May 2023
Tax Credits for Electric Vehicles: The Latest from the IRS
With the release of new IRS regulations, the many restrictions on the clean vehicle tax credit for electric vehicles (EVs) take full effect. As a result, only 22 EVs qualified for the clean vehicle tax credit as of April 18, 2023, although this number will likely grow during the year. But the tax rules give you some other ways to claim a federal tax credit for an EV, such as by leasing an EV, buying a used EV, or claiming the commercial clean vehicle credit for business-use EVs.
Uncertain Tax Position? File Form 8275 to Avoid Penalties
The IRS imposes a 20 percent penalty if you underpay your taxes by the greater of $5,000 or 10 percent. But you can avoid this penalty completely by filing IRS Form 8275 and adequately disclosing the item or tax position the IRS might later disallow. To obtain such relief, you need show only a reasonable basis for your position—not a high bar.
One Ugly Rule for Owners of S Corporations Deducting Health Insurance
Is it possible for an S corporation to pick up, say, the $21,000 tab for the more-than-2-percent shareholder’s family health insurance—and put that in box 1 of the shareholder’s W-2 as wages—but for the shareholder to get a zero deduction on Form 1040, Schedule 1, line 17? Yes, this can happen when an ugly rule comes into play.
Travel to a Fancy Resort Hotel Where You Use Your Laptop for CE
Discover an innovative continuing education opportunity that combines learning with a luxurious resort experience. This unique event, held at a five-star resort, allows participants to earn business-related education credits and potentially enjoy tax deductions for travel and meals.
Six Answers for Small and Solo Businesses about Health Insurance
Small and solo business owners face some tricky yet often rewarding rules when it comes to business tax deductions for health insurance and other medical expenses. In this article, you’ll find answers to six questions that will help you along the path to your rightful business deductions.
Estate Planning for the Rest of Us
Estate planning is essential for everyone, regardless of wealth. With a will and a living trust, you can ensure your assets are distributed according to your wishes, avoid probate, and maintain your financial privacy. Remember to regularly review and update your estate plan to accommodate life changes and fluctuating tax rules.
Family Loans: Only Path to a Decent Home Loan Interest Rate
Discover how family loans can help homebuyers secure better interest rates. Learn about the applicable federal rate (AFR), the tax implications, and the clever loopholes you can use to avoid complications. Dive into the essential steps for proper documentation, and secure your relative’s chance to claim valuable deductions on their home loan.
Boost Tax Planning with a Phaseouts Desktop Reference
Understanding phaseouts helps you create more efficient tax planning strategies, as they provide crucial information on the income limits for various tax benefits based on your filing status. With this knowledge, you can make informed decisions on how to allocate your income and investments to minimize your tax liability and maximize your after-tax benefits.
April 2023
NFTs and Taxes: New Rules and What You Need to Know
NFTs—short for “non-fungible tokens”—are one of the hottest types of digital assets. Unlike Bitcoin, they are not digital currency. Instead, they represent ownership of virtual or physical assets. NFTs can be bought and sold on online platforms. Such sales result in ordinary income for NFT creators. Purchasers face the collectibles rules if the NFTs are collectibles and the owner can recognize capital gains or losses both on initial purchase and later sales.
If I Hire My Kids, Can I Give Them Tax-Free Education Benefits?
Owning your business has many advantages, including the possible ability to get some tax deductions when you have your business pay for your child’s education—in select circumstances, as we explain in this article.
Eight Answers to Section 105-HRA Questions
The Section 105 medical reimbursement plan can be confusing, and you want to get it right. To help, we answer eight common questions in this article, including what documentation to use, where to file for the deduction, how many work hours are needed to justify the reimbursement, who needs to create the plan, whether it will work with an S corporation, and more.
PDF Guide: Four Powerful Tax Strategies for Charitable Giving
Charitable contributions not only support great causes but can also reduce your taxes. Download this guide to read up on four often overlooked tax strategies for maximizing your tax savings with charitable contributions.
Business Gym for Your Employees, and Maybe You Too
Looking to add a business gym? This should be straightforward, but not so. There are two different tax code sections that could apply. If you are thinking of a gym for your business, this article advises how to make your deduction possible by keeping you from using the wrong set of IRS regulations.
Don’t Expose Yourself with Improper Use of the $75 Rule
Confused about when you need a receipt for a business expense? The rules can be tricky. Don’t risk getting it wrong. Here’s what you need to know about the $75 receipt rule.
Revitalize Your Understanding: Guide to Bad Debt Loss Deductions
When you make a loan and that loan goes bad, your tax deduction for that lost money could be either a capital loss subject to the dreaded $3,000 cap or an ordinary loss that’s fully deductible. You want to get this right, and this article puts you on the right path.
Take Advantage of the Once-in-a-Lifetime IRA-to-HSA Rollover
Health savings accounts (HSAs) are the best retirement account ever invented. You can help fund your HSA by making a once-in-a-lifetime rollover of money from your IRA. No tax need be paid on the rollover. Thus, if you later withdraw the funds from your HSA for medical expenses, you’ll never pay taxes on them. The only drawback is that the rollover amount is limited to your HSA contribution limit for the year. But hey, tax-free is free.
March 2023
Helicopter View of 2023 Meals and Entertainment
As with much of life today, tax rules keep changing. Accordingly, in this article, we have a new helicopter view of meals and entertainment for 2023.
Download This PDF with the Common Foreign Reporting Forms
If you engage in any interactions with foreign entities or conduct foreign transactions, it is highly probable that you will be required to file tax and other forms. Failure to do so can result in severe penalties. To obtain a comprehensive understanding of the necessary forms, download the Common Foreign Reporting Forms PDF.
Avoid This Family Member S Corporation Health Insurance Mistake
If you own more than 2 percent of an S corporation, you have to follow special rules to deduct your health insurance premiums. These demanding 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 these rules be a surprise and cost your family money.
Retirement Account Early Withdrawal Penalties: Avoid Them
Money in IRAs and other retirement accounts is not supposed to be withdrawn until you reach age 59 1/2. Early withdrawals are subject to a 10 percent penalty tax in addition to regular income tax in the case of tax-deferred accounts. But if you need to get your hands on your retirement money sooner, there are several ways to do so without incurring the penalty.
SECURE 2.0 Adds New Escapes from the 10% Early Withdrawal Penalty
The SECURE Act 2.0 adds several new exceptions to the 10 percent penalty on withdrawals from retirement accounts before age 59 1/2. These include emergencies, terminal illness, domestic abuse, and disasters.
Minimize (or Eliminate) Taxes When Selling Your Rental Property
Selling your rental property can result in a substantial tax bill. To assist you with this situation, we have developed a guide that presents a variety of tax strategies that can be employed to minimize, and in certain circumstances eliminate, these taxes. You can download this guide and explore the various strategies it contains.
Holding Real Property in a Corporation: Good or Bad Idea?
Typically, it is not advisable for a corporation to possess real estate. The most favorable entities for real property ownership are the single-member LLC, the husband-and-wife LLC, and the grantor trust. But there is one exception to this rule, as we explain in this article.
Are You a Regular Investor or a Tax-Favored Securities Trader?
If your securities trading activity can rise to that of a tax-favored trader, you can benefit in multiple ways as discussed in this article. For example, with the mark-to-market election, you can deduct your tax losses without running into the $3,000 ceiling.
It’s Tax Filing Season Again—Avoid the Post Office
If you have to paper file a document with the IRS, what happens if that document never reaches the intended recipient? You have, as they say on the farm, stepped in it. Here’s how to make sure you don’t suffer that fate.
February 2023
2023 Health Insurance for S Corporation Owners: An Update
IRS Notice 2015-17 permits S corporations to escape the $100-a-day penalties on reimbursements they make to more-than-2-percent shareholder-employees for individually purchased health insurance.
Build Net Worth 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.
The SECURE 2.0 Act Creates New Tax Strategies for RMDs
If you have a traditional IRA or other tax-deferred retirement account, the federal government wants you to pay taxes on that money before you die. That why the feds created “required minimum distributions” (RMDs) that are based on your age and mortality tables. The recently enacted SECURE 2.0 Act allows taxpayers to wait longer to start taking their RMDs. And, the new law also reduces the penalties for failing to take RMDs.
IRS Proposes Tax Deductions for Health Care Sharing Ministries
When looking for tax law guidance from proposed regulations, be alert. If the regulations are not effective until finalized as is the case for health care sharing ministries, you could go down the wrong path and find yourself in trouble.
Desktop Reference Download: Taxpayer Penalties—2023
Lawmakers create tax penalties to help ensure compliance with the federal income tax system. You may want this handy two-page PDF on your desktop because it gives you a quick reference to the penalties, penalty amounts, and tax code sections that create the penalties.
Plan Your Passive Activity Losses for Tax-Deduction Relevance
The tax law’s passive-loss rules are pretty much the grim reaper of current-year tax benefits from your rental properties. Note the words “current year.” Those passive losses trapped this year are available down the road. With planning, you might be able to release those trapped tax benefits when you want.
Download Your New 2023 Desktop Reference Guide Now
Download this two-page guide so that you have a handy desktop reference for the 2023 corporate and individual tax rates, estate tax rates, self-employed tax rates, Social Security and Medicare tax rates, capital gains rates, standard mileage rates, standard deductions, luxury auto depreciation limits, and select retirement and IRA limits.
Tractors, Antique or Not, Are Deductible
How many tractors does a farm need? Could it need 46 tractors? The IRS said no, but this taxpayer took the IRS to court and won on the tractor issue.
PDF Download: The Five Most-Read Articles of 2022
Of the dozens and dozens of tax-saving articles published by the Bradford Tax Institute in 2022, there were five that stuck out. Download this PDF to capture the five articles in one document.