Do You Need a W-2 for Spouse-Employee 105-HRA Benefits?
If you employ your spouse in your business and use a Section 105-HRA to deduct family medical expenses, you may be wondering whether issuing a W-2 is necessary. The good news from a tax law standpoint, a W-2 is not required. IRS guidance and court decisions confirm that medical reimbursements under a properly structured Section […]
A Little-Known Way to Pay Family and Save on Taxes
Many business owners overlook a powerful strategy that allows them to pay family members, reduce taxes, and avoid payroll taxes altogether. You likely know the traditional approach: hire your child and put them on payroll. That strategy works well for younger children in a sole proprietorship. But once your child turns 18—or if you operate […]
$12,000 Door Replacement: Repair or 39-Year Asset?
When a five-figure commercial building expense hits your desk, the first question is simple: Can you deduct it, or must you depreciate it over 39 years? Consider a recent example. An office building owner replaced a failed sliding glass door and frame at a total cost of $12,000, including removal and installation. The new unit […]
Late Filing Costs Estate $1.5M—Will Yours Be Next?
With today’s $15 million federal estate and gift tax exemption ($30 million for married couples), it’s easy to believe estate tax planning is no longer a concern. But a recent Tax Court case proves otherwise—an estate lost $1.5 million simply because a portability election was not properly and timely filed. Here’s the key issue: When the […]
Husband-and-Wife LLC—Do They Have to File a Partnership Return?
Many married couples form an LLC to own rental property to obtain liability protection. After they create the LLC, they often ask an important tax question: Does the LLC force them to file a partnership return? The answer depends largely on where they live and how they own the property. Federal tax rules treat any […]
IRS Moves Toward All-Electronic Refunds: What You Need to Know
Your tax refund will no longer arrive by paper check. The IRS recently announced that it will stop issuing refund checks, with limited exceptions, and will require taxpayers to receive refunds electronically. Why the Change?Paper checks cost more, create security risks, and take much longer to process. In addition, the Trump administration directed all federal […]
Claim Up to $32,220 in Missed 2021 Self-Employed COVID-19 Sick and Family Leave Credits Today
Were you self-employed during 2021? If so, there is a good chance that you could have qualified for COVID-19 sick and family leave credits worth as much as $32,220. If you’re like many self-employed individuals or partners, you probably never heard about these tax credits. Unlike employee retention credit for employers, the special temporary credits […]
Cost Segregation: A Great Strategy When?
One significant tax benefit of owning residential rental property or non-residential commercial or investment property is depreciation—a deduction you get without spending any additional money. But regular depreciation for real property is slow. Residential rental property is depreciated over 27.5 years and non-residential property over 39 years, providing a relatively small deduction each year. Fortunately, […]
Did You Overfund a Section 529 Plan? Consider a Roth IRA Rollover
Have you established, or are you considering, a Section 529 savings plan for a child, grandchild, or other family member? Such plans are a great way to help pay for a person’s college education. Contributions are not federally tax deductible, but they grow tax-free, and you can withdraw them tax-free to pay higher education expenses. […]
Tax Reform Doubles Down on S Corporation Reasonable Compensation
From 2018 to 2025, the Tax Cuts and Jobs Act is offering a 20 percent deduction on pass-through business income, with specific eligibility criteria. This deduction impacts the choice of entity. For instance, should you operate as a sole proprietorship or an S corporation? The Importance of Reasonable Compensation When operating your business as an […]
Businesses and Rentals Existing on Jan. 1 Trigger FinCEN Filings
For existing businesses, the Corporate Transparency Act (CTA) has come into force as of January 1, 2024, and imposes a brand-new federal filing requirement on most corporations, limited liability companies, and limited partnerships and on certain other business entities. No later than December 31, 2024, all non-exempt business entities must file a beneficial owner information […]
Create Tax-Free Fringe Benefit Deductions for your Smartphone
I hope you can benefit from this fringe benefit opportunity related to business smartphones. The IRS allows businesses to provide smartphones and tablets such as iPads as a tax-free fringe benefit, simplifying tax implications and eliminating the need for detailed usage records. Eligibility. This benefit applies to corporations, partnerships, and other entities, and it can […]