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About Coach Janelle CPA

My passion is to help 6 & 7- figure+ earners see their financial possibilities through financial literacy and strategy. 

I want to help you save on taxes so you can keep more of your money to live the life you dream of and have worked for NOW, and build wealth and equity for the next generation.

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Check Out Some Of Our Latest Blog Post

Last-Minute Section 199A Tax Reduction Strategies

Written by Coach Janelle CPA on December 28, 2022

Remember to consider your Section 199A deduction in your year-end tax planning. If you don’t, you could end up with an undesirable $0 for your deduction amount...

Last-Minute Year-End Retirement Deductions

Written by Coach Janelle CPA on December 22, 2022

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 four things to consider...

Last - Minute Year - End Medical Plan Strategies

Written by Coach Janelle CPA on December 14, 2022

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. Here are six opportunities for you to consi...

Last-Minute Year-End Tax Strategies for Your Stock Portfolio

Written by Coach Janelle CPA on December 7, 2022

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 2022 income taxes. The tax code contains the basic rules for this game, and once you know the rules, you can apply the correct strategies...

Last-Minute Year-End General Business Income Tax Deductions

Written by Coach Janelle CPA on November 30, 2022

The purpose of this letter is to get the IRS to owe you money. Of course, the IRS will not likely cut you a check for this money (although, in the right circumstances, that will happen), but you’ll realize the cash when you pay less in taxes.
Here are six powerful business tax deduction strategies you can easily...

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Section 1031 Exchanges vs. Qualified Opportunity Zone Funds

Written by Coach Janelle CPA on January 13, 2023

Have you sold, or are you planning to sell, commercial or rental property?


To avoid immediately paying capital gains tax on your profit, you have options:


         1. Defer the capital gains tax using a Section 1031 exchange
         2. Defer the capital gains tax using a qualified opportunity zone fund


With a Section 1031 Exchange, you sell your property and invest all the proceeds in another like-kind replacement property of equal or greater value.


With a Qualified Opportunity Fund, you don’t acquire another property. Instead, you invest in a corporation, partnership, or LLC that pools money from investors to invest in property in areas designated by the government as qualified opportunity zones. Most qualified opportunity funds invest in real estate.


Which is better? It depends on your goals. There is no one right answer for everybody.


A Section 1031 exchange is preferable to a qualified opportunity fund investment if your goal is to hold the replacement property until death, when your estate will transfer it to your heirs. They’ll get the property with a basis stepped up to current market value, and then they can sell the property immediately, likely tax-free.


In contrast, your investment in a Qualified Opportunity Fund requires that you pay your deferred capital gains tax with your 2026 tax return. That’s the bad news (only four years of tax deferral).


The good news: if you hold the qualified opportunity fund for 10 years or more, there’s zero tax on the appreciation.


In contrast, if you sell your Section 1031 replacement property, you pay capital gains tax on the difference between the original property’s basis and the replacement property’s sale amount.


And if you’re looking to avoid the headaches and responsibilities that come with ownership of commercial or rental property, the qualified opportunity fund does that for you.


If you’re looking for liquidity, the qualified opportunity fund gives you that because you need to invest only the capital gains to defer the taxes. With the Section 1031 exchange, you must invest the entire sales proceeds in the replacement property to avoid any capital gains tax.


Of course, you want your investment to perform. Make sure to do your due diligence, whatever your choice.
 

SAY GOODBYE TO 100 PERCENT BONUS DEPRECIATION 

Written by Coach Janelle CPA on November 9, 2022

All good things must come to an end. On December 31, 2022, one of the best tax deductions ever for businesses will end: 100 PERCENT BONUS DEPRECIATION.

Since late 2017, businesses have used bonus depreciation to deduct 100 percent of the cost of most types of property other than real property. But starting in 2023, bonus depreciation is scheduled to decline 20 percent each year until it reaches zero in 2027.


For example, if you purchase $100,000 in equipment for your business and place it in service in 2022, you can deduct $100,000 using 100 percent bonus depreciation. If you wait until 2023, you’ll be able to deduct only $80,000 (80 percent).


Does this mean you should rush out and purchase business property before 2022 ends to take advantage of the 100 percent bonus depreciation? Not necessarily. For many businesses, an alternative is not going away: IRC Section 179 expensing. Both IRC SECTION 179 EXPENSING and BONUS DEPRECIATION allow business owners to deduct in one year the cost of most types of tangible personal property, plus off-the-shelf computer software. 

Both can be used for new and used property acquired by purchase from an unrelated party. Both also can be used to deduct various non-structural improvements to non-residential buildings after they are placed in service. Moreover, the two deductions aren’t mutually exclusive. You can apply Section 179 expensing to qualifying property up to the annual limit and then claim bonus depreciation for any remaining basis. Starting in 2023, when bonus depreciation will be less than 100 percent, any basis left after applying Section 179 and bonus depreciation will be deducted with regular depreciation over several years.

Generally, there is no great need to purchase and place the property in service by the end of 2022 to take advantage of 100 percent bonus depreciation. But there can be exceptions.


For example, if you own a rental property and want to make substantial landscaping or other land improvements, you’ll get a larger one-year depreciation deduction using 100 percent bonus depreciation in 2022 than if you wait until 2023, when the bonus will be only 80 percent.
 

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Claim Your Employee Retention Credit  

Written by Coach Janelle CPA on November 24, 2022

If you had W-2 employees in 2020 and/or 2021, you need to look at the Employee Retention Credit (ERC). As you likely know, it’s not too late to file for the ERC. And now is a good time to get this done. You can qualify for 2020 credits of up to $5,000 per employee and 2021 credits of up to $7,000 per employee for each of the first three quarters. That’s a possibility of $26,000 per employee.

One of our clients—let’s call him John—had 10 employees during 2020 and 2021. He qualified for $260,000 of tax credits (think cash). You could be like John.

You claim and adjust the ERC using IRS Form 941-X, which you can file anytime on or before March 15, 2024, if you file your taxes as a partnership or an S corporation, or April 15, 2024, if you file on Schedule C of your Form 1040 or as a C corporation.

You have three ways to qualify for the ERC:


Significant Decline In Gross Receipts 

Here, you compare the gross receipts quarter by quarter to those in 2019. To trigger any ERC under this test, you need a drop of more than 50 percent in 2020 and a drop of more than 20 percent in 2021.

Government Order That Causes More Than A Nominal Effect

Here, your best bet is to use the safe harbor for nominal effect. This requires looking at either your 2019 quarterly receipts or your 2019 quarterly hours worked by employees and seeing that the 2020 or 2021 shutdown order would have affected the 2019 figures by more than 10 percent.

Government Order That Causes Modification To Your Business

Here, you also have a safe harbor. The IRS deems that the federal, state, or local COVID-19 government order had a more-than-nominal effect on your business if it reduced your ability to provide goods or services in the normal course of your business by not less than 10 percent.

The ERC can help all businesses that qualify, even those businesses that did not suffer during the COVID-19 pandemic.     

About Coach Janelle CPA

My passion is to help 6 & 7- figure+ earners see their financial possibilities through financial literacy and strategy. 

I want to help you save on taxes so you can keep more of your money to live the life you dream of and have worked for NOW, and build wealth and equity for the next generation.

Sign Up To Our Weekly Newsletter

Get the latest tax planning tips content delivered straight to your inbox.

 All Your Information is Protected When You Sign Up

Check Out Some Of Our Latest Blog Post

Buying an Electric Vehicle? Know These Tax Law Changes

Written by Coach Janelle CPA on November 21, 2022

There’s good and bad news if you’re in the market for an electric or plug-in hybrid electric vehicle. The good news is that the newly enacted Inflation Reduction Act includes a wholly revamped tax credit for electric vehicles that starts in 2023 and continues through 2032. 

Say Goodbye To 100 Percent Bonus Depreciation

Written by Coach Janelle CPA on November 9, 2022

All good things must come to an end. On December 31, 2022, one of the best tax deductions ever for businesses will end: 100 PERCENT BONUS DEPRECIATION.
Since late 2017, businesses have used bonus depreciation to deduct 100 percent...

The New 62.5 Cents Mileage Rate

Written by Coach Janelle CPA on August 29, 2022

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 Decem...

Self-Employment Taxes for Partners and LLC Members

Written by Coach Janelle CPA on August 20, 2022

Does a member of a limited liability company (LLC) or a partner in a partnership have to pay self-employment taxes on the member’s or partner’s share of the entity’s income? Incredibly, the answer is not alw...

Paying Your Child: W2 or 1099?

Written by Coach Janelle CPA on August 8, 2022

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 pay her about $12,000 this year. Do I pay her through payroll checks and file a...

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© 2021 Coach Janelle CPA. 
All Rights Reserved.

Follow me on socials

Sign up for our weekly newsletter

Get the latest tax planning tips content delivered straight to your inbox.

© 2021 Coach Janelle CPA. 
All Rights Reserved.

Follow me on socials

Sign up for our weekly newsletter

Get the latest tax planning tips content delivered straight to your inbox.