July 2024
Claim Up to $32,220 in Missed 2021 Self-Employed COVID-19 Sick and Family Leave Credits Today
Individuals and partners who were self-employed during 2021 were entitled to claim refundable tax credits for sick and family leave if they were unable to work for various COVID-19-related reasons, such as suffering from COVID itself, getting vaccinated, being under quarantine, or looking after family members impacted by the virus. Those who failed to claim the credits with their 2021 tax return need to read this article. The credits can be worth up to $32,220.
1099s for Corporations and Other 1099 Surprises
Curious about when you need to issue a Form 1099 to a corporation? Discover the surprising details and specific reporting requirements for incorporated legal, medical, and other professional services.
Discover the Best Entity for Your Business: Use This Chart
Use this essential Entity Comparison Chart to find the right business entity. It simplifies complex information and highlights key advantages and disadvantages to help you make an informed decision and optimize your business’s financial health!
Know the 15 Exceptions to the 10 Percent Penalty on Early IRA Withdrawals
Early IRA withdrawals—those that occur before age 59 1/2—are generally subject to a 10 percent penalty tax, but 15 exceptions exist to avoid this penalty. The exceptions include withdrawals for substantially equal periodic payments, certain medical expenses, higher education costs, first-time home purchases, and specific emergencies or life events such as disability or terminal illness.
Make Sure Your Real Estate Options Pay Off
You may have heard that options are the perfect way to increase profits on real estate investments and rentals. Well, perfect is probably an overstatement, but good profits are available when you know what you are doing. You also need to know the tax rules to avoid any clauses, charges, and events that can turn options into sales—and trigger taxes when you least expect them.
Tax Deductions for Investments in Raw Land
Purchasing raw land is a great way to get into real estate investing. But your tax deductions are more limited than for improved property. Some expenses are deductible as itemized personal deductions; many others aren’t deductible at all. If you don’t itemize, you get no immediate benefit from your deductions. But if you make the proper annual tax election, your taxable profit will be reduced when you ultimately sell the property.
Deduct 100 Percent or 81 Percent of This Entertainment Facility?
When you qualify to deduct an entertainment facility as a business expense, how do you determine the amount to deduct?
Create Biz Deductions for Your Timeshare—Allow Use by Employees
You have two possible ways to let an employee use your timeshare, one of which is tax-free to the employee. The second method is to call use of the timeshare “compensation” to the employee, which produces the unusual result of taxable income to the employee in an amount often different from the tax deduction for the business.
Shutting Down Your S Corporation
Shutting down your S corporation? Discover the tax implications of selling your stock versus liquidating assets, and learn key strategies to minimize your tax burden. Read this article to unlock expert strategies that help you navigate this complex process with complete confidence.
June 2024
Q&A: Dutch-Treat Business Meals
You can deduct the cost of Dutch-treat business meals in the same manner you deduct other business meals. But all business meals you consume can suffer from the Sutter rule. Learn more here.
Cost Segregation: A Great Strategy When?
Residential rental property is depreciated over 27.5 years, and non-residential real property over 39 years, providing a relatively small deduction each year. But property owners can use cost segregation to speed up the deductions by separately identifying, valuing, and depreciating the personal property and land improvements contained in their property. This can provide a substantial deduction in the first year, especially if bonus depreciation and/or Section 179 is used to deduct the full cost of these assets in one year.
Shutting Down a Sole Proprietorship
When shutting down a sole proprietorship or a single-member LLC taxed as a sole proprietorship, there are myriad tax rules to consider because the tax code says you are not selling the business, but rather selling the assets of the business.
Q&A: Who Should Own the Business Car: Corporation or Individual?
Here’s a common question: Who should own the business vehicle? You? Your corporation? If you just formed your corporation, it’s likely that the vehicle is in your name. How does your corporation deal with it? This article gives you answers.
Q&A: Don’t Rent Home Office to S Corporation
One common mistake the corporate owner makes is renting the corporate office in the personal home to the corporation. Learn why this is a mistake.
Adding Clarity: Replace Roof, Write Off the Old Roof
Find additional clarity on how you benefit when you take advantage of the relatively new IRS tangible property regulations that allow you to write off replaced components. In this article, we expand on the benefits of the two types of tax savings that we covered in last month’s article.
Self-Employment Taxes for Active Limited Partners
The tax code says that limited partners “as such” don’t have to pay self-employment tax on their share of partnership income—a substantial tax savings. For the first time, the U.S. Tax Court has held that this exception applies only to limited partners who are passive investors, not active participants in the partnership business.
Tax Guide to Timeshare Tax Deductions When You Rent It to Others
Your timeshare can easily qualify as a second home for the mortgage interest deduction if you don’t rent or attempt to rent it. Once you introduce rent into your timeshare equation, you trigger two tough rules: (1) a special mortgage-interest-deduction rule for the personal part of the timeshare, and (2) the dreaded vacation-home rental rules for the rental part.
Q&A: How the IRS Disappears Tax Refunds on Unfiled Tax Returns
The taxpayer in this article did not file tax returns for 10 years. During this time, he overpaid his taxes by at least $100,000. The good news is that he does not owe any interest or penalties. But there’s some really bad news, too.
May 2024
Do You Need to Amend Your 2020 Tax Return for the 2020 ERC?
The time for individuals, including single-member LLCs taxed as sole proprietors, to get the 2020 Employee Retention Credit correct is here. And this is true even if you have applied for but not yet received the credit. For corporations and partnerships, the time may be past, but this article sheds light on what you need to know.
CPA Steals the Payroll Taxes, Owner Has to Pay the IRS
Who does your payroll? Could they embezzle the payroll taxes? What does the IRS do to you if someone embezzles your payroll? To find out, make sure you read this article.
Rental Property, Often Missed: Add New Roof, Deduct the Old One
Get ready to thank the IRS. With the relatively new tangible property regulations, you can write off replaced components and achieve two types of tax savings.
Tax Guide to Deducting Your Timeshare Stays as Business Lodging Costs
Could you use your timeshare for business lodging and other business purposes? If so, why should you consider it? Business deductions usually produce the best tax benefits, that’s why. Further, you need to know the special tax rules that can make your timeshare a rental property, personal residence, or business lodging facility.
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: No Business Income, No Home-Office Deduction: Wrong
If you have no taxable income, should you file a tax return and claim the office-in-the-home tax deduction? Answer: Yes. Even with no taxable income, you have two for-sure tax benefits from the home office, and you likely have a third benefit, as we explain.
Shutting Down a Partnership: Tax Implications
There is much you need to know when you shut down a partnership. In this article, we walk you through the tax consequences using the three most common partnership shutdown scenarios.
Did You Overfund a Section 529 Plan? Consider a Roth IRA Rollover
If you establish a Section 529 college savings plan for a child or other family member and he or she doesn’t use all the money or decides not to go to college at all, starting in 2024 you can roll over up to $35,000 of the money into a Roth IRA for the beneficiary. But such rollovers are subject to complex rules and require long-term planning, as we explain in this article.
April 2024
BOI Reporting Unconstitutional for 65,000, but Likely Not You
You are likely on the hook to file your BOI report. The Corporate Transparency Act has been declared unconstitutional by a federal district court in Alabama, but that only applies to 65,000 businesses. Meanwhile, New York State has adopted its own beneficial ownership information reporting law that applies to limited liability companies.
Updated Blueprint for Employee-Spouse 105-HRA (Health Reimbursement Arrangement)
The 105-HRA is the medical reimbursement plan you likely want to use if (a) you report your business income and expenses on Schedule C, E, or F of your Form 1040, and (b) you can make your spouse your one and only eligible employee. Also, if you are single and operate your business as a C corporation, and if you are the one and only eligible employee of your C corporation, the 105-HRA is the medical reimbursement plan for you.
Tax Quiz—Sell Stock at a Loss to Your Daughter
What happens when you sell stock or other assets at a loss to a related party, such as your daughter? This is a tax law you need to know about.
Create Tax-Free Fringe Benefit Deductions for Your Smartphone
Do you operate your business as a corporation, a partnership, or a proprietorship, or as an LLC taxed as one of these three entities? Your choice of entity impacts whether you can create a no-hassle, tax-free fringe benefit for you and/or your employees’ smartphones. In this article, you learn the rules that apply and which ones give you the best benefits.
Five Rules for Turning Your Vacation—Even a Luxurious One—into Tax-Deductible Business Travel
The next time you plan a vacation, stop and think about how you could make it deductible. If you find a good business reason to visit that destination and you throw in enough business hours on the trip, you suddenly convert a non-deductible personal trip into a deductible business expense.
Despite Its High Cost, This Education Is Deductible
If you attend an expensive educational program, do you have to amortize the cost, or can you expense it? Further, would such a program trigger an IRS audit?
Tax Reform Doubles Down on S Corporation Reasonable Compensation
The Tax Cuts and Jobs Act tax reform gave you a new 20 percent deduction on pass-through income. For S corporation owners, your reasonable compensation plays a key role in determining your Section 199A deduction. Here, we’ll explain what the law says on reasonable compensation and how you can come out ahead.
Tax Rules for Providing Free Meals and/or Lodging to Employees
The tax rules on free meals for employees have changed to create more revenue for the government and fewer fringe benefits for employees. The big change for meals is the drop in the employer deduction, from 100 percent before 2018 to 50 percent for years 2018-2025 to zero in 2026 and beyond.
