When you buy business or investment real property, such as an apartment building, you usually pay one lump sum for land, buildings, and other improvements. There’s no cost breakdown. You can’t depreciate land because it doesn’t wear out. So, as far as depreciation...
When you know the rules related to business mileage, you protect yourself in the event of an IRS audit, and pay less tax. Take Henry, for example. Before he knew the mileage rules, he deducted 30 percent of his SUV’s cost. Once he learned the rules, he deducted...
Here’s a vehicle story that you will find of interest. Taxpayer DJ is in an IRS audit of his 2018 tax return. It is now at the IRS appeals level. Example The vehicle in question is an SUV with a curb weight of 5,700 pounds and a gross vehicle weight of 6,100...
The PayPal loophole is going away in a little over six months from now. In Practice You used to be able to avoid giving 1099s to contractors and vendors when you use PayPal or a similar service as your payment platform. This pushed the reporting requirements...
Cryptocurrencies have gone mainstream. For example, you can use bitcoin to buy far more than you would think. To see, try googling “What can I buy with bitcoin?” You will get more than 350,000 hits. But using cryptocurrencies has federal income tax implications that...
What happens when lawmakers enact a new tax? It starts small. It looks easy. In 1935, the self-employment tax topped out at $60. Those 1935 lawmakers must be twirling in their graves with the new rules for 2021, which levy the following taxes: • A self-employment tax...
