Employee Retention Credit (ERC) Update

Written by Coach Janelle CPA on October 23, 2024

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BOI Reporting Deadline is Closing In

Written by Coach Janelle CPA on October 16, 2024

The clock continues to tick. Here are the upcoming deadlines for filing your Business Ownership Information (BOI) reports with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN)..

Avoid the Hidden Dangers of the Accumulated Earnings Penalty Tax

Written by Coach Janelle CPA on September 18, 2024

f you run your business as a regular C corporation, beware of the accumulated earnings tax (AET). The IRS can use the AET to penalize C corporations that retain earnings in the business rather than pay them to shareholders as taxable dividends. When retaining earnings, the C corporation first pays the corporate tax of 21 percent on those earnings.,,

Reduce Taxes by Using the Best Cryptocurrency Accounting Method

Written by Coach Janelle CPA on September 11, 2024

Consider this happy scenario: You purchased one Bitcoin for $15,000 14 months ago and another six months later for $40,000. Today, you sell one Bitcoin for $60,000. You’re a genius! But is your taxable gain $45,000 or $20,000...

What Happens When You Die and Your S Corporation Owns the Rental?

Written by Coach Janelle CPA on September 4, 2024

You may own an S corporation with a rental property as its sole asset. A common concern with this approach is what happens when the owner passes away, specifically regarding the step-up in basis. Here’s good news. While technically the rental property itself doesn’t receive a step-up in basis upon your death, your heirs will achieve the same outcome. It works like this...

Smart Solutions That Decrease Social Security and Medicare Taxes

Written by Coach Janelle CPA on August 28, 2024

Here are some important updates and strategies regarding Social Security and Medicare taxes that may significantly impact your business. For 2024, the Social Security tax ceiling increased to $168,600, resulting in a maximum Social Security tax of $20,906 for high-earners. The Social Security Administration projects this ceiling to rise annually...

Tax Guide to Deducting Long-Term Care Insurance Premiums

Written by Coach Janelle CPA on August 21, 2024

Long-term care costs can be substantial, and neither Medicare nor Medicaid provide comprehensive coverage for most people. Long-term care insurance can help protect your finances, and there may be ways to deduct the premiums, depending on your business structure...

Know the Exceptions to the 10 Percent Penalty on Early IRA Withdrawals

Written by Coach Janelle CPA on August 14, 2024

Early withdrawals from a traditional IRA before age 59 1/2 generally incur a 10 percent penalty tax on the taxable portion of the withdrawal. There are several exceptions to this rule that can help you avoid the penalty under specific circumstances. Below, we have outlined the key exceptions that may apply to your situation. Substantially equal periodic payments...

Shutting Down Your S Corporation

Written by Coach Janelle CPA on August 7, 2024

As you consider the process of shutting down your S corporation, it is crucial to understand the federal income tax implications that come with it. Here, I outline the tax basics for the corporation and its shareholders under two common scenarios: stock sale and asset sale with liquidation...

Claim Up to $32,220 in Missed 2021 Self-Employed COVID-19 Sick and Family Leave Credits Today

Written by Coach Janelle CPA on July 31, 2024

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 for the self-employed received relatively little publicity. Many tax professionals were unaware of them. As a result, many self-employed individuals and partners never applied for...

Limited Partners and Self-Employment Taxes

Written by Coach Janelle CPA on July 17, 2024

Self-employment taxes are substantial, and most people want to minimize them. Self-employed taxpayers often avoid self-employment taxes by operating as an S corporation. The distributions from the S corporation are not subject to self-employment tax. But Social Security and Medicare tax must be paid on the shareholders’ employee compensation (which must be reasonable based on the services they provide). S corporations are also subject to various legal restrictions that can...

Tax Implications of Shutting Down a Sole Proprietorship

Written by Coach Janelle CPA on July 10, 2024

As you consider shutting down your sole proprietorship or your single-member LLC treated as a sole proprietorship for tax purposes, it’s crucial to understand the tax implications of this decision. Here’s an overview of key points you need to consider. 1. Asset Sale Tax Implications When you sell a sole proprietorship, you sell its assets, not the company. Federal tax rules tell you how to allocate the total sale price to specific business assets....

Cost Segregation: Is This Strategy for You?

Written by Coach Janelle CPA on July 6, 2024

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, there is a way you can speed up your depreciation deductions—especially during the first year or years you own the property: cost segregation...

Tax Implications of Selling Qualified Improvement Property (QIP)

Written by Coach Janelle CPA on March 16, 2024

You need to think about the sale of your rental property when you claim depreciation on your qualified improvement property (QIP). Gains may be subject to higher-than-expected tax rates due to Section 1245 and Section 1250 ordinary income recapture and other factors. Planning your depreciation methods can significantly impact your current tax liabilities and long-term taxable gains when you sell...

The IRS Annual Dirty Dozen List

Written by Coach Janelle CPA on March 11, 2024

Have you heard about the enormous tax savings you can reap by investing in a Maltese individual retirement arrangement or utilizing Puerto Rican captive insurance for your business? Before you invest your hard-earned money in these or other highly promoted tax schemes, you should check the IRS Dirty Dozen list...

Estimated Tax Penalties

Written by Coach Janelle CPA on March 2, 2024

The United States has a “pay as you go” tax system in which payments for income tax (and, where applicable, Social Security and Medicare taxes) must be made to the IRS throughout the year as income is earned, whether through withholding, by making estimated tax payments, or both.

New 1099-K Filing Rules Delayed Again

Written by Coach Janelle CPA on January 27, 2024

Do you sell goods or services and receive payment through a third-party settlement organization (TPSO)? If so, you must know the IRS’s new Form 1099-K reporting rules.

TPSOs include: 1, payment apps such as PayPal, CashApp, and Venmo; 2. online auction or marketplace services such as eBay and Amazon...

2023 Last-Minute Vehicle Purchases to Save on Taxes

Written by Coach Janelle CPA on December 13, 2023

Here’s an easy question: Do you need more 2023 tax deductions? If the answer is yes, continue reading. Next easy question: do you need a replacement business vehicle? If so, you can simultaneously solve or mitigate the first problem (needing more deductions) and the second problem...

Last-Minute Year-End Retirement Deductions 

Written by Coach Janelle CPA on December 8, 2023

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? If not, and if you have some cash...

Last-Minute Year-End Medical Plan Strategies

Written by Coach Janelle CPA on December 6, 2023

All small-business owners with one to 49 employees should have a medical plan for their business. Sure, it’s true that with 49 or fewer employees, the tax law does not require you to have a plan, but you should. When you have 49 or fewer employees, most medical plan tax rules are straightforward...

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