Recent Feature Headlines

September 2022

More on Earning 9.62 Percent Tax-Deferred

Inflation is seldom a good thing. But when it comes to investing, the U.S. Treasury Department has an inflation opportunity that’s downright amazing. You can buy bonds that pay 9.62 percent—tax-deferred—with no downside risk, and with no state or local income taxes when you cash them in.

New Law: Business Tax Credits for Your Electric Vehicle Purchases

If you purchase an electric car or a plug-in hybrid electric vehicle to use in your business, you can qualify for a brand-new commercial clean vehicle tax credit worth up to a whopping $40,000. But that’s not all.

Learn How to Claim the ERC When You Own Multiple Entities

If you have not claimed the employee retention credit (ERC), you can amend your 2020 and 2021 payroll tax returns to claim it. In this article, you will learn what’s needed and what happens when you have to combine business entities for purposes of the ERC.

Defeat the $10,000 SALT Cap with the PTE Tax (Part 2)

Already, 29 states have enacted pass-through entity taxes as a workaround to the $10,000 cap on deducting state and local taxes, but each has different requirements that business owners must comply with to take advantage of the deduction.

S Corporation Reimburses the Owner-Employee for the Home Office

The home-office deduction continues to be misunderstood in a variety of ways. In this article, the taxpayer’s CPA tells her that there’s no tax benefit to the home-office deduction for an S corporation and that the home-office deduction applies only to the self-employed.

Cash In: Beat the Taxman with 11 Tax-Free Income Breaks

Do you like the phrase “tax-free”? If so, spend some time with this article because it shows you 11 tax-free income breaks.

New Law: New and Improved Energy Tax Credits for Homeowners

The Inflation Reduction Act extends and expands tax credits for making your home more energy efficient. These include a healthy 30 percent credit for installing home solar panels; credits for installing energy-efficient windows, doors, and insulation; and even a credit for installing a home electric vehicle charger.

Overcoming the IRS Audit That Incorrectly Attacks Deductions

The IRS examiner can make a mistake. But the question is: Will you know it’s a mistake? In the situation described in this article, the tax code contains the answer. The taxpayer simply had to be familiar with it.

Tax-Free Conversion of a Partnership into an S Corporation

You can convert a partnership into an S corporation tax-free (or mostly tax-free) in a variety of ways, as explained in this article. So, if you want to convert your partnership to an S corporation, spend time with this article.

August 2022

Act Now: Claim Your 2020 and 2021 Employee Retention Credit (ERC)

Did you claim the COVID-19-inspired Employee Retention Credit (ERC) in 2020 and/or 2021? You likely qualified for the ERC under one of the tests that you will see in this article.

Act Now: Earn 9.62 Percent Tax-Deferred

Series I bonds can make a great risk-free investment during these troubling inflationary times. If you don’t know about them, read this article for how they work (and they work really well).

Defeat the $10,000 SALT Cap with the PTE Tax (Part 1)

The IRS says that owners of pass-through entities can get around the $10,000 federal cap on deducting state and local taxes by electing to have their entity pay state income tax and then having the entity deduct the taxes as a federal tax deduction.

Q&A: Does Grouping Rental Properties Release Suspended Losses?

When you have suspended passive rental losses, you have a tax-loss savings bond that matures (grants your deductions) when you qualify as a tax-law-defined real estate professional and have passive income.

Claiming the $250,000 Exclusion When Your Name Is Not on the Deed

What happens when you sell your personal residence but your name is not on the deed? Does this rob you of the $250,000 exclusion? And who gets the 1099-S? Not you, for sure.

Inflation Alert: Consider Investing in TIPS

Inflation can make you think of inflation hedges such as Treasury Inflation-Protected Securities (TIPS), discussed in this article. With this investment, you could receive inflation adjustments in your favor without the risk of losing your original investment.

How to Switch from the Mileage-Rate to the Actual-Expense Method

Are you currently using IRS mileage rates to deduct your business vehicle? Is that the right choice for you? If not, you will be happy to know that you can switch to the actual-expense method. The IRS gives you two ways, depending on when you want to make the switch.

Spousal IRAs: What You Need to Know

The spouse with no taxable income might be able to make contributions to a traditional, non-deductible, or Roth IRA. Of course, you need taxable income to qualify, but spouses can use joint income.

Maximize Profits and Defer Taxes with an Installment Sale

Seller-financed installment sales offer many benefits for the seller, including deferring taxes on the sales gain while allowing for top sales price and flexible terms. But this is tax law, and as you would expect, the IRS imposes a number of rules and restrictions on the installment method.

July 2022

When Your Income Is Subject to Self-Employment Taxes

If you have self-employment income, you pay self-employment taxes (Social Security and Medicare taxes) on your net self-employment earnings. Not all income is self-employment income and some surprising types of income are considered self-employment income, as explained in this article.

C Corporation? Beware of the Hidden Tax

Are you loving the 21 percent corporate tax rate and now keeping more money inside the corporation? If so, beware of the accumulated earnings tax. You can easily overlook it. You likely don’t have the proper documentation to avoid it. And it’s expensive.

When Partners and LLC Members Don’t Pay Self-Employment Taxes

If you’re a partner in a partnership or an LLC member, do you have to pay self-employment tax on your business profits? It depends. Some partners and members can avoid paying such taxes, but the rules are not always clear. You can generally avoid self-employment tax only if you’re not actively involved in the partnership or LLC business.

Self-Employment: Quick and Dirty Guide to Tax Issues and Savings

If you’re thinking of becoming self-employed or recently took the plunge, this article is for you. One of the first things you need to consider is the self-employment tax, which starts almost immediately. And the second thing you need to consider is how to reduce your taxes. You will find good ideas in this article.

Cut Employment Taxes with the S Corporation

Do you report your business on Schedule C of your Form 1040? Have you noticed that the self-employment tax significantly drains your cash? As we explain in this article, the S corporation may plug a good chunk of that leak.

How Will You Deal with the New 62.5 Cents Mileage Rate?

Okay, nice, the IRS increased the standard mileage rates for the second half of the year. If you use the three-month sample method for tracking your business mileage, how do you apply that mileage to the different rates? This article will help you with that and offer additional insights.

Q&A: Paying My Daughter: W-2 or 1099?

There’s much to see in this short question and answer, such as the single-member LLC, sole proprietorship, corporation, payroll taxes, self-employment taxes, and tax-free income.

Best Health Deduction for Solo Owner-Employee of a C Corporation

Many solo owners of C corporations have their corporations reimburse them for health insurance. That’s nice, but as we explain in this article, those solo owner-employees likely can do better.

Avoid This Common First-Year Business Mistake

You have much to consider when starting a business. Newbies make mistakes, some more costly than others. One big part of the tax equation is when does the business start. Although this is often straightforward, it can also be unusual, as seen in this article.

June 2022

Alert: A Massive New FinCEN Filing Requirement Is Coming

The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) has issued proposed regulations showing how it intends to implement the Corporate Transparency Act—a law enacted in 2021 that requires smaller businesses to disclose beneficial owner information to the federal government. FinCEN plans to start enforcing the law as soon as mid-2022, and it will affect as many as 30 million new and existing smaller businesses.

The IRS Wants to Know about Your Crypto

All taxpayers must answer a question on Form 1040 about cryptocurrency. Unfortunately, it’s a trick question. You can engage in many types of crypto transactions without having to answer “yes” to the question. If you answered the question wrong, you don’t have to amend your return unless you failed to report crypto income.

PDF Download: Tax Strategies for Vacation and Second Homes

If you own a second home and have both personal and rental use of that home, the tax code treats it as a tax-defined vacation home regardless of its location in the city or at the beach. Of course, you could use it solely or partly for business lodging and avoid the vacation home rules. With a second home, you have many tax strategies to consider.

Increase Your Tax Deductions Using the Business-Mileage Rule

Pay attention to the rules on what makes a business mile and what makes a personal mile, so you can achieve the best possible vehicle deductions.

Change Independent Contractors into Employees Trouble-Free

The IRS rewards business owners who are proactive in fixing their worker classification mistakes using the Voluntary Classification Settlement Program (VCSP). With this program, you can correctly classify your workers at a minimal cost and without the risk of an employment tax audit.

Are Self-Directed IRAs for Real Estate a Good Idea? Maybe Not (Part 1)

Holding real estate in a self-directed IRA can help diversify your retirement investments, but it can come at a hefty price, including crippling prohibited transaction rules and the loss of valuable real estate tax deductions.

Tax-Deductible Cruise Ship Travel to Mexico

You may not have thought of this, but taking a cruise ship to Mexico for a business meeting is acceptable as a deductible form of transportation.

Are Self-Directed IRAs for Real Estate a Good Idea? Maybe Not (Part 2)

Buying real estate with a self-directed IRA may sound great, but it can be hard to get financing—and if you do finance the property, your IRA could be subject to unrelated business income taxes during its operations and at the time of sale. You also need cash reserves for operations and to pay out minimum distributions when you hit retirement age.

Starbucks Gift Cards for Business Promotion

Making gifts to promote your business is complicated by time, inflation, and poor tax legislation. Make sure you know the rules so that you keep your tax deductions on your tax return.