An unprecedented nationwide moratorium on evictions for non-payment of rent is in place through the end of 2020 (and for even longer in some states). But landlords may still be able to evict some problem tenants, and even sue for overdue rent. Other options include entering into payment plans with struggling tenants, seeking forbearance from lenders, and obtaining low-interest SBA loans. That’s the practical problem—and then you have the tax issues. Rental losses may or may not be deductible against non-rental income, subject to complex passive loss rules, as we explain here.
Following a presidential executive order, the IRS says employers can stop withholding and paying employee Social Security taxes for the rest of 2020. But employers who do so face potential risks. Do employers have to accept the offer?
Are you starting or buying a new business? If so, you have a decision to make regarding the best operating entity for this business. Choose wisely, and you will benefit in many ways, including possible huge tax savings. Choose the wrong entity, and you’ll feel the pain for years to come.
Have you set your S corporation salary so you can save on payroll taxes? If so, are you using one of the three approaches to establishing that salary that are contained in the “Reasonable Compensation Job Aid for IRS Valuation Professionals”? You should be.
Do you have a mileage log that will survive an IRS audit? If so, good for you! If not, get ready to give up all (not some, but all) of your vehicle tax deductions for not just one year but three years, as you will see in this true story.
Three questions for you: (1) Can you use part of one room as a deductible home office? (2) How about a dozen full-sized rooms? (3) Can you deduct the portion of your home that you use for storage of your business records? Find the answers here.
Do you operate your business as a corporation but use a vehicle that you own in your personal name for the corporate business? If so, be aware that the TCJA changed the rules of the road for tax years 2018-2025. To avoid losing your rightful deductions, you need to have the corporation reimburse you for business use, as we describe here.
The Setting Every Community Up for Retirement Enhancement Act (SECURE Act) passed last December makes a big change in the stretch IRA—an estate planning device favored by well-off IRA holders. To cope with the downside of this new law, you need to do some planning, as we explain.
Forgivable Payroll Protection Program (PPP) loans are over for now, but if your business is still suffering due to the COVID-19 pandemic, you can get up to $150,000 with an SBA Economic Injury Disaster Loan (EIDL). Unlike the PPP loan, the EIDL has no forgiveness possibility. You have to pay off the loan. The interest rate and terms are better than commercial loans, but there are many strings attached to these low-interest EIDLs.
Is a $10,000 antique chair deductible as an ordinary and necessary business expense? Would the tax law deem it a non-deductible lavish and extravagant asset? Good news: it qualifies as an ordinary and necessary depreciable asset, as explained in this article.
The Payroll Protection Program (PPP) rules—they keep a-changin’. In this article, you find new rules that likely increase PPP loan forgiveness for S and C corporation owner-employees with compensation of $100,000 or more.
If you are thinking of moving to a state that levies no personal income taxes, you need to consider all the other taxes, including property, sales, estate, and inheritance. And then, if you decide to make the move, you need to establish your domicile in the new state to decouple yourself from the old state.
Your businesses can borrow up to $150,000 from the Small Business Administration (SBA) with a low-interest Economic Injury Disaster Loan (EIDL). But you and/or your business will be subject to some strict SBA requirements for SBA permission before making changes to your business or distributing its assets. You’ll also have to keep extensive records, and you may have to pledge all your business assts (other than real estate) as collateral.
Your claim to Section 179 expensing comes with strings. You make a deal with the government to keep your business use above 50 percent during the depreciation periods for the assets that you expensed. If you violate your agreement, and depending on when you do that, the government can show up and recapture a big chunk of your Section 179 expensing.
If you or your corporation is unlucky enough to face an IRS audit, there is one record that stands out as critical to your audit health. If you are missing this one record, the IRS examiner knows that he or she should quickly expand to other areas of your tax return.
The Tax Cuts and Jobs Act (TCJA) tax reform gives you bonus depreciation as a method for deducting 100 percent of the cost of certain business assets. You also have the de minimis safe harbor for certain assets costing $2,500 or less ($5,000 or less with the applicable financial statement). And finally, the TCJA tax reform enhanced the Section 179 deduction. Which is the best choice for you?
Do you operate your business as a corporation but own your business vehicle personally? If yes, what happens when you trade your existing personal vehicle for a replacement personal vehicle and then have the corporation reimburse you for the newly purchased personal vehicle? There are nuances that you need to know, as we explain in this article.
Self-employed? Your Payroll Protection Program (PPP) payroll is your 2019 Schedule C net profit. Partnership? Your PPP payroll is the adjusted self-employment income of the partners. S or C corporation owner, your W-2 is your income. Why know this? So you can apply for your PPP cash infusion as we explain in this article.
When it comes to the Payroll Protection Program monies, there are some flies in the ointment when it comes to forgiveness. The first fly is that when the loan is forgiven, the business expenses paid with the forgiven money are not deductible. The second fly is that the unforgiven expense rule discriminates against S and C corporations. So it’s time for you to kill flies, as you learn in this article.
With the COVID-19 experience, you and your partners may be doing a lot of work from home or even working from home primarily. Is the home-office deduction in the mix? If so, because you are a partner, your options for getting a tax benefit for your home-office deductions are tricky. But no worries, we’ll tell you about the two options to use and two options to avoid.
Do you work from home? Whether or not you have a deductible office in the home, the assets such as desks and chairs that you use for business are deductible—and are often overlooked as business deductions. For example, what happens when you convert a personal asset to a business asset? Does the personal taint last forever? You will like the answers you find in this article.
Tax law definitions do not apply to much of the Payroll Protection Program, making it new ground for owners of S corporations. Here are answers to four questions of concern to many S corporation owners.
When you choose the LLC as an operating entity, you encounter special rules. Let’s start with the fact that the LLC does not exist as a taxable entity but instead falls into one of the traditional categories such as a proprietorship, a partnership, an S corporation, or a C corporation depending on what you elect or don’t elect.
If you report your business income and expenses on Schedule C of your Form 1040, your PPP loan forgiveness is straightforward, as you see in the five answers in this article.
Learn how renting out your home while you take a two-month vacation interacts with your ability to use the $500,000 home-sale exclusion ($250,000 if single). Remember, you have to use the home as a home for two of the five years before sale to qualify for the home-sale exclusion.
In this article, we offer insights into (1) how good faith at the time of the PPP application works; (2) the differences in the PPP, EIDL advance, and EIDL; (3) the possibility of automatic loan forgiveness without applying for it; and (4) the four categories of owner-employees.
The expression “I’m from the government, and I’m here to help you” is often counted as one of the three great lies. Toss that thinking out the window when you consider the PPP loan forgiveness rules that apply to the self-employed with no employees. For sure, this process is a government help to Schedule C taxpayers who took the time to obtain their PPP cash infusions.
Thanks to new government guidance, we have clarity on how the self-employed and owner-employees treat their PPP loan forgiveness applications. The new PPP rules explain how you identify qualifying PPP compensation for partnerships, corporations, and the self-employed. The new rules also explain when you can apply for forgiveness. Let’s get started.
The COVID-19 pandemic may create tax benefit opportunities for you and your family members. For example, you could hire your under-age-18 children, pay them, say, $10,000 each, and they could pay zero federal income taxes. And you or your corporation, the employer, would deduct the $10,000 you paid to each of the children. The child wins. You win. There’s more, as you will see in this article.
New IRS guidance expands the possibilities for what is an adverse COVID-19 impact on you for purposes of taking money out of your retirement accounts and repaying it without penalties. We’ll explain whether you qualify, what your repayment options are, and how you can structure it for the best tax outcome.
COVID-19 has changed our nation’s economics. One big hit has been to the federal deficit. What does this mean to the future of taxes? Will the estate and gift taxes increase? If so, what can you do today? You will find a strong idea in this article.
Most of the personal interest you pay in your financial life is non-deductible. One often overlooked exception is interest you pay to buy investment property, such as stocks. We’ll tell you what to look for, when you can deduct this interest, and how to maximize the deductions.
In the CARES Act, Congress decided to waive all 2020 required minimum distributions (RMDs). What if you already took out your annual RMD before Congress changed the law? The IRS just granted you brand-new mercy to fix the issue, but you need to take action before August 31, 2020.
he IRS delayed most tax payments this year until July 15, 2020. Since many payments are now due on one date, you may face writing a daunting check. We’ll tell you what you need to pay, how to pay it, and how much to pay—and you might be paying too much if you don’t read this article.
The CARES Act provided tax payment relief for employers and self-employed taxpayers. You can defer payment of a portion of your self-employment tax—but do you have to, or can you pay if you have the cash? We’ll give you the answer plus some things to consider when making your decision.