2022 Tax Insights

More Tax News on Cryto's

Here’s something to know about cryptocurrencies. Because cryptocurrencies are classified as “property” rather than as securities, the wash-sale rule does not apply if you sell a cryptocurrency holding for a loss and acquire the same cryptocurrency before or after the loss sale. You just have ... (continued)

1031 Exchanges Update

Have you sold, or are you planning to sell commercial or rental property? To avoid immediately paying capital gains tax on your profit, you have options: Deferring the capital gains tax using a Section 1031 exchangeDeferring the capital gains tax using a qualified opportunity zone ... (continued)

$80 Billion To The IRS-What Does it Mean to You

You may have noticed that the IRS is in a bad way. It has a backlog of millions of unprocessed paper tax returns, and taxpayers can’t get through to the agency on the phone. Congress noticed and took action by passing a massive funding ... (continued)

More Year End Tax Reduction Strategies!

The purpose of this article is become aware of legal tax savings strategies to reduce year-end tax liabilities. Of course, the IRS will not likely cut you a check for this money (although, in the right circumstances, that will happen), but you’ll realize the cash ... (continued)

Year-End Retirement Considerations

The clock continues to tick. Your retirement is one year closer. You have time before December 31 to take steps that will help you fund the retirement you desire. Here are four things to consider. 1. Establish Your 2022 Retirement Plan First, a question: Do you have ... (continued)

Bonus Depreciation Coming to an End!

All good things must come to an end. On December 31, 2022, one of the best tax deductions ever for businesses will end: 100 percent bonus depreciation. Since late 2017, businesses have used bonus depreciation to deduct 100 percent of the cost of most ... (continued)

Electric Vehicle New Tax Laws-Maybe Be Best To Buy Before 12/31/22?

There’s good and bad news if you’re in the market for an electric or plug-in hybrid electric vehicle. The good news is that the newly enacted Inflation Reduction Act includes a wholly revamped tax credit for electric vehicles that starts in 2023 and continues ... (continued)

Employee Retention -It's NOT Too Late!

If you had W-2 employees in 2020 and/or 2021, you need to look at the Employee Retention Credit (ERC). As you likely know, it’s not too late to file for the ERC. And now is a good time to get this done. You can qualify for ... (continued)

10 Tax Strategies for S Corporations

Here\'s 10 strategies to reduce your S Corporations Taxes:1.  Reduce the S Corporation owner\'s wages2.  Deduct the S Corporation owner\'s health insurance premiums3.  Employ your child to lower your taxable income4. Sell your home to the Corporation before converting it to a rental property5. ... (continued)

Convert Your Partnership Into an S Corporation To Reduce Taxes!

Let’s say you’re considering converting your partnership into an S corporation. The reason might be to reduce exposure for you and the other owners to Social Security and Medicare taxes, which come in the form of the self-employment tax for partners. Specifically, each partner’s ... (continued)

Energy Saving Tax Credits Under New Tax Law!!

The President signed the Inflation Reduction Act into law on August 16, 2022. It contains some valuable tax credits for homeowners. When it comes to taxes, nothing is better than a tax credit since it is a dollar-for-dollar reduction in the taxes you must ... (continued)

Beat the TAXMAN with These 11 Tax-Free Income Sources!

I was perusing the Internal Revenue Code (it’s one of the things I do) and started to think about the various sources of tax-free income. Here are the 11 that jumped out at me: Roth IRAs Social Security benefits ... (continued)

Expanded Tax Credits for Your BUSINESS Electric Vehicle

You may have heard that the newly enacted Inflation Reduction Act includes an expanded tax credit for electric vehicles. Although this personal credit has gotten most of the publicity, the new law launched a new commercial clean vehicle credit—specifically for business-use electric vehicles. And ... (continued)

Defer Taxes With This Tax Strategy-Installment Sale

Do you own investment property? What about a small business? Sooner or later, you will probably want to sell. One of the downsides of selling a business or investment property is the huge tax bill at the end. Profits are likely subject to the ... (continued)

Here's How to defeat $10,000 SALT Cap

Maybe the least popular change brought about by the Tax Cuts and Jobs Act (TCJA) was a first-ever cap on the federal personal income tax deduction for state and local taxes. From 2018 through 2025, the TCJA caps itemized deductions for state income taxes ... (continued)

Non-Working Spousal IRA's-What You Need to Know

You may have joined the Great Resignation, maybe temporarily or maybe for good. Or your non-working status might have nothing to do with the Great Resignation. For instance, you could be a stay-at-home parent. In any case, as a spouse with no tax-defined earned ... (continued)

You Still Can Claim ERC-Here's How!

During much of 2020 and 2021, you may have qualified for the Employee Retention Credit (ERC). With the ERC, you found (or could find) tax credits of up to $26,000 per employee. That’s a lot. With 10 employees, that’s $260,000. Key point. If you have not ... (continued)

How to Switch From Mileage to Actual Costs for your Vehicle

Is the mileage rate sticking it to you? Could you increase your tax deductions by switching from the IRS mileage rate to the actual-expense method? If so, you will be happy to learn you can make that switch. When you choose the mileage rate, you elect ... (continued)

Deducting Mortgage Interest When Your Name is NOT on Deed

Tax law has an amazing break for unconventional homeowners. You can deduct your mortgage interest payments even when the deed to the house and the mortgage are in someone else’s name. Here’s what happened to Sue Davis. Sue could not personally qualify for a home loan. Her ... (continued)

ALERT-New FinCEN Regulations Coming Soon!

Do you own or advise a corporation, limited liability company (LLC), limited partnership, limited liability partnership, limited liability limited partnership, or business trust? Or are you planning to form one of these entities? If so, be alert. There’s a new federal filing requirement coming. Back ... (continued)

Pros & Cons of LLC's-Maybe Just Form a Corporation?

Limited liability companies (LLCs) are a popular choice of entity for small businesses and investment activities. LLC owners are called members. Single-member LLCs have one owner, although spouses who jointly own an LLC in a community property state can elect treatment as a single member ... (continued)

Legal Way to Deduct Home Office for Your S Corporation

You likely know that the home-office tax deduction provides tax savings to business owners. It turns otherwise nondeductible personal expenses into valuable business deductions. When you operate your business as a proprietorship, you simply deduct home-office expenses on Schedule C. But when you operate ... (continued)

Here's How to Maximize Your Business Mileage Deductions!

I absolutely, positively don’t like commuting mileage. You should dislike it, too. It’s personal. It’s not deductible. But with knowledge, it’s avoidable. Let’s eliminate commuting and make those trips from your home to your office deductible. The law gives you two ways to eliminate commuting from your ... (continued)

Why an S Corporation Reduces Self Employment Tax-Legally!!

If you report your business on Schedule C of your Form 1040, or are a general partner, this article is for you! Have you noticed that the self-employment tax significantly drains your cash? The S corporation may plug a good chunk of that leak ... (continued)

When Your Income is Subject to Self Employment Tax

If you own an unincorporated business, you likely pay at least three different federal taxes. In addition to federal income taxes, you must pay Social Security and Medicare taxes, also called the self-employment tax. Self-employment taxes are substantial. Indeed, many business owners pay more ... (continued)

You Are Still Able to Claim the Emplyee Retention Credit (ERC)-Please Read ON!

With the Consolidated Appropriations Act, 2021, millions of small-business owners like you still qualify for the employee retention credit (ERC), thanks to three big changes: You can now obtain the ERC and the Paycheck Protection Program loan, but not ... (continued)

90 Day Mileage Log Rule-Important!

Often in an IRS audit, the examiner will ask for your mileage log at the beginning of the audit. If you do not have a mileage log, you are in what former presidential candidate Ross Perot called deep doo-doo. Think about it. If you don’t ... (continued)

The Unpardonable Sin in an IRS Audit

What is the unpardonable sin in an IRS audit? Suppose you just received that lovely letter from the IRS telling you that you are the subject of an IRS audit. What one record receives special attention? What one record can create a nightmare for you? What ... (continued)

How to Nail Down Your Travel Deductions

As you likely know by now, your travel meals continue under tax reform as tax-deductible meals subject to the 50 percent cut. And tax reform did not change the rules that apply to your other travel expense deductions. One beauty of being in business for yourself ... (continued)

Watch Out For This Coming to Your Business-Financial Crimes Enforcement Network

Do you own or advise a corporation, limited liability company (LLC), limited partnership, limited liability partnership, limited liability limited partnership, or business trust? Or are you planning to form one of these entities? If so, be alert. There’s a new federal filing requirement coming. Back ... (continued)

There's Relief from Improperly Classifying Workers as Independent Contractors

The IRS Classification Settlement Program (CSP) offers a chance to settle your employment tax debt due to worker misclassification, if you do not qualify for Section 530 relief. CSP agreements typically result in a substantial reduction of assessed employment taxes, especially if you misclassified ... (continued)

Legal Way to Deduct Home Office for Your Corporation

Here\'s the 2 boilerplate explanations IRS agents use to deny home office deductions:1. IRS has disallowed your deductions for office-in-the-home expense because you have not established that is was for the convenience of your employer. Voluntary, vocational, or incidental use of part of your ... (continued)

$75 Receipt Rule for Business Vehicles

The $75 rule is contained in IRS Regulaton 1.274-5(c)(2)(iii), and the best explanation of what this rule says is found in IRS Notice 95-50, which states that the $75 rule applies to travel, entertainment, gifts, and listed property. IRC Section 280(f)(d)(4) states that listed ... (continued)

Selling Your Vacation Home? Here's the Tax Consequences

The tax-code-defined vacation home rules come into play when you have both rental and personal use of a home. Thus, you can have tax-code-defined vacation homes in the city, in the suburbs, and in recreation areas. If you have no combined rental and personal use ... (continued)

Now May Be the Time to Transfer Your Residence to Your Children

With today’s home prices and the crazy real estate market, it’s likely difficult for your children to buy a home. And it’s conceivable that you are ready to move on from your existing home. If this is true, consider the three options below. Option 1: ... (continued)

Misclassification of Independent Contractors- Please Read--- IRS Relief

The IRS Classification Settlement Program (CSP) offers a chance to settle your employment tax debt due to worker misclassification if you do not qualify for Section 530 relief. CSP agreements typically result in a substantial reduction of assessed employment taxes, especially if you misclassified ... (continued)

QSEHRA-For Small Business Health Insurance Plans-Still Works!

Finally, the health insurance rules that apply to small businesses make more sense and allow some benefits. Beginning January 1, 2017, you can install a new qualified small employer health reimbursement arrangement (QSEHRA) and start helping your employees pay for their health insurance and other ... (continued)

S Corporation & Health Insurance Rules-Important!

You and your S corporation continue to enjoy good news in 2018 when it comes to your health insurance. And that good news also applies to your 2017 taxes. You first have to thank the 21st Century Cures Act for: Reinstating and extending ... (continued)

Own More than 1 Business-Please Read This

When you own more than one business, you need to consider the grouping rules that apply for passive-loss purposes. Should one of your businesses lose money, you may not deduct the losses from that business during the current tax year unless you materially participate in the ... (continued)

Here's How to Mail Documents to the IRS

You have heard the horror stories about mail sent to the IRS that remains unanswered for months. Reportedly, the IRS has mountains of unanswered mail pieces in storage trailers, waiting for IRS employees to process them. Because the understaffed IRS is having so much trouble ... (continued)

Deducting Mortgage Interest When Your Name is NOT on Deed

Tax law has an amazing break for unconventional homeowners. You can deduct your mortgage interest payments even when the deed to the house and the mortgage are in someone else’s name. Here’s what happened to Sue Davis. Sue could not personally qualify for a home loan. Her ... (continued)

Small Business-Read This!!

Don’t let this happen to you. Here’s what happened to Mr. Kazmi. First, a little background. Urgent Care Center Inc., an Illinois corporation, employed Mr. Kazmi as a part-time hourly bookkeeper. He had no ownership interest in Urgent Care. He was not an officer of Urgent Care. ... (continued)

Health Savings Accounts (HSA's)-Ultimate Health Plan?

It isn’t easy to make predictions, especially about the future. But there is one prediction we’re confident in making: you will have substantial out-of-pocket expenses for health care after you retire. Personal finance experts estimate that an average retired couple age 65 will need ... (continued)

How to Avoid the Self-Rental Trap

Let’s say you own the building. Now, let’s say that you rent this building to your business. With no tax planning, you have a self-rental, and that makes rental income from this building nonpassive, meaning that it cannot offset any ... (continued)

Precious Metals--Tax Implications!

These days, some IRA owners and investors may be worried about being overexposed to equities. That could be you. But the safest fixed income investments (CDs, Treasuries, and money-market funds) are still paying microscopic interest rates. For example, when this was written, the 10-year Treasury ... (continued)

Q & A on Health Insurance Premiums & Medicare

Taxable income has consequences. It causes income taxes.And it causes you to pay either more or less for Medicare.It boils down to this: there’s always a need to reduce your taxable income. The monthly premium for the current year depends on your modified adjusted gross income ... (continued)

Independent Contractor Misclassification-Section 530 To The Rescue!

As a business owner, you are obligated to collect and remit payroll taxes for your employees. But you are not required to collect and remit payroll taxes for independent contractors. That’s why it’s important to correctly classify workers as either employees or independent contractors. But ... (continued)