Recent Feature Headlines


December 2017

Entertainment Tax Deductions Look Fishy

It’s true—you don’t need a receipt for an entertainment expense that is less than $75. But you may need to prove that you had the cash available to pay for your entertainment that cost less than $75.


Business Mileage: Beware of IRS Assertions of Metropolitan Area

The business mileage rules can get tricky, and this is especially true if you drive both inside and outside your metropolitan area. This metropolitan area is not what you think it is. The IRS and the courts have created special confusion about your metropolitan area.


Q&A: Say Good-bye to Unclaimed Tax Refunds

Even if you are not required to file a tax return, you need to file a return within the statute of limitations if you are due a refund and you want the cash. If you fail to file a return within the statute of limitations, you forfeit your refund and make a contribution of that refund to the government.


Home Office with More than One Business or Spouse Invasion

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


Are Your Rental Properties a Business? If So, You Win

If you own rental properties, you don’t want the tax law to call the rentals an investment. Instead, you want the rental properties to qualify as a trade or business so that you achieve tax-favored Section 1231 treatment and many other tax breaks.


Tax Savings Trap Crushes S Corporation Owner’s Expenses

What can appear logical when planning for the S corporation owner’s business expenses can prove costly to the owner and, as in this article, cost every penny of the business deductions.


Q&A: Desktop Tax Rates for You

We have had requests for a desktop reference that you can use to quickly look up the 2017 tax rates. You can download the 2017 reference with the link that’s in this article.


Cashing Out Real Estate Profits without Section 1031

Section 1031 exchanges are perfect when you are going to stay in the real estate rental or investment business. When it’s time to cash out, you need to look at different strategies that help you avoid taxes and give you cash to spend (liquidity).


Six Ways to Beat the Passive-Loss Rental Property Rules

You want to deduct your business, rental, and non-rental losses when possible, because those deductions put cash in your pocket. The sooner you get the cash, the faster you can put that cash to work for you building your net worth. This article helps you realize those losses sooner.




November 2017

Create Extra Cash by Using Depreciable Antiques in Your Business

You really should consider antiques when furnishing your offices or buying a unique second business vehicle. Unlike regular furnishings and vehicles, well-selected antiques increase in value. Also, you can depreciate or even Section 179 expense them. When you run the after-tax numbers, you can easily find that an antique will yield 36 times more after-tax cash than a non-antique.


Q&A: 33 Last-Minute Tips to Save on Your 2017 Taxes

If you are looking for some last-minute tips to save on your 2017 federal income taxes, this article has what you need.


Yikes! New IRS Audit Tool: The Form 1099-K Letter

The 1099-K gives the IRS another audit weapon. In this article, you see how an IRS revenue agent uses the 1099-K to catch taxpayers who underreported their gross income. You also learn why you are likely to receive a letter from the IRS auditing or asking about your 1099-K amounts.


Beware When Children Use IRAs and/or Savings to Pay for College

When it comes to college planning, your lawmakers created some real traps. One big trap is the kiddie tax. This insidious tax destroys the traditional IRA as a college funding source and does much the same to your child’s interest and dividends savings. There’s much to know here, and we make it clear.


Q&A: Traditional IRA Eliminates Kiddie Tax Here, But…

Do you have children who are currently subject to the kiddie tax? Could those children work for you or someone else and create some earned income? If so, the strategy in this Q&A can eliminate or reduce the kiddie tax.


Don’t Let IRS Mileage Rules Destroy Your Vehicle Deductions

What percentage of your business vehicles would you (or your business) like to deduct? To achieve your desired percentage, you need to know and apply the rules that the IRS applies to the mileage that you drive from your home to various business destinations.


Abandoned by Tax Advisor, Taxpayer Wins IRS Audit

The woman in this audit learned how tax knowledge can turn what appears as a nightmare (an IRS audit) into a positive happening—meaning cash refunds for the year of the audit and subsequent years. As the old saying goes, “knowledge is power.”


Update: 2018 Health Insurance for S Corporation Owners

In IRS Notice 2015-17, the IRS allowed S corporation owners in 2014 and 2015 to avoid the $100-a-day penalties on S corporation reimbursements of individually purchased health insurance and on providing insurance for the owners only. But 2016, 2017, and 2018 are new years, so what is that status now?


Act Now! Get Your 2018 Expensing in Place

If you have not done so before, make sure to put your safe harbor de minimis expensing election in place now. The new de minimis rules make your tax record keeping easier. With this safe harbor expensing, unlike with Section 179 expensing, you don’t need to track the assets and keep them in a depreciation schedule.




October 2017

Find New Deductions with Two-Car Tax Strategies

If you have two or more vehicles in your family, you might find added tax deductions by driving more than one vehicle for business. To know if you benefit or not, you need to put your numbers into our magic two-car formula. This is very easy to do, and the formula result tells you for sure whether you come out ahead or not.


Q&A: Administrative Home Office Is a Principal Office

The special rule that applies to administrative or management use of the home office creates a principal office. There are only two ways to create a principal office in your home. The administrative or management office works when you have two offices: (1) an office in the home and (b) an office outside the home.


A Tax Break for American Builders—Including You (Yes, You)

You may not think of yourself as a manufacturer, but you might nevertheless qualify as one under tax law. There is a deduction for manufacturing that applies to a much broader array of activities than most people realize. There’s no catch and no recapture associated with this deduction—it’s just extra cash for your wallet. Find out if you qualify.


Q&A: Find Some Tax Sanity by Using the Gambling Per Session Rule

Tax law does not like you if you are a casual gambler. If you are a casual gambler, you report your winnings above the line, where those winnings can increase your taxes, cause loss of deductions because of phaseouts, and increase your Medicare premiums. Your losses are itemized deductions that appear below the line, where you benefit only if you itemize. There’s no choice about where you report your winnings and losses, but there’s a way you can use the per-session rule to mitigate the damage this reporting causes.


Update on Health Savings Accounts (HSAs)

Health savings accounts (HSAs) have gained substantially in popularity since enactment of the Affordable Care Act. Tax-wise, the HSA has some great features such as tax-deductible contributions, tax-deferred (even tax-free if used correctly) growth, and possible retirement benefits.


Easily Fixing Depreciation Errors Can Save Thousands in Taxes

Depreciation is a valuable tax deduction but is often missed or mistakenly computed. If you missed depreciation or did it incorrectly, you can fix it in the current year and get some possible major tax benefits for doing so. In fact, the need for a correction can create planning opportunities for you.


Shedding Doubts about Selling Your Home to Your S Corporation

If you want to convert your home to a rental property, don’t. Instead, sell your home to your S corporation and then have the S corporation make the property a rental property. We have written about this previously, and we received some questions that we address in this article.


Q&A: Tax Deductions for Nine Months of Out-of-Town Travel

How does the tax code define a temporary assignment that qualifies you for tax deductions during a full period of stay, such as nine full months? In this article, you learn how federal per diem rates interact with some actual expenses and what you need in place to achieve deductions for a temporary out-of-town work assignment.


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.




September 2017

Get Paid: Hire Your Child

You can pay your child to work in your business and get paid for paying your child. Yeah, we know. You think this sounds too good to be true, but it’s true. For how the government pays you and why this works, read this article.


Q&A: S Corporation Distributions in Retirement

A business owner accumulates earnings in an S corporation and takes no distributions or salary. The business owner then retires and wants to draw the funds out tax-free over multiple years. Are there any issues with this strategy?


A New Way to Beat the 50 Percent Cut on Business Meals

The Boston Bruins deducted 100 percent of their meal expenses for employees who traveled out of town for the away games. The IRS challenged that 100 percent and lost. One big deal with the Bruins’ win is that it is precedent-setting, meaning that the Boston Bruins may have created a road map for you that could lead to more 100 percent business meal–expense deductions (versus the usual 50 percent allowance for business meals).


Five Tried-and-True Strategies for an IRS Audit

If you’re like millions of taxpayers, just the thought of an IRS tax audit has you shaking in your boots. Luckily, you came across this article. In the next few moments, we will put those fears to rest as we show you how to keep all your rightful tax deductions.


Q&A: S Corporation Reimbursement of My Home-Office Expenses

If you operate your business as an S corporation and you take advantage of the benefits you receive by having an office in your home, you probably want an easy and audit-proof way to make the reimbursement request. You find that in this article.


Don’t Get Surprised by the Related-Party Matching Rule

The related-party matching rule places your business on the cash method for deducting payments to related cash-method payees. You need to know this rule to avoid unexpected tax results. Also, you need to know how the different ownership thresholds apply because one share of stock could make you a related party. Indirect relationships expand the reach of the rule and can create additional surprises.


Avoid Partnership Tax Filing with Two Little-Known Elections

Having a business or activity operated as a partnership means extra tax return filings and compliance headaches. But you might qualify to elect out of partnership treatment. Here, we discuss the two elections available, when you qualify or not, and the impact of making an escape election.


Arguing with the IRS: Making the Courts Help You (Part 2)

When you and the IRS disagree about an item on your tax return, you need authority on your side to either win your case or avoid a penalty. Court decisions can be a valuable authority to convince the IRS that you are right. We’ll discuss the various types of court decisions and which ones can help you the most.


Do This Right: Claim a Tax Credit for Sending Your Child to Camp

You may be able to claim the child and dependent care credit for the cost of sending your child to summer camp or a before- or after-school program, but only if it promotes your child’s protection and well-being, and is not for education or another purpose.