Smart Solutions That Decrease Social Security and Medicare Taxes

Written by Coach Janelle CPA on August 28, 2024

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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.

Here are four key points to consider: 1. C corporations can provide long-term care insurance as a fully deductible, tax-free benefit to owners.

2. Sole proprietors or single-member LLCs with a spouse as the only employee may be able to deduct 100 percent of the premiums through a Section 105-HRA plan...

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. 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...

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...

Last-Minute Year-End General Business Income Tax Deductions

Written by Coach Janelle CPA on November 25, 2023

The purpose of this article is to reveal how you can 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...

Tax-Free Rental Income with the Augusta Rule

Written by Coach Janelle CPA on November 1, 2023

The Augusta rule gets its name from the Masters Golf Tournament, where some members and others who live in the area receive tax-free rent by renting their homes for a week or two. You don’t have to live in Augusta to benefit from this rule...

Deduct Travel by Car, Train, Plane, or Boat

Written by Coach Janelle CPA on October 25, 2023

Say you are going to travel from your home in Washington, D.C., to San Francisco. Will the tax law allow you to travel to San Francisco by car, train, plane, or boat, your choice? Answer. Yes. But special rules apply. You need to know these rules to guarantee your deductions...

Donating Clothing to Goodwill and the Salvation Army

Written by Coach Janelle CPA on October 18, 2023

As the year comes to a close, many taxpayers consider making clothing and household item donations both to give back and to optimize their tax deductions. Recent cases, like the one involving Duncan Bass, underscore the significance of understanding and adhering to IRS regulations related to these contributions...

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