By month: October 2021
The Govt. War against Independent Contractors: A Progress Report
Businesses can save big by hiring independent contractors. But the rules of the road for this worker classification require that you pay attention. Both the feds and the states want the workers classified as employees. Recently, California’s AB 5 tried to make it significantly harder for businesses to hire independent contractors, but lawmakers have since watered down AB 5 in response to widespread complaints by both independent contractors and businesses. Other states started to follow the California example, but then decided not to do so.
Ready, Set, Depreciate
As a business taxpayer, you can write off the cost of business buildings, machines, and other assets. The write-off comes in one of three forms, and for the most part you can select the form that gives you the deduction you desire. But you need to follow certain rules to trigger the write-offs, as we explain in this article.
PDF Download: Guide to Deducting Travel Expenses
Whether you travel out of town for business by car, airplane, or boat, you need tax knowledge to create some tax-deductible personal fun days. (Yep, you read that right.) This free guide clarifies the tax law so you can not only ensure your travel deductions, but also turn some personal days into deductible business travel days.
Refresher: Principal Residence Gain Exclusion Break (Part 3 of 3)
Part 3 of our three-part refresher course on the principal residence gain exclusion break shows you what happens to the $250,000 ($500,000, if married) exclusion in the case of a divorce or marriage. In a divorce, good tax planning can be necessary if you’re going to retain the exclusion. You will also see what hurdles the government has put in place when you convert a vacation home or rental into your personal residence.
IRS Audit: Short-Term Rentals
When you are under an IRS audit and you need a citation that helps you, where do you find that citation? See what the tax professional in this article found that helped his client win the deduction.
How Are Roth IRA Withdrawals Taxed?
Not all Roth IRA withdrawals are federal-income-tax-free. Some withdrawals are taxable. Even worse, some can be socked with a 10 percent early withdrawal penalty tax, and this can happen even when there’s no income tax hit.
IRS Audit: Both IRS and CPA Wrong on This Rental Property Audit
In this IRS audit, both the IRS and the CPA held the incorrect position that the taxpayer had to materially participate in a rental property for more than 500 hours in order to deduct any losses or cost segregation.
How Are 529 College Savings Account Withdrawals Taxed?
The big advantage of 529 plans is that qualified withdrawals are always federal-income-tax-free—and usually state-income-tax-free too. What you may not know is that not all 529 withdrawals are tax-free qualified withdrawals, even in years when you have heavy college costs.
Be Sure to Know the Tax-Home Rule
When you travel out of town overnight, you need to know the tax-home rule. The IRS defines your tax home, and it’s not necessarily in the same town where you have your personal residence.