Tax Tips

New and Improved Energy Tax Credits for Homeowners

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...

Self-Employment Taxes for Partners and LLC Members

Limited liability companies (LLCs) are a popular choice of entity for small businesses and investment activities. LLC owners are called members. Here’s a question: Does a member of a limited liability company (LLC) or a partner in a partnership have to pay...

Self-Employment Tax Basics

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 not insubstantial....

New 62.5 Cents Mileage Rate

The IRS noticed that average gas prices across the United States exceeded $5.00 a gallon and took action. Small businesses that qualify to use and do use the standard mileage rate can deduct 62.5 cents per business mile from July 1 through December 31, 2022. That’s up...

Paying Your Child: W-2 or 1099?

Working at a tender age is an American tradition. Here’s what you need to know about paying your kids properly. Question 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...

Transferring Your Home to Your Adult Child

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: Make an Outright...

Selling Your Appreciated Vacation Home? Consider the Taxes

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 of...

Alert: A Massive New FinCEN Filing Requirement Is Coming

Do you own 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...

Deduct a Cruise to Mexico

You may not have thought of this, but taking a cruise ship to Mexico for a business meeting is acceptable as a deductible form of transportation. Because Mexico is in the tax law–defined North American area, the law says that you need no stronger business reason to...

Are Self-Directed IRAs for Real Estate a Good Idea?

The stock market is tanking while real estate continues to skyrocket. If your retirement savings have taken a hit, you may be wondering if this is the time to invest in real estate through your IRA, Roth IRA, or SEP-IRA. You can’t invest in real estate with a...

The IRS Wants to Know about Your Crypto

Cryptocurrency such as bitcoin is all the rage these days. Crypto is not legal money. It is property, similar to gold. Like gold, its use can result in taxable income. The IRS is concerned that you and millions of Americans are using crypto without paying tax on the...

Health Savings Accounts: The Ultimate Retirement Account

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...

Partnership with Multiple Partners: The Good and the Bad

The generally favorable federal income tax rules for partnerships are a common reason for choosing to operate as a partnership with multiple partners instead of as a corporation with multiple shareholders. The most important partnership tax benefit rules can be...

Send Tax Documents Correctly to Avoid IRS Trouble

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...

Tax Implications When Your Vacation Home Is a Rental Property

If you have a home that you both rent out and use personally, you have a tax code-defined vacation home. Under the tax code rules, that vacation home is either • a personal residence or• a rental property. The tax code classifies your vacation home as a rental...

IRAs for Kids

Working at a tender age is an American tradition. What isn’t so traditional is the notion of kids contributing to their own IRA, especially a Roth IRA. But it should be a tradition, because it’s a really good idea. Here’s what you need to know about IRAs for kids....

Vacation Home Rental—What’s Best for You: Schedule C or E?

Do you have a beach or mountain home that you rent out? If the average period of rental is less than 30 days, you likely have a choice—either • claim the income and expenses on Schedule C, or• claim the income and expenses on Schedule E. When Is Schedule C a Good...