By month: May 2010
Prepaying expenses has been a most overlooked tax planning strategy because it is misunderstood. Proper use of the new safe-harbor prepayment rules can guarantee the prepayment deduction. Continued use of prepayments combined with strong investment returns can produce a nice addition to your net worth.
The tax strategy of renting property you own personally to your businesses needs your attention if you want tax benefits. Similarly, special recharacterization rules apply to rentals of land and also when land is a big part of the rental.
The U.S. tax system is kind to proprietors and corporations that lose money in their businesses. The losses can be carried back and forward, but you must pay strict attention to the elections and due dates to ensure your benefits.
The first good news is that you can be both real estate investor and real estate dealer with respect to your real estate portfolio. The next good news is that you are in control, and by knowing just a few rules about dealer and investor classification, you can do much to increase your net worth.
Poor planning for the S corporation owner’s business expenses can cost the owner every penny of his deductions.
It’s true, you don’t need a receipt for an entertainment expense that costs less than $75. But you may need to prove that you had the cash available for the entertainment.
You always come out ahead when you can deduct your charity involvement as a business expense.