News

Do you have a sideline activity that you think of as a business?  From this sideline activity, are you claiming tax losses on your Form 1040? Will the IRS consider your sideline a business and allow your loss deductions? The IRS likes to claim that money-losing sideline activities are...

Imagine this: Tax deduction for you Tax-free income for Mom and Dad It doesn’t have to be Mom and Dad. The tax-free income can go to your brother or sister, or your best friend. To make this work, you need to have a business reason to travel and stay...

The tax code says, “The term ‘net earnings from self-employment’ means the gross income derived by an individual from any trade or business carried on by such individual . . .”  The Supreme Court ruled that to be in a trade or business, you need to be involved with...

When you own rental property, depreciation is your best friend.  One reason depreciation is so valuable is that, unlike deductible rental property expenses such as interest and maintenance, you get to claim depreciation year after year without having to pay anything beyond your original investment in the property.  Moreover,...

Tax-advantaged retirement accounts such as IRAs are a great way to save for retirement.  But when you establish a traditional IRA with a bank, a brokerage, or a trust company, you are ordinarily limited to a narrow range of investment options, such as CDs, publicly traded stocks, bonds, mutual...

Once upon a time, you could convert a rental property or vacation home into your principal residence, occupy it for at least two years, sell it, and take full advantage of the home sale gain exclusion privilege of $250,000 for unmarried individuals or $500,000 for married joint-filing couples.  Unfortunately,...

Obtaining a tax credit is the next best thing to paying no taxes at all.  The tax code contains over 30 non-refundable tax credits for businesses. These are part of the general business tax credit and are claimed on IRS Form 3800, General Business Tax Credit, and on Schedule...

When the individual production activity of a partner is outside his or her capacity as a member of the partnership, the partnership has two choices: Allocate the production income to the partner, and have the partner treat the expenses as unreimbursed partner expenses (UPE). Treat the partner as a...

If you hire an employee for your Schedule C business, you can qualify for several valuable tax credits.  Each credit is different, and certain limitations apply to all or most employer tax credits. Remember, tax credits are the best. They beat deductions. Note the difference below (using the 32...

After reaching age 50, you can make additional “catch-up” contributions to certain types of tax-advantaged retirement accounts. For the 2021 tax year, this opportunity is available if you’ll be age 50 or older on Friday, December 31, 2021. Specifically, with an employer-sponsored 401(k), 403(b), 457, or SIMPLE plan, you...

Say goodbye to the employee retention credit (ERC) for the fourth quarter. Lawmakers giveth, and lawmakers taketh away. In this case, what lawmakers did is pitiful. It’s like magic: now you see it, now you don’t. On March 11, 2021, the American Rescue Plan Act of 2021 became Public...

Real estate values have surged in many parts of the country and are still surging in some areas. That’s good news if you’ve been holding raw land for investment.  You might be ready to cash in by subdividing and developing your acreage and selling off parcels for big profits....