement Deductions

When you get busy with your business, it’s easy to forget about your retirement accounts and medical coverages and plans. But year-end is approaching, and now’s the time to take action. This article gives you six action steps for 2018 that can help you reduce your taxes and pocket extra money.

Claiming the New Employer Tax Credit for Family and Medical Leave

In many business environments, you compete for employee talent in a variety of ways, including perhaps by implementing a medical and family leave policy. The good news on this front is that your federal government may have given you a tax credit (yes, that lovely dollar-for-dollar offset to your taxes) for what you wanted to do anyway.

Drive Time Increases Odds of Deducting Rental Property Losses

Your rental properties provide tax shelter when you can deduct your losses against your other income. One step to deducting the losses is to pass the tax code’s 750-hour test. One step to finding the hours you need may be your drive time.

Reduce Your Taxes: Make Your Spouse a Business Partner

Tax reform changed the rules of the game when choosing your best tax structure. A properly structured spousal partnership could now be your best choice, even over the S corporation in some circumstances. But beware, you need to navigate nuances in the law to do this correctly.

Q&A: 100% Deduction for Long-Term Care Insurance with 105-HRA

If you are married, operate as a sole proprietor or as a single-member LLC taxed on Schedule C of your Form 1040, and have no employees, you absolutely, positively must consider hiring your spouse and creating the 105-HRA medical reimbursement plan. In this situation, the 105-HRA can cut your taxes without you spending one penny.

Divorce? Alimony? Tax Reform Says Get Divorced Now—Don’t Wait

Learn how the Tax Cuts and Jobs Act changes the alimony rules and what you need to do at this moment if you are in the process of getting a divorce and paying alimony. If you don’t act quickly, your cost of alimony could double.

Reduce Self-Employment Taxes by Renting from Your Spouse

If you operate your business as a sole proprietorship, the government takes a big chunk of your profits in the form of self-employment taxes. But there’s good news. With the help of your spouse, you can reduce your self-employment tax bill by using a simple rental strategy.

Two-Car Tax-Deduction Strategy Approved by the IRS and the Courts

When the two-vehicle tax-deduction strategy works for you, you find new deductions without spending a penny or driving a mile farther. In this article, you find that both the IRS and the courts approve of your use of two or more vehicles for business.

Q&A: Tax Deduction for NFL Tickets

You can deduct NFL tickets under the associated entertainment rules. In this Q&A, our member is traveling from Portland to Atlanta to attend a business conference, and while at that conference, he and his team members will attend the NFL game. The conference creates an easy path to this deduction.

Beware: Selling to a Related Party Can Kill Your Tax Losses

You need to know how the related-party rules work if you don’t want to destroy your tax-loss deductions. You are reading this right: you can lose your tax losses when you sell to a related party.

Child’s College: Use a 529 Plan or Tap Your Roth IRA?

Conventional wisdom says that it’s best to (1) fund your retirement before your child’s college, and (2) use your retirement savings for your retirement and not your child’s college expenses. But conventional wisdom is like a general tax rule. There are exceptions.

Q&A: How the 105-HRA Creates New After-Tax Cash from Health Insurance

 

Q&A: Does My Home-Office Deduction Include My Garage?

 

Q&A: Switch from Mileage Rate to Actual Expense Method

 

Special Needs Education Can Qualify as a Business Expense—Here’s How

Sending a child to a special needs school can be an onerous financial burden, with some tuitions reaching even $100,000 per year. Tax law lets you deduct tuition and other related costs as medical expenses, but you need to know which expenses qualify and how you should deduct them. This article shows you not only how to qualify but also a possible best way to maximize those deductions.

How to Help Your Adult Child Buy a Home—the Tax-Friendly Way

Your adult child asks a big favor—help in buying his or her first home. If you are lucky enough to be able to help, you want to understand and avoid the tax pitfalls. In this article, you find five possible solutions to help your child while avoiding the tax pitfalls.

2016 Last-Minute Year-End Retirement and Medical Tax Deductions

When you get busy with your business, it’s easy to forget about your retirement accounts and medical coverages and plans. But year-end is approaching, and now’s the time to take action to cut your 2016 taxes. This article gives you six action steps for 2016 that can help you reduce your taxes and pocket extra money.

2016 Last-Minute Year-End Tax Strategies for Marriage, Kids, and Family

If you are thinking of getting married or divorced, you need to consider December 31, 2016, in your tax planning. Here’s another planning question: Do you give money to family or friends (other than your children who are under age 24)? If so, you need to consider the zero-tax-bracket planning strategy. And now let’s consider your children who are under age 18. Have you paid them for work they’ve done for your business? Have you paid them the right way? You’ll find the answers here.

Business Tax Deductions with Section 127 Plan for Child’s College

Establish a Section 127 educational assistance plan in your business to help pay your age-21-or-older child’s college or other education costs. If you are in business and you have a child who is age 21 or older in financial need of educational assistance, this is a plan to consider.

Sample Educational Assistance Plan

As a member, you may download this sample Section 127 educational assistance plan in Microsoft Word format. Then, simply modify the document for your business or tax practice use.

Q&A: Section 105 Plan (an HRA) for a Rental Property Business

 

Q&A: Proof for the IRS That No W-2 Is Needed for the 105 Plan

 

Q&A: Social Security Loophole Closing: Act Immediately

 

Make Magic with a Section 105 Plan

Health insurance premiums are rising at an astronomic rate. This is one of the biggest monthly expenses for many families. That’s where, because you are in business, a properly planned and executed Section 105 plan can work for you. This plan works like magic—it turns your medical expenses into tax-favored business expenses.

Fringe Benefits for an Employee-Spouse in an S Corporation

Triple Tax Advantages: Reimburse Your Employee-Spouse for Health Insurance

Schedule C business owners and their spouses must obtain health insurance coverage for themselves (and any other dependents) or risk a penalty under health care reform. While there are many ways to get that coverage, one way—a properly established proprietorship reimbursement arrangement—can lead to three and possibly four significant tax advantages for the business owner and spouse.

2015 Last-Minute Year-End Retirement and Medical Tax Deductions

When you get busy with your business, it’s easy to forget about your retirement accounts and medical coverages and plans. But year-end is approaching, and now’s the time to take action to cut your 2015 taxes. This article gives you six action steps for 2015 that can help you reduce your taxes and pocket extra money.

2015 Last-Minute Year-End Tax Strategies for Marriage, Kids, and Family

If you are thinking of getting married or divorced, you need to consider December 31, 2015, in your tax planning. Here’s another planning question: Do you give money to family or friends (other than your children who are under age 24)? If so, you need to consider the zero-bracket planning strategy. And now let’s consider your children who are under age 18. Have you paid them for work they’ve done for your business? Have you paid them the right way? You’ll find the answers here.

Secrets to Pocketing Cash by Renting a Bedroom in Your Home

If you want to rent one, two, or twenty bedrooms in your home, you need to avoid one big trap and navigate two sets of rules to obtain the tax benefits you likely were hoping for when you thought of this rental activity. This is an area where tax knowledge is power. Without the knowledge, you could create a very unsatisfactory tax result.

Cut the Cost of College with Tax Credits

The paradox of choice applies when you consider the multitude of tax benefits available when paying educational expenses. In this article, we help you put money in your pocket by taking both the paradox of choice and the complexity out of two education tax credits with our step-by-step guide.

Beat Sneaky Traps and Unfair Limits on the Self-Employed Health Insurance Deduction

The self-employed health insurance deduction could give you a big surprise when you file your taxes—and that’s not good. The law imposes a couple of restrictions that many people don’t know about and that might strip you of your tax savings. Take some time right now to figure out whether you qualify for the deduction and if not, what you can do about it.

Tap Your Roth IRA the Right Way—Tax-Free and Penalty-Free

A Roth IRA is not your average retirement plan. It’s a retirement savings, boondoggle savings, down payment savings, college savings, and emergency savings plan all wrapped into one. But to realize the benefits, you need to know how to avoid taxes and penalties when you take the money out. The good news: do this right and you can tap that Roth IRA and pay ZERO taxes and ZERO penalties.

Reward Yourself and Your Employees with Tax-Free Supper Money

Have you ever faced this “problem”? A sudden boom in business requires you and your employees to work late in order to get everything finished. When this happens, how can you thank your employees for their overtime with a tax-free benefit that’s fully deductible to your business? You can provide a supper money fringe benefit if you follow four rules.

Four Steps to Turn a Husband-and-Wife-Only Board Meeting into a Money-Saving, Tax-Deductible Resort Stay

Where can you hold your tax-deductible board meetings if you operate your business as a corporation? Could you go to a nice resort? What if you and your spouse are the only board members? This article answers these common questions. It’s sure to make you smile.

The Easiest and Funnest Deduction You’ll Claim This Year: 4 Rules for Writing Off Employee Outings—100%!

The government wants you to have happy employees. That’s why the tax code grants you extra deductions when you provide entertainment and entertainment facilities that primarily benefit rank-and-file employees. In this article, we examine how the rules work when you take your employees on a party trip.

Make Your Company Party More Fun: Find Thousands More in Legal Tax Deductions!

Lawmakers may not always make your life easy, but at least you know they want you to have fun every now and then. The tax code gives you a 100 percent deduction for the parties that you throw for your employees—as long as you invite the right kind of employees.

Deduct More of Your Rental Property Losses by Qualifying as a Real Estate Professional—Even If You Don’t Work in Real Estate!

Your rental property is worth more to you than simply the generation of rental income. Your property may also create tax losses that you can use to offset your income from other sources. It’s not as easy as it used to be to make your rental property a legal tax shelter, but you can still do this if you put in the right number of hours toward the right type of work.

Married? You May Qualify for Huge Deductions on the Net Losses of Your Rental Properties

There are special rules that you need to know regarding the deduction of your net losses if you co-own or co-manage a business or investment with your spouse. Tax law gives you some nice advantages, but they’re not what we would call logical. If you don’t know how the rules work, you might be missing out on money-saving benefits.

4 Ways to Turn Your Cars, SUVs, Trucks, and Vans into More Profitable Tax Deductions

December 31 is just around the corner. That’s likely your cutoff date for finding tax deductions that will cut your 2014 taxes. And remember, your 2014 taxes are the highest they’ve been in 28 years. This article helps you identify tax deductions embedded in your existing business and personal cars, SUVs, trucks, and vans.

4 Year-End Tax-Deduction Strategies for Business Owners Who Are Married, Getting Married, and/or Have Children

In your last-minute search for tax deductions, examine your children under the age of 18, your marital status, and your relatives in the zero tax bracket. With some planning, you can save good tax money here.

Reduce Self-Employment Taxes by Renting from Your Spouse

If you operate your business as a sole proprietorship, the government takes a big chunk of your profits in the form of self-employment taxes. But there’s good news. With the help of your spouse, you can reduce your self-employment tax bill by using a simple rental strategy.

 

How to Increase Vehicle Tax Deductions without Spending a Penny

When you own a business, you should look at all possible assets that you own personally and how you might use them to increase your business deductions. This is particularly true for vehicles. And the beauty of identifying assets such as personal vehicles that you can use for business is that you don’t spend money to create deductions. You simply use assets you already own.

Is a W-2 Wage Needed to Create an Employee-Spouse 105 Plan?

If you operate your business as a proprietorship and hire your spouse as an employee, you likely have questions about the need to pay wages to make your spouse a bona fide employee. And you likely want your spouse as a bona fide employee who receives as a tax-free fringe benefit a Section 105 medical reimbursement plan—family coverage, of course.

Deduct Golf Expenses by Knowing When to Speak

If you have ever had a tough day on the golf course, you might not think of golf as “entertainment,” but that’s how the IRS classifies the activity. This is good news for you because it means that in the right circumstances, your golf expenses are deductible. Read this article and discover the unique rules you need to follow to ensure your deduction for golf (and other associated entertainment activities too).

Tricks to Deducting Meals with Your Spouse

Would you like to deduct business meals with your spouse? What would the IRS think about that? If the IRS said that the meals were not deductible, what would the courts say? You would think there are hundreds of rulings and court cases that explain this. Not so. There is one tax rule that mostly assures the deduction, but it requires an addition. Spend a few minutes learning how tax law treats your spouse when it comes to business meals.

Tax Deductions for Entertainment Facility (Part 3), Employee Use

Learn how employee use of your ski cabin or beach home produces a 100 percent business asset with deductions for depreciation, operating expenses, and mortgage interest. This can make for a great fringe benefit for both the employees and you. It also can make for a profitable investment.

Incorporating Your Proprietorship

When you incorporate your business, you have to decide which assets you want to contribute to your new corporation and which you want to keep in your own name. For some assets, you get better tax benefits and better liability protection when you don’t transfer them to your corporation.

Does Your Section 105 Plan (HRA) Work for You after Obamacare?

The new 2014 Obamacare tax rules that apply to health reimbursement accounts (HRAs) such as Section 105 medical reimbursement plans make it difficult and impractical to have a Section 105 plan or other HRA when you have two or more employees. But if you have no employees or only your spouse as an employee, you escape the jaws of Obamacare and your Section 105 or other HRA plan gives you all the good tax benefits that you had before Obamacare.

Own Rental Property? Escape the Obamacare Tax—Use New IRS Rules

Are you subject to the new 3.8 percent Obamacare tax? Do you own rental property? If so, use one of the three escapes in this article so that your rental property can avoid the 3.8 percent tax. The three escapes revolve around the concept of a rental property as a trade or business property. The IRS just released new safe-harbor rules making it easy for some owners of rental real estate to qualify their rentals as trade or business property exempt from the 3.8 percent tax.

Buying a Business? Protect Your Investment and Deduct It, Too

When you buy a business, buy the assets—not the stock. The assets will significantly increase your tax savings in the early years of your new business. This article gives you the nuts and bolts of buying a business. It even explains how you can buy the stock of the target corporation and treat the stock purchase as an asset purchase.

2014 Attack by Obamacare on Section 105 Medical Plans (HRA Plans)

For tax years’ beginning after December 31, 2013, Obamacare contains good and bad news for Section 105 medical reimbursement plans—health reimbursement accounts (HRAs). Bad news: the new health law requires that you pay for group health insurance if you want a Section 105 plan for more than one employee. Good news: with one employee only, such as your employee-spouse or yourself if you operate as a C corporation, you don’t have to buy group health and you can reimburse expenses as you always have.

10 Last-Minute Tax Deductions for Business Vehicles

Your tax-benefit time for your business and personal vehicles is running out on December 31. If you are going to do something, do it now. This article gives you 10 year-end tax-benefit strategies for replacing or adding a business vehicle.

Year-End Tax Deduction Tips for Kids and Marriage

You have some last-minute tax deduction opportunities with your family. Do you have children under the age of 18? If so, you should consider having them on the payroll. In this article, we explain how you benefit. Also, your marital status gives tax-planning opportunities. Have you been giving cash to relatives, other than your under-age-24 children? If so, you need to consider the 0 tax-bracket strategy in this article.

Avoid These Common Mistakes When Converting to an S Corporation

Are you thinking of converting your business to an S corporation? The IRS will be watching you closely. Learn to avoid the common mistakes that many business owners make.

IRS Rules Same-Sex Married Couples Are Legal Spouses for Taxes

The IRS just ruled that a same-sex married couple are spouses for federal income tax purposes. This means the same tax deductions and tax benefits that accrue to other married couples now accrue to same-sex married couples. The IRS ruling is a direct result of the Supreme Court’s decision in Windsor. This article sets forth business and personal tax breaks that marriage provides.

Make Your Section 105 Plan Work in Retirement

Let’s say that you have the Section 105 medical reimbursement plan in place that benefits you and your family. What happens if you or your employee-spouse retires? Here’s good news. With planning, your Section 105 plan can continue into retirement.

Being Married!

Do you gain or lose tax advantages when you marry? Lawmakers have tried to deal with the marriage issue for years, and they have made multiple changes in the laws. But there’s no perfect law, so winning and losing because of marriage still exists.

Tax-Deduction Benefits for Section 105 Plan

This article answers Section 105 medical reimbursement plan questions from two 1099 independent contractors, a husband and wife, who work for the same firm but file separate Schedule Cs. The good news is that they can substantially increase their medical deductions by using a Section 105 medical plan where one spouse becomes the employer-spouse and the other becomes the employee-spouse.

Cut the Spouse’s Tax Cost of Inherited IRAs

Inheriting an IRA used to mean a heavy estate tax and federal income tax burden. But recent changes to the estate tax have significantly reduced this burden. Further, spouses have special income-tax planning techniques available that can make inheriting an IRA today a much happier experience.

Tax Deduction for Disneyland Tickets

When you attend a convention or similar meeting, your attendance automatically qualifies as you having a substantial and bona fide business discussion. When you precede or follow a substantial and bona fide business discussion with entertainment that takes place in a non-business setting such as going to Disneyland, you qualify to deduct the cost of the Disneyland tickets.

Tax Deduction for Home Office with Two Businesses

Your ability to deduct a home office is straightforward until you allow your spouse to use the office or you add a second business to the mix. When your spouse uses the office or you add a second-business, your home-office tax deduction becomes more complicated.

9 Year-End Business Vehicle Tax Tips

If you want to do something with your business vehicles this year, you don’t have much time left. This article gives you the year-end strategies you need to ensure maximum tax benefits should you decide to replace or add a business vehicle.

Shellitos Win Their Section 105 Medical Reimbursement Plan Deductions

Good news. As you may remember from our previous article, the 10th Circuit Court of Appeals sent the Shellito case that involved a Section 105 medical reimbursement plan back to the tax court. We report in this article good news: The tax court reversed its original decision and granted the Shellitos their deductions. Most importantly, this reversal adds clarity to making your Section 105 medical reimbursement plan work.

How to Deduct Travel by Car, Train, Plane, or Boat

You have a wide variety of choices on how to travel for business. You can use a car, train, plane, or boat. You can fly economy, business, or first class. Should you own a plane, you can use it for business travel. Special rules apply to the plane, boat, and car; accordingly, if you travel for your business, you should know the rules in this article.

New Rules Reveal Six Ways to Lower Taxes on Your Personal Use of Your Corporation’s Airplane

Do you own an airplane? If not you, how about your corporation? This month, we are writing about the new IRS regulations that govern your use of your C or S corporation’s aircraft. In this article, you will find more than a half dozen strategies that you can use to minimize the tax bite caused by personal use of your corporation’s aircraft.

Tax Tips for Tax-Free Life Insurance

Is your receipt of a life insurance death benefit tax free to you? For income tax purposes, the likely answer is yes. But when you get into the estate, the answers are (1) maybe, (2) no, or (3) yes, depending on who the recipient is and what type of planning has taken place. Life insurance planning is important now because the current $5.12 million exemption from estate taxes expires on December 31, 2012, and lawmakers slotted the 2013 exemption at $1 million and increased the tax rate from 35 to 55 percent.

Legal Structure to Save Taxes for the Husband-and-Wife Business (Part 2 of 2)

If you and your spouse work together in your business, you need to know the rules of the road for owning and operating your proprietorship, limited liability company, or corporation. In part 1 of this article we discussed how you can save both self-employment and income taxes with the right mix of income and employee status of your spouse. In this part 2, you learn what you need to do to ensure that your operating business entity allows you to achieve the benefits of part 1.

Legal Structure to Save Taxes for Husband-and-Wife Business (Part 1 of 2)

Your husband-and-wife business may already be a success. That’s great. Now, with a little tax planning for the husband-and-wife business, you can increase your after-tax profits and sleep better at night knowing that your business form is good.

Better Deductions for Long-Term Care Insurance Costs

Because you are in business, you likely have the opportunity to improve your tax deduction for long-term care insurance. In fact, you might achieve a 100 percent deduction. If you are married, the 100 percent deduction can include your spouse.

Is the S Corporation the Best Tax-Deduction Entity for Your Business?

To know if the S corporation is the best choice of entity for your business, first you need to consider three advantages and nine disadvantages. Next, you need to take the S corporation advantages and disadvantages that apply to you and get a bottom-line number comparison with your second choice for an operating entity. In this way, you can make a logical choice, knowing that your best choice will stay with you for a number of years and let you pocket more after-tax cash while you sleep better at night.

New IRS Notice Makes More Spouses Eligible for Innocent Spouse Tax Relief

When the husband or the wife cheats on taxes, both spouses are liable for the unpaid taxes and penalties. However, the non-cheating spouse can qualify as an innocent spouse or for equitable relief. In new guidance, the IRS has made it easier for the non-cheating spouse to get out of paying the taxes.

Tax Rules for Section 105 Plan with Multiple Businesses

When you and/or your spouse own more than one business, you must look at all businesses as one business when applying the Section 105 medical reimbursement plan discrimination rules. If you are blocked by the discrimination rules, consider discriminating in health insurance coverage to your benefit.

IRS Now Says No Payroll Taxes on Family Employment in a Single-Member LLC

The IRS admits that its regulation that made the single-member LLC a corporation for payroll tax purposes is unfair to small business family employment. To right this wrong, the IRS allows the single-member LLC to use the family employment rules to exempt FICA and Medicare taxes retroactively to January 1, 2009. The regulation granting this change expires on or before October 31, 2014.

Single-Member Limited Liability Company (LLC) as Choice of Entity

In the right circumstances, the single-member limited liability company (LLC) gives you corporate liability protection combined with easy Schedule C (proprietorship) rules for your tax return. In this article, you learn the two tax advantages and two tax disadvantages to the single-member LLC.

Last-Minute Year-End Tax Planning for Your Business Tax Deductions

Are you looking for more tax deductions this year? It’s not too late. Learn 12 last-minute tax-planning ideas that you can implement to create or push more deductions into this year so you can pay less in taxes this year.

Road Map to Section 105 Plan Deductions

The appeals court remanded the Shellito case back to the Tax Court along with its road map for establishing the Section 105 plan. In the right circumstances, the 105 medical plan creates tax deductions where none existed before, and its tax-free fringe benefits can operate as the sole remuneration to the employee-spouse.

IRS Lets Small Business off the Hook for W-2 Reporting of 105 Plans

If you are married, operate your business as a proprietorship, and have only your spouse as an employee, you likely want a Section 105 medical reimbursement plan that can turn most, if not all, of your medical expenses into business deductions on your Schedule C. Before health care reform, you did not need to give your employee-spouse a W-2 for Section 105 medical plan reimbursements. Now, thanks to the IRS, the Section 105 medical reimbursement W-2 requirement for small businesses does not apply before the 2014 W-2 reporting season—and may not apply afterward.

Tax Tips for Divorce (Part 2)

Part 2 of the divorce series of articles covers your retirement plans and IRAs. Your goal when giving a little or a lot of your retirement plan to your ex is likely to be that he or she who gets the cash should pay the taxes. To make the taxes follow the money, you need specific words in the right divorce documents. If you fail to put the words in the right place, you can give the cash to your ex and double whammy yourself by paying taxes and penalties to the IRS.

Tax Tips for Divorce (Part 1)

You have at least three parties in your divorce: you, your soon-to-be ex, and your Uncle Sam. Yes, as with almost everything, there are tax consequences to a divorce. This article puts you on a path that will help you protect your money and your assets.

Nine Important Facts about the New Age 27 Health Insurance Rules

The new under-age-27 health insurance coverage grants windfalls, pitfalls, and planning opportunities.

Tax Tips for the New Estate and Gift Tax Rules

The newly enacted tax cut creates a new 2011 and 2012 estate tax. The new rules are taxpayer friendly in two respects. First, they are easy to understand. Second, they contain a $5 million exclusion (portable, if properly elected, for husband and wife, giving a married couple an exclusion of $10 million).

Tax Choices for Estates of Those Who Died in 2010

Tax law gives choices to the executors who are handling the estates of those who died in 2010. Choice one is to apply the 2010 rules. Choice two is to apply the newly enacted 2011 and 2012 estate tax rules.

IRS Says No Tax Credit on Health Insurance Premiums Paid for the Proprietor’s Employee-Spouse

New guidance from the IRS on the new health care law says the owner of a business (proprietorship, corporation, LLC, etc.) may not claim the 35 percent tax credit on the health insurance premiums paid to cover his or her spouse.

Tax-Free Supper Money Tax Tips

Do you provide supper or other meal money when you require your employees to work overtime? If so, is the meal money a tax-free fringe benefit or is it additional W-2 compensation to the employees?

12 Last-Minute Tax Tips Not Related to Vehicles for 2010

This issue contains 21 last-minute tax tips that you can use for 2010. We broke the tips into two articles: one for vehicles and one not related to vehicles. This article contains 12 last-minute tax tips that are not related to vehicles.

Tax-Saving Tips for Married Taxpayers Claiming Section 179 Deductions

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.

Home-Office Deduction with More than One Business

With one business use of the home office and no personal use, you qualify for the deduction. The second business use, employee use, and spouse use must equally qualify for the home-office deduction, or else.

Tracking Personal and Business Checking Accounts

Computers and programs like Quicken make it easier to track business and personal activities. Even so, there are rules of the road that you should follow to ensure the best results.

Apply Section 179 Expense against W-2 Income

Section 179 expensing is available against business income. For this purpose, business income is defined to include, among others, W-2 income.

Creating a Dependent Care Credit

With net business income less than $115,647, the sole proprietor with two qualifying children and a stay-at-home spouse can hire the spouse and pay a wage of $6,000 to create a $1,200 child care credit with no change in their joint income taxes—other than realization of the $1,200 credit.

Section 179: Avoid These Three Things

When you claim a Section 179 expensing deduction, you make a deal with the government. You agree to give back your early tax benefits if, during the recapture period, your business use drops to 50 percent or less.

Husband and Wife S Corporation Board Meeting

The Heineman case gives a roadmap to how a husband and wife might deduct the cost of attending a board of directors meeting where they are the only participants. Using the principles enunciated in Heineman, husband-and-wife corporate owners will find deducting the out-of-town board meeting easier than deducting board meetings that occur in town.

It’s Ski Season—Let’s Make Your Skiing Deductible

The first thing to get straight with the skiing deduction is that it is deductible as associated entertainment. Thus, you need a bona fide business discussion in a business setting before or after the skiing. If you are staying overnight, remember that lodging for business entertainment purposes is not deductible, but lodging for business education or meetings is deductible.

 

Discriminate with Your 105 Plan

Use this Section 105 medical reimbursement plan template to make sure you provide maximum medical benefits to you and your family while legally discriminating under both tax law and ERISA rules.

 

Dinner with Husband

You are talking to yourself (for tax purposes) when you discuss business with your husband over dinner. This is a nondeductible experience.

Dependent Care Credit

The sole proprietor may not claim a business deduction for child care that enables him to work. The tax benefit for this type of child care comes on the personal income tax return as a dependent care credit.

Husband and Wife 1099s

When husband and wife receive individual 1099s from the same firm, they generally can improve their after-tax cash results by having one spouse earn the 1099 income and having the other spouse work as an employee.

Husband-and-Wife Joint Venture Election Does Not Apply to LLCs

The IRS just posted the limits on its website, but there is still one way to elect single-member status. We give you the details and planning strategies.

CPA Incorrectly Says No to 105 Plan

CPAs are not always right! One couple tries to get Section 105 benefits, and is incorrectly refuted by their accountant. We give evidence to support our position, and advice on how to get Section 105 benefits.

Husband-and-Wife Business Election

To file for joint partnership of a business, you must attach a written statement to your 1040. There is no official form to use, so we give you an example of what you can say.

Pocket Self-Employment Taxes by Renting from Your Spouse

If you are single, forming an S corporation can be your “no-hassle spouse.” Rent from the corporation, and you can save money in self-employment tax.

Good News for 105 Plans

In an ISP, the IRS asserted that the Section 105 medical reimbursement plan may not reimburse the employee-spouse for the cost of health insurance purchased in the employee-owner’s name. This court case held that this IRS position is wrong and that the owner may deduct the cost of medical insurance purchased in his name when that insurance is covered by the Section 105 medical reimbursement plan.

Audit Guide for Your Self-Employed Section 105 Plan

Answering “yes” to the 11 puts you on the road to audit-proof status for your Section 105 medical reimbursement plan.

 

Husband and Wife Joint Venture

The husband and wife who work together must consider the joint venture election if they want the business treated by the IRS the way they think it should be treated.

 

Cruise to Mexico

Taking a cruise ship to Mexico for a business meeting is an acceptable, and deductible, form of travel.

 

Solo 401(k) for Employee-Wife

This proprietor paid his employee-wife $12,000 in wages. Now, she wants to contribute the entire $12,000 as an elective deferral to her 401(k) account but she no longer has $12,000 because of payroll taxes. With some mechanical adjustments, the employee-wife may contribute the full $12,000.

Solo 401(k) with Your Employee-Spouse

The combination of a Section 105 medical plan and a $15,500 salary to the spouse generated a $32,875 tax deduction for the business, no taxable income for the spouse, and a cash contribution to the spouse’s 401(k) retirement account of $19,375.

 

Entertaining My Husband

Talking business with your husband does not create a tax deduction for entertainment. For this to work, you need to create a situation where you can use the closely connected rule.

 

Bad Year Deductions

One spouse’s business losses can be written off against the other spouse’s income. Think like this: In a loss year, the business spouse provides tax shelter.

New Law Requires a Tax Plan for Husband-and-Wife Proprietorships, LLCs, and Partnerships

The new Iraq war funding law contains a new tax law section on “family business tax simplification.” If you and your spouse work together in the business, it is time to pay attention and examine this new law.

Husband-and-Wife Corporate Meetings

As owners of an S corporation, you probably are allowed to forego the stockholders’ and directors’ meetings. However, you may not want to. By skipping these meetings and other “corporate” activities, you appear less like a corporation in the eyes of the law.

Marriage Qualifies for Part of $250,000 Home-Sale Exclusion

The $250,000 home-sale exclusion is a major tax break. To qualify for the exclusion, you must have owned and lived in your home for two of the past five years. You can get out of the “two out of five year” rule by unforeseen circumstances, like, say, marriage.

S Corporation Loses Child Care Deductions

Tax court and the IRS establish that child care is not an ordinary and necessary expense and, thus, is not deductible. This ruling, though sloppy (we show you why), establishes a precedent. However, under section 129 in the tax law, the employer may provide child care benefits.

Section 105 Benefits

It is possible to save big on medical insurance if you use the Section 105 Medical Reimbursement Plan. If you navigate the tax law correctly, you might be able to save $4,000, like one taxpayer. Knowledge is power.

Wages on Schedule E

Schedule E allows wages, but it does not have a separate line item for them. So, when you are hiring your spouse to work on your rental properties, file the work as “ordinary and necessary expenses to save money on taxes.

Wages and 105 Plan

If you hire your spouse, you can save a lot of money in taxes by not paying him/her a wage. Instead, cover him/her and your family with medical benefits under Section 105.

Top Producer Trip

When you win a top producer award trip to a fancy resort or location, create educational events for yourself to qualify your trip for business travel deductions. When you get this right, you offset the 1099 award value with bona fide business travel expenses.

Solo 401(k) Could Be the Perfect Retirement Plan for You

Incorporated and unincorporated businesses can use the solo 401(k) to benefit the owner (including a husband and wife). In most cases, the solo 401(k) allows the one-owner or husband-and-wife owners to put away more than they could in other plans (up to $49,000 this year, depending on age and earnings—adjusted for inflation in future years).

IRS Puts Screws to S Corporation Health Insurance

The more than 2 percent owner of an S corporation may not benefit from a fringe benefit like corporate paid health insurance. Further, this owner-employee is not “self employed” for purposes of deducting self-employed health insurance on page 1 of IRS Form 1040. This leaves the more than 2 percent owner with only one IRS approved method for gaining the maximum deduction from health insurance.

Why Tax Planning Is Important for the Self-Employed

The one-owner or husband-and-wife owned businesses can gain significant income by learning how to reduce the largest expense they pay during their lifetimes (taxes). In this respect, the self-employed are both cursed and blessed. Cursed because they pay a larger percentage of their net income in taxes than anyone else in the country. Blessed with business deductions that, when used properly, not only balance their taxes with those of the average employee, but actually mean (if they are paying attention) that they pay a whole lot less.

Death Taxes the IRA

At death, IRAs are not treated like homes, which pass to the heirs at fair market value with no income tax issues. Instead, the IRA faces both the estate tax and the income tax. In this court case, the combined estate and income taxes devoured $1.6 million and the heirs had $1.1 million left to spend.