2023 Last-Minute Year-End Tax Strategies for Your Stock Portfolio
When you take advantage of the tax code’s offset game, your stock market portfolio can represent a little gold mine of opportunities to reduce your 2023 income taxes. The tax code contains the basic rules for this game, and once you know the rules, you can apply the correct strategies. Here’s the basic gist: Avoid […]
2023 Last-Minute Year-End Retirement Deductions
The clock continues to tick. Your retirement is one year closer. You have time before December 31 to take steps that will help you fund the retirement you desire. Here are five things to consider. 1. Establish Your 2023 Retirement Plan First, a question: Do you have your (or your corporation’s) retirement plan in place? […]
Want to Leave the U.S.? You May Have to Pay These Taxes
When you leave the U.S. to live in another country, you essentially have two choices from a tax perspective, both of which can cost you a pretty penny. First, you can simply leave the country and take up residence elsewhere. But if you choose this option, beware: the U.S. continues to tax you on your […]
Defining “Real Estate Investor” and “Real Estate Dealer”
I have great news! You can have in your real estate portfolio both investor and dealer properties. This distinction is significant for tax purposes. Here’s a snapshot of the potential tax differences: Suppose you profit $90,000 from a property sale: As a dealer, your tax could be up to $46,017 if you’re […]
Act Now! Get Your Safe-Harbor Expensing in Place
For 2024, you can elect the de minimis safe harbor to expense assets costing $2,500 or less ($5,000 with audited financial statements or similar). The term “safe harbor” means that the IRS will accept your expensing of the qualified assets if you properly abided by the safe harbor rules. The de minimis safe harbor, when […]
Test Your Tax IQ: Deducting More Than One Business Vehicle
Contrary to popular belief, the IRS does not limit business owners to claiming deductions on only one business vehicle. You might maximize tax benefits by using multiple vehicles for business purposes. This is particularly true when you use the vehicles predominantly (more than 50 percent) for business, you drive more business miles than your spouse, […]
Business Gym for Your Employees and Maybe You Too
I know you have been thinking about employee fitness and possibly a gym or other athletic facility. To be tax deductible, your gym or other athletic facilities must be primarily for the benefit of your employees—other than employees who are officers, shareholders, or other owners who own a 10 percent or greater interest in the […]
Don’t Expose Yourself with Improper Use of the $75 Rule
The $75 rule applies to certain business expenses where you do not need a receipt. But I emphasize that this rule does not apply to all tax deductions. Many taxpayers mistakenly apply the $75 rule to all their tax deductions, which can result in a significant loss of deductions and penalties. I encourage you to […]
Avoid This Family Member S Corporation Health Insurance Mistake
I’m reaching out to remind you of two important issues related to health insurance deductions for S corporations. First, if you own more than 2 percent of an S corporation and provide health insurance coverage, there are three steps you need to follow to claim a deduction: Step 1. The cost of the insurance must […]
Plan Your Passive Activity Losses for Tax-Deduction Relevance
In 1986, lawmakers drove a stake through the heart of your rental property tax deductions. That stake, called the passive-loss rules, causes myriad complications that now, 37 years later, are still commonly misunderstood. The Trap In 1986, lawmakers made you shovel your taxable activities into three basic tax buckets. Looking at the buckets from a […]
Tax Law Changes in 2023
Are you ready for the new tax law changes coming in 2023? Because it’s a whole new ball game! Here are the major changes that you should know about: August 2022: Inflation Reduction Act Clean energy tax credits for homeowners Rebates for electric vehicle purchases Expanded IRS Enforcement 15% corporate minimum tax Tax on stock […]
Primer: When Cancellation of Debt (COD) Income Can Be Tax-Free
Sometimes debts can pile up beyond a borrower’s ability to repay, especially if we are heading into a recession. But lenders are sometimes willing to cancel (forgive) debts that are owed by financially challenged borrowers. While a debt cancellation can help a beleaguered borrower survive, it can also trigger negative tax consequences. Or it can […]