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Based on IRS regulations, club dues are generally not deductible if the organization’s principal purpose is to conduct entertainment activities for its members.  However, there are exceptions for civic and public service organizations, such as the Lions, Rotary, Kiwanis, and Civitan clubs, which the IRS recognizes as not being...

The story of James Maggard, a minority shareholder in an S corporation, highlights some significant lessons about the importance of vigilance and the need for proper oversight in businesses with multiple owners. Maggard, who owned 40 percent of the corporation, discovered too late that his fellow shareholders looted the...

After our discussion about ways to save on your Social Security taxes, you might be wondering how these savings impact your Social Security benefits. After all, paying less into Social Security results in receiving lower benefits later in life.  However, there is a strategy to come out ahead—by creating...

You can plan your tax-deductible business life to avoid cold winters and hot summers. Spend a moment examining the following four short paragraphs containing the Andrews case’s basic facts.  For six months of the year, from May through October, Edward Andrews lived in Lynnfield, Massachusetts, where he owned and operated Andrews...

As you consider converting your C corporation into an S corporation, understand and plan for the built-in gains (BIG) tax.  The tax code imposes the BIG tax on S corporations that recognize gains on assets that the C corporation held at the time of S corporation conversion. Some gains...

If you run your business through a regular “C” corporation, beware of the accumulated earnings tax (AET).  The IRS can use the AET to penalize C corporations that retain earnings in the business rather than pay them to shareholders as taxable dividends. To retain earnings, the C corporation first...

Consider this happy scenario: You purchased one Bitcoin for $15,000 14 months ago and another six months later for $40,000. Today, you sell one Bitcoin for $60,000. You’re a genius! But is your taxable gain $45,000 or $20,000?  It all depends on your crypto accounting method. Many crypto owners...

You may own an S corporation with a rental property as its sole asset. A common concern with this approach is what happens when the owner passes away, specifically regarding the step-up in basis. I’m pleased to inform you that while technically the rental property itself doesn’t receive a...

As you likely know, S corporations can offer numerous advantages, such as tax efficiency, ease of ownership, and operational simplicity. But there are specific pitfalls associated with an S corporation owning an aircraft. Here are the top pitfalls, along with strategies to mitigate the tax issue. Basis Limitations The...

Here’s important information regarding aircraft leasing and potential tax implications: 1. The IRS has announced increased audit scrutiny of private jet usage, mainly focusing on high-income taxpayers. You can bet this focus will trickle down to most aircraft. 2. There’s a risk that the IRS could classify your aircraft...

Here are some important updates and strategies regarding Social Security and Medicare taxes that may significantly impact your business. For 2024, the Social Security tax ceiling increased to $168,600, resulting in a maximum Social Security tax of $20,906 for high-earners. The Social Security Administration projects this ceiling to rise...

Long-term care costs can be substantial, and neither Medicare nor Medicaid provide comprehensive coverage for most people. Long-term care insurance can help protect your finances, and there may be ways to deduct the premiums, depending on your business structure. Here are four key points to consider: If you want...