If you own your own business and operate as a proprietorship or partnership (wherein your spouse is not a partner), one of the smartest tax moves you can make is hiring your spouse to work as your employee. But the tax savings may be a mirage if you don’t pay your spouse the right way. […]
As an integral part of our commitment to keep you updated on matters that could affect your financial decisions, we want to inform you of recent changes and available incentives on electric vehicles at both the federal and state levels. While lawmakers extended the federal tax credit for personal-use electric vehicles through 2032, they restricted […]
For the past few weeks, I have received questions about the Section 105 medical reimbursement plan from my self-employed and solo C corporation owners. Below are the main points from my answers. When you have multiple businesses, all employees across these businesses are considered your employees under the Section 105-HRA plan. If you have more […]
I am writing with some thoughts about your approaching corporate liquidation. There are several tax implications that you need to be aware of. Complete liquidation of a C corporation is when it ceases to be a going concern, winds up its affairs, pays its debts, and distributes its remaining assets to the shareholder(s). In tax […]
I wanted to offer some insights regarding an important tax aspect related to the cleaning services at your home office. As you have a home office that qualifies for a home-office deduction and you employ a cleaning lady—let’s call her Annie—who maintains both your home and your home office, there are a couple of tax […]
The IRS recently issued new guidance on electric vehicles. There are four ways you can potentially benefit from a federal tax credit for an EV you place in service in 2023 or later: Purchase an EV, and claim the clean vehicle credit. Lease an EV, and benefit from the lessor’s EV discount. Purchase a used […]
You need an estate plan, regardless of whether or not you are among the ultra-rich. As recent news has shown, even those who have won the lottery or have substantial wealth can fall victim to poor estate planning. While federal estate taxes may not concern you, you need a will to have your wishes honored […]
When your S corporation covers or reimburses your more-than-2-percent-shareholder-employee health insurance expenses, it classifies the payments as box 1 W-2 wages but not box 3 or box 5 wages. When calculating the amount eligible for the Form 1040 self-employed health insurance deduction, you must use your Medicare wages (listed in box 5 of Form W-2) […]
Did you buy, sell, donate, or receive an NFT during the tax year? If so, you must answer “yes” to the digital assets question on page one of the IRS Form 1040. Additionally, if you have sold an NFT, you could be liable for tax or eligible for a deductible loss. If you are unsure […]
Health Savings Accounts (HSAs) are designed for use alongside high-deductible health plans, assisting you in covering your medical expenses. They can also function as an incredible retirement account due to their triple tax benefit: You can deduct contributions from your taxes. Your account balance grows without being taxed. Withdrawals for medical expenses are tax-free. And […]
I know you have been thinking about employee fitness and possibly a gym or other athletic facility. To be tax deductible, your gym or other athletic facilities must be primarily for the benefit of your employees—other than employees who are officers, shareholders, or other owners who own a 10 percent or greater interest in the […]
If your children work in your business, consider giving them education fringe benefits. Doing this right creates tax deductions for the business, and tax-free fringe education benefits for the child. You can accomplish this without a Section 127 plan when your child needs the education to do the job for your business or comply with […]
The current economic climate makes this a good time to focus on bad debt losses. As an individual taxpayer, deducting bad debt losses has always been controversial with the IRS. To claim the deduction, you must first establish that the loss was from a bona fide loan transaction that went wrong. So be alert. Avoid […]
The $75 rule applies to certain business expenses where you do not need a receipt. But I emphasize that this rule does not apply to all tax deductions. Many taxpayers mistakenly apply the $75 rule to all their tax deductions, which can result in a significant loss of deductions and penalties. I encourage you to […]
I’m reaching out to remind you of two important issues related to health insurance deductions for S corporations. First, if you own more than 2 percent of an S corporation and provide health insurance coverage, there are three steps you need to follow to claim a deduction: Step 1. The cost of the insurance must […]
The government does not want you to withdraw money from your IRAs and other retirement accounts before age 59 1/2. To deter early withdrawals, the government imposes a 10 percent penalty tax, in addition to regular income tax in the case of tax-deferred accounts. But what if you want to access your retirement funds before […]
Choosing the best virtual CFO for your business can be challenging. Here are some guidelines that may help you make the best decision for your needs. First and foremost, a virtual CFO should have a strong financial background and experience in managing finances for businesses. Look for someone who has worked with companies similar to […]
As the real estate market has cooled off in many parts of the country, investing in property may seem wise in the long run. But taxes can be a significant concern. Owning real estate in a C corporation may not be wise when considering taxes because it puts you at risk of being double-taxed. This […]
I hope this letter finds you well. As your tax advisor, I want to provide you with the latest updates on the business meal deduction for the year 2023 and beyond. As you may already know, there have been some significant changes to the business meal deduction for 2023 and beyond. The deduction for business […]
We are writing to update you on the latest developments in 2023 health insurance for S corporation owners. As a more-than-2-percent S corporation owner, you are entitled to some good news when it comes to your health insurance. To ensure that your health insurance deductions are in order and to avoid the $100-a-day penalties for […]
As you are likely aware, if you have an IRA or other tax-deferred retirement account, you must start taking required minimum distributions (RMDs) once you reach a certain age. The SECURE 2.0 Act raises the age at which RMDs must first be taken, from age 72 to 75, over the next 10 years. Specifically, the […]
In 1986, lawmakers drove a stake through the heart of your rental property tax deductions. That stake, called the passive-loss rules, causes myriad complications that now, 37 years later, are still commonly misunderstood. The Trap In 1986, lawmakers made you shovel your taxable activities into three basic tax buckets. Looking at the buckets from a […]
One of the key advantages of using a virtual CFO service over an in-house CFO is cost savings. Hiring an in-house CFO can be expensive, as it requires paying a full-time salary, benefits, and other overhead costs. On the other hand, virtual CFO services are typically more affordable, as they offer flexible pricing options and […]
A virtual CFO can transform a business by providing expert financial guidance and support without the need for a full-time, in-house CFO. This can save businesses significant costs while still receiving high-quality financial advice. Virtual CFOs can also provide a fresh perspective on a business’s financial operations, identifying areas for improvement and implementing strategies to […]
Small business owners often find themselves wearing multiple hats, including that of an accountant or bookkeeper. This can be a time-consuming task that takes away from other important business operations. By outsourcing these day-to-day accounting and bookkeeping processes to a fractional CFO service, small business owners can free up valuable time to focus on growing […]
The real estate boom appears to be over for now. Morgan Stanley predicts that house prices could fall by 10 percent by the end of 2024, perhaps twice as much in a worst-case scenario. Homeowners who purchased their homes at the top of the market could be in trouble, especially if the U.S. falls into […]
Do you owe self-employment tax on Airbnb rental income? That’s a good question. In Chief Counsel Advice (CCA) 202151005, the IRS opined on this issue. But before we get to what the IRS said, understand that the CCA’s conclusions cannot be cited as precedent or authority by others, such as you or your tax professional. […]
I see that you are using IRS mileage rates to deduct the cost of your business vehicle. I have a new tool that can tell us whether the mileage rates are a good deal for your taxes. With this tool, I look at the entire life of your vehicle, including any gain or loss on […]
As you likely know, the Section 1031 tax-deferred, like-kind exchange is one of the greatest wealth-building mechanisms for real estate investors. With Section 1031, you can avoid taxes on all your property upgrades during your lifetime and then pass the property to your heirs when you die. The heirs receive the property with a step-up […]
Sometimes debts can pile up beyond a borrower’s ability to repay, especially if we are heading into a recession. But lenders are sometimes willing to cancel (forgive) debts that are owed by financially challenged borrowers. While a debt cancellation can help a beleaguered borrower survive, it can also trigger negative tax consequences. Or it can […]