Recent Feature Headlines

May 2022

IRS Says Your Independent Contractors Are Employees: Use the CSP

The IRS Classification Settlement Program (CSP) offers a chance to settle your employment tax debt due to worker misclassification if you do not qualify for Section 530 relief. CSP agreements typically result in a substantial reduction of assessed employment taxes, especially if you misclassified workers over several years.

Donor-Advised Funds: A Tax Planning Tool for Church and Charity Donations

If you give money to your church and/or other 501(c)(3) organizations, you should consider establishing an account with a donor-advised fund to increase your tax benefit possibilities. It’s easy to do and gives you an immediate charitable deduction—even when you have the fund distribute the money years later.

How Rental Property Owners Can Avoid the Net Investment Income Tax

If you earn profits from rental property and your income is high enough, you pay the 3.8 percent net investment income tax (think surtax on high income) unless you can qualify for one of three exemptions, as we explain in this article.

$75 Receipt Rule for Business Vehicles

Under tax law, your business vehicle is considered “listed property.” The IRS has a regulation that applies the $75 receipt rule to listed property.

Is Now the Time to Transfer Your Home to Your Adult Child?

With today’s home prices and the crazy real estate market, it’s likely difficult for your children to buy a home. And it’s conceivable that you are ready to move on from your existing home. If this is true, this might be the right time to transfer your home to your child, as we explain in this article.

Tax Code Enables Embezzler’s Win, Victim’s Loss

This taxpayer embezzled money from his employer, got caught, and died in jail. Before he died, the embezzler sent the embezzled money to the IRS as an estimated tax payment. Read why the company can’t get their stolen money back once the thief paid the money to the IRS in taxes.

Selling Your Highly Appreciated Vacation Home? What About Taxes?

If you sell a home that you used for both personal and rental purposes, you are selling a tax-code-defined vacation home. Special rules apply to any gain or loss, as you will see in this article.

IRS Examiner Gives 80 Percent

During an audit, IRS examiners can use their judgment to allow or disallow pretty much whatever they want. In this first stage of the audit process, the burden of proof is on you.

Home-Office Deduction If You Operate as a Corporation

The IRS audit manual states: “If you rent all or part of your residence to your employer and use the rented portion when performing services for the employer, you cannot deduct home-office expenses attributable to the rental.” Thus, forget the rental to the corporation, and instead use the corporate-reimbursement-to-the-employee strategy for maximum benefits.

April 2022

Health Savings Accounts: The Ultimate Retirement Account

A Health Savings Account (HSA) can be the best retirement account of all because it offers triple tax benefits: (1) deductible contributions, (2) tax-free growth, and (3) tax-free withdrawals for medical expenses. No other tax-advantaged account gives you all three.

Tax Pros and Cons: Partnership with Multiple Partners

If you are going to operate a business with multiple owners, you need to consider the partnership in addition to considering the S and C corporations. The partnership generates both advantages and disadvantages. This article guides you through the many things you need to consider.

PDF Download: Tax-Smart Strategies to Pay for College

College is expensive. Luckily, tax law has provisions to help you cover the costs, including Coverdell, Section 529 savings, and Section 529 tuition plans. Of course, there’s more, including tax strategies that benefit both you and your child, as you will learn in this guide.

Avoid This Payroll Tax Nightmare

If you are involved in a financial sense with a taxpayer and that taxpayer has a payroll tax problem, be aware that the situation could become your problem, as it did for Mr. Kazmi in this instance.

It’s Tax Filing Season—Mail Correctly to Avoid IRS Trouble

If you need to file a document with the IRS by a specific deadline, don’t rely on regular U.S. mail. Instead, use certified or registered mail or an IRS-approved private delivery service. This way, your document will be deemed filed on the postmark date even if the IRS loses the document or claims that it never received the document.

Tax Issues When Your Vacation Home Is a Rental Property

Under the vacation home rules, your vacation home is classified as either a personal residence or a rental property. This article guides you through the rules that apply to the vacation home that’s classified as a rental property.

Grouping: Tax Strategy for Owners of Multiple Businesses

Revenue Procedure 2010-13 requires disclosure of the business and rental groups you form to avoid the disallowance of losses under the passive-loss rules. At first glance, you might say, “Oh, no, not more disclosures.” But further examination shows an audit-proofing aspect to this disclosure that is most appealing.

Deducting Mortgage Interest When Your Name Is Not on the Deed

What happens if you live in a house and make mortgage payments, but someone else owns the property? Can you still get a tax benefit? Absolutely! By proving that you have legal or equitable title to the property, you can deduct up to 100 percent of the mortgage interest you pay. For Sue Davis, this generated an extra $18,000 per year of deductions she did not know she could claim.

March 2022

Vacation Home Rental—What’s Best for You: Schedule C or E?

How you operate your rental property is important. For example, with services, you can create a Schedule C rental property. That can be good or bad. Learn why.

Entertainment Facility: Perk for You, Your Net Worth, and Your Employees

The Tax Cuts and Jobs Act tax reform crushed a big chunk of business entertainment tax deductions. Fortunately, your business entertainment facility escaped the mayhem and continues as a 100 percent tax-deductible facility. If you own (or want to own) such a business facility, make sure to review the rules in this article.

In This PDF Download Find Dozens of Hidden Home Sale Tax Breaks

Tax law gives you the opportunity to legally shelter up to $250,000 of gains ($500,000, if married) when you sell your home. You may know the basic rule on this, but there’s so much more as you find in this PDF download.

Avoid the Self-Rental Trap

Qualify for a special election that allows you to treat your rental and your business as one activity for federal tax purposes. This can give you the best of both worlds: (1) legal protection and (2) a tax shelter.

Tax Implications of Investing in Precious Metal Assets

At first blush, our beloved Internal Revenue Code appears to throw cold water on the idea of holding physical precious metal assets in an IRA. But as you will learn in this article, the tax code contains exceptions and alternatives that allow you to invest your IRA money in precious metals, both directly and indirectly.

New Hope for Restoring and Fixing the Employee Retention Credit

If you suffered from the repeal of the Employee Retention Credit (ERC) for the fourth quarter of 2021 and/or suffered from IRS Notice 2021-49 and its disallowance of the ERC on wages paid to the corporate owner-employee, you now have hope that one or both of these problems can be solved in your favor.

Download Your New 2022 Desktop Reference Guide Now

Download this two-page guide so that you have a handy desktop reference with the 2022 corporate and individual tax rates, estate tax rates, self-employed tax rates, Social Security and Medicare tax rates, capital gain rates, standard mileage rates, standard deductions, luxury auto depreciation limits, and select retirement and IRA limits.

IRAs for Kids

Does your child receive a W-2? If so, he or she should contribute to an IRA (preferably a Roth IRA), as we explain in this article.

Tax Treatment of Employer-Provided Meals: What’s New?

For decades, you have been able to provide employers with free meals as a tax-free fringe benefit. But with on-demand meal delivery available to most workplaces today, is this about to change?

February 2022

Owe Taxes for Misclassified Workers? Section 530 to the Rescue!

The Section 530 safe-harbor provisions allow employers to avoid penalties, if certain tests are met, on workers improperly classified as independent contractors. The employer must have filed all appropriate federal tax returns, treated similar employees consistently, and had a reasonable basis for classifying the individuals as independent contractors.

Big Tax Break: Qualified Improvement Property

If you own or lease non-residential real property you use in your business, interior improvements you make to the property may be fully deductible in a single year instead of multiple years. But to be deducted so quickly, the improvements must meet the tax law definition of “qualified improvement property.”

Three More Answers on “Paying for College—A Handy-Dandy Strategy”

Let’s say you have your business pay your college student $23,255 for a one-time project. As you know from Paying for College—a Handy-Dandy Strategy, the payment is not self-employment income for the student. But what Form 1099 do you use to report the income? Why does tax preparation software try to apply the kiddie tax to this payment? Does the one-time payment mean the student can contribute to an IRA?

Using a Reverse Mortgage as a Tax Planning Tool

When you think of the reverse mortgage, you may not think of using it as a tax planning tool. But as you learn in this article, the reverse mortgage can save you a boatload of taxes when used in the right circumstances.

Two Answers about Selling Your Home to Your S Corporation

This article answers two questions: First, if a married couple sells their home to their S corporation to be a rental property, can the owners be the renters? Second, where does the S corporation obtain S corporation basis in this transaction?

Don’t Rob Yourself of the Home Internet Deduction

If you do some work at home, you’re probably using your home internet connection. Are your monthly internet expenses deductible? Maybe. Home internet expenses can be deducted by business owners in the same way as home utility costs. But a lack of good records can booby-trap this deduction.

Q&A on Medicare Health Insurance Premiums and Taxes

Taxable income has consequences. It causes income taxes. And it causes you to pay either more or less for Medicare. It boils down to this: there’s always a need to reduce your taxable income.

PDF Download: Retirement Plans for Business Owners with No Employees

As a business owner, you need to decide which of the many retirement plans provide you with the most benefit. Our guide explains each of the plans so you can make an informed decision as to which retirement plan fits best for you.