News

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 share of net partnership income...

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 up to the taxable limits Tax-free IRA withdrawals (on top...

New Law: Business Tax Credits for Your Electric Vehicle Purchases 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...

To date, 29 states have enacted pass-through entity (PTE) taxes that can enable owners of pass-through entities such as partnerships, multi-member LLCs, and S corporations to effectively get around the federal $10,000 limit on deducting state and local taxes (SALT). The 29 states are Alabama, Arizona, Arkansas, California, Colorado,...

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 pay (unlike a tax deduction...

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 (or general sales taxes if...

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 out of the...

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 capital gains tax—perhaps at a...

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 income, you might want to...

The Fed is finally taking aggressive action to fight inflation, but will it work? Where’s the stock market headed? Who knows? Real estate might be a good inflation hedge, but it’s a non-liquid asset and no sure thing. Clearly, this is not a great environment for investors or retirement...

Here’s a question I received from one of my clients: I will hire my 15-year-old daughter to work in my single-member LLC business, and I expect to pay her about $12,000 this year. Do I pay her through payroll checks and file a W-2? My Answer Yes. And W-2...

Through October 2022, you can buy Series I bonds that pay 9.62 percent interest. And you receive that rate for six months from the time of purchase. What happens after that? On November 1, 2022, the U.S. Treasury Department sets a new six-month rate equal to the fixed rate...