Tax reform under the Tax Cuts and Jobs Act gives you bonus depreciation and favorable rules for converting your personal vehicle and other assets to business use. On the conversion, you can immediately qualify to deduct up to 100 percent of today’s fair market value on your existing personal vehicle.
Cost segregation has always been a valuable strategy in your tax strategy toolkit. And now, thanks to tax reform’s recent changes to bonus depreciation, cost segregation is even better. We’ll show you the value of a cost segregation study post–tax reform, strategies you can use that involve cost segregation, and potential problems to avoid.
As you likely know, you now have two methods for finding the home-office deduction: the actual expense method and the IRS optional safe-harbor method. To make the deduction work at the corporate level, your corporation must reimburse you, the employee, for the deduction. Can the corporation use the IRS method?
The Tax Cuts and Jobs Act (TCJA) has changed the way you can look at the S corporation as a tax planning entity. With the new Section199A deduction in play, the S corporation can help increase or decrease that deduction. To make this easier for you, simply download our new guide and get up to speed on how the S corporation works with the TCJA.
When moving your retirement money to an IRA, you should follow this one rule of thumb. If you fail to follow it, you can face two big problems. First, your check will be shorted by 20 percent. Second, you will be on the search for replacement money.
Tax reform changed the tax treatment of certain self-created intangible property. Does this affect goodwill? We’ll review the tax treatment of goodwill in light of tax reform.
In certain circumstances, a spousal partnership can provide better tax savings than the sole proprietorship and the S corporation. The tax law has an attribution rule that it applies to spouses with passive activities. Does that passive rule kill the spousal partnership strategy?
Congress created the qualified improvement property category in the Tax Cuts and Jobs Act with the idea that you could fully expense such qualified property with bonus depreciation. But Congress made an error in the law, and now you can’t use bonus depreciation for qualified improvement property. Don’t worry—we’ll explain how you might be able to fully expense it anyway.
Passive foreign investment companies, or PFICs, are subject to some of the most complex provisions of the tax law. You may own one and not even know it. In this article, we give you the basic rules so that you know what PFICs are and the different ways you can pay tax on them (yes, you have options!).
You cannot expect IRS auditors and agents to know the tax code and regulations. If you can produce the code or regulations that authorize your deductions, you are miles ahead in your audit.
The Tax Cuts and Jobs Act (TCJA) changed the landscape for a host of business meal and entertainment deductions. For supper money, the TCJA did damage, both short and long term. But the deduction continues in place, albeit damaged, for tax years 2018 through 2025.
The TCJA eliminates your ability to unwind a traditional IRA or other retirement plan transfer to a Roth IRA. This requires a change in your decision making for such transfers.
The Tax Cuts and Jobs Act made several beneficial changes that affect partnerships and their partners and LLCs and their members that are treated as partnerships for tax purposes.
One of our members found an error in our 199A calculator. We thanked the member, fixed the calculator, and made technical corrections to the two articles affected (which we identify in this Q&A).
The days when you could convert your rental property or vacation home to a principal residence and then use the full $250,000/$500,000 home-sale exclusion to avoid taxes are gone. Today’s law requires an allocation that keeps part of your rental as a rental so you have to pay taxes on that rental part.
Twenty years after the Tax Court approved a strategy that grants you extra deductions for your second home, the IRS would like you to forget it ever happened. Even though the case remains current law, you won’t find any mention of this strategy in IRS guidance to taxpayers. Unless you just happened to know old cases—or read this article—you might never have known how you could save thousands in taxes on your second home.
Because of the Tax Cuts and Jobs Act, more businesses are looking at the S corporation election. But you have to make a timely election to get the tax benefits. This article helps you with both a “timely” and a “late” election.
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.
As a small-business owner, you have good odds of someday facing a penalty for late filing and/or late payment of your or your corporation’s taxes. It’s likely you will think that you have to pay the penalties. But as you’ll learn here, when you know the rules of the road, you can travel the IRS mercy path and have those penalties forgiven.
Tax reform changed the rules of the game when choosing your best tax structure. A properly structured spousal partnership could now be your best choice, even over the S corporation in some circumstances. But beware, you need to navigate nuances in the law to do this correctly.
The new and improved Section 179 deduction gives you more ways to take advantage of immediate tax deductions. It’s somewhat like having a flexible tax shelter in your back pocket for when you need it (and also need the property, of course).
You can plan your tax-deductible business life to avoid cold winters and hot summers. To do this, you need to know what a tax home is and where your tax home is located. The good news is that you have just one tax home unless you are one of those rare individuals who has no physical home.
If you are married, operate as a sole proprietor or as a single-member LLC taxed on Schedule C of your Form 1040, and have no employees, you absolutely, positively must consider hiring your spouse and creating the 105-HRA medical reimbursement plan. In this situation, the 105-HRA can cut your taxes without you spending one penny.
If you are thinking of a gym for your employees, this is the article for you. The article keeps you from using the wrong set of IRS regulations. Yep, there two different sets of regulations from two different code sections that could apply.
When it comes to the new 20 percent Section 199A tax deduction, does a spouse in an out-of-favor business taint the Section 199A for you? The good news is no. But because of the multiple businesses, you may have a problem on the taxable income front.
Tax reform went hard after your state and local tax deductions. The reduced deduction for your state income taxes has some states pretty riled up. The IRS is about to issue regulations that conflict with what the states are attempting to do. From your standpoint, count on the IRS winning for the moment, and use the clear planning opportunities you have available to you that will create more deductions for your property taxes.
TCJA Tax Reform Q&A: Does Moving W-2 Income and Employee Business Expenses to Schedule C Increase Taxes?
If you can qualify to move your W-2 income to Schedule C so as to enable those legitimate business expense deductions that you are losing to tax reform, should you do it? Maybe. You need to run the numbers to see if the new Schedule C taxes outweigh the monies you lost by not being able to deduct employee business expenses.
How will you fare with the new Section 199A tax deduction? This article can help you make sure that you realize the 20 percent deduction. It’s simply a tax gift if you qualify. And you can do some planning to help you qualify, but you may have to start now.
Should you deduct your client and business meals in spite of the Tax Cuts and Jobs Act? This article explains why that is what you should do and gives you reasons for doing it.
The tax law has always treated your hobby activities unfairly. Tax reform under the Tax Cuts and Jobs Act made that unfair treatment even worse by preventing you from deducting any business expenses against hobby income. In this article, you see a strategy that can save your bacon on your hobby activity.
Learn how the Tax Cuts and Jobs Act changes the alimony rules and what you need to do at this moment if you are in the process of getting a divorce and paying alimony. If you don’t act quickly, your cost of alimony could double.
Depending on how you operate your business and where it’s located, the federal income tax terms “personal home” and “tax home” can have a big impact on your business vehicle deductions. And then there’s the difference between the federal income tax terms “business travel” and “business transportation” and how one very beneficial rule applies when you are inside the area of your tax home.
If you operate your business as a sole proprietorship, the government takes a big chunk of your profits in the form of self-employment taxes. But there’s good news. With the help of your spouse, you can reduce your self-employment tax bill by using a simple rental strategy.
If you own rental property in your name or in the name of a single-member LLC, you report your rental property income and expenses on Schedule E of your IRS Form 1040. But what happens when you have an expense for which the IRS has not created a line item on the form? No problem—simply insert it as we explain in this article.
Tax reform made it more difficult for you to deduct your legal fees. But don’t worry: the tax law still allows for a full deduction of your legal fees in certain circumstances. We’ll review four ways you can continue to deduct your legal fees after tax reform.