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, […]
Uncertain Tax Position? File Form 8275 to Avoid Penalties
Are you considering a bold tax position that may significantly reduce your taxes? If approved by the IRS, it’s a win. But if disapproved, be prepared to face a considerable tax penalty. The IRS imposes a 20 percent penalty for substantial tax underpayment. For instance, if the IRS finds you underpaid your taxes by $50,000, […]
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 […]
When Your Income Is Subject to Self-Employment Taxes
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. Indeed, many business owners pay more in self-employment taxes than in income tax. The self-employment […]
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 earnings. To clarify that it expects you […]
What Happens When You Don’t File Your Taxes On Time
Life happened, circumstances changed, and you missed the filing deadline. Now, you’re looking at fees and penalties that you will have to pay on top of your existing tax bill. This can be an overwhelming and frustrating process, but it’s easier to navigate if you know what to expect. Let’s play out the worst-case scenario, […]
5 Things You Shouldn’t Do If You’re Filling Your Taxes Late
The deadline for the 2020 tax year was extended one month, to May 17th, 2021, but some taxpayers still missed the deadline. Perhaps you are one of those people. While many life circumstances can affect a taxpayer’s ability to get things in order on time, a few key steps can help minimize the negative repercussions […]
How To Teach Your Children About Taxes Without Shedding Tears
Do you remember how you first learned about taxes and how they could impact your finances? For too many people, learning about taxes comes through someone’s first time having to file taxes for their very first job. Or, even worse, they learn some lessons too late after improperly filing, finding out they were supposed to […]
Why You Should File Your Taxes Regardless of Your Immigration Status
As most Americans know, we’re deep into tax season right now thanks to a federal extension that allows taxpayers to file by May 17 this year, rather than the typical April 15 date. But while legal citizens know they have to get their financial documents in order, immigrants might be a bit confused about what […]
Does the stimulus check affect individual taxes?
The tax deadline is swiftly approaching and with it, a need to get all of your financial affairs in order. But this year is different from the last. This year, American taxpayers are considering how their stimulus checks might affect their tax bills.
Tax Deadline Delayed Until May 17 — Should I Wait or File Now?
It’s true what they say, that nothing is for sure but death and taxes. However, this year we get a little reprieve from the latter. Due to the global COVID-19 pandemic, the IRS has extended the tax filing deadline from April 15 to May 17, giving filers an additional month to get their financial affairs in order. While the procrastinators […]
How To File Taxes: An Ultimate Guide To Filing Taxes In 2021
The big news this tax season is that the deadline for filing has been pushed back from April 15th to May 17th. This decision was made in light of the ongoing coronavirus pandemic, and it gives taxpayers a little more time to file their taxes. That said, it never hurts to start preparing a little early. […]