By month: July 2018
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.