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
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
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...
Share Us On Social Media
Use In-Kind RMDs to Avoid Selling Retirement Account Assets
Written by Coach Janelle CPA on January 19, 2023
Are you 72 or older? If so, you must take a required minimum distribution (RMD) from your traditional IRA, SEP-IRA, or SIMPLE IRA by the end of the year.
If you turn 72 this year, you can wait until April 1 of next year to take your first RMD—but you’ll also have to take your second RMD by the end of that year.
Your RMD is a percentage of the total value of your retirement accounts based on your age and life expectancy. The older you are, the more you must distribute. But here’s the kicker: your RMD must be based on the value of your retirement accounts as of the end of the prior year—December 31, 2021, in the case of 2022 RMDs. So you may have a high RMD due this year even though the value of your retirement portfolio has declined, perhaps substantially.
If your retirement accounts consist primarily of stocks, bonds, or other securities, you don’t have to sell them at their current depressed levels and distribute the cash to yourself to fulfill your RMD. There’s another option: do an in-kind distribution.
With an in-kind RMD, you transfer stock, bonds, mutual funds, or other securities directly from your IRA to a taxable account, such as a brokerage account. No selling is involved. The amount of your RMD is the fair market value of the stock or other securities at the time of the transfer.
Furthermore, you still have to pay income tax on the distribution at ordinary income rates. To avoid selling any part of the stock or other securities you’ve transferred, you’ll have to come up with the cash to pay the tax from another source, such as a regular bank account.
With an in-kind distribution, not only do you avoid selling stocks in a down market, but the transfer may also reduce the taxes due on any future appreciation when you eventually do sell. This is because when you do an in-kind RMD, it resets the basis of the assets involved to their fair market value at the time of the transfer.
If you later sell, you pay tax only on the amount gained over your new basis. And such sales out of a taxable account generally are taxed at capital gains rates, not ordinary income rates.
If an in-kind distribution sounds attractive, act quickly so the transaction is completed by year-end.
Are you 72 or older? If so, you must take a required minimum distribution (RMD) from your traditional IRA, SEP-IRA, or SIMPLE IRA by the end of the year.
If you turn 72 this year, you can wait until April 1 of next year to take your first RMD—but you’ll also have to take your second RMD by the end of that year.
Your RMD is a percentage of the total value of your retirement accounts based on your age and life expectancy. The older you are, the more you must distribute. But here’s the kicker: your RMD must be based on the value of your retirement accounts as of the end of the prior year—December 31, 2021, in the case of 2022 RMDs. So you may have a high RMD due this year even though the value of your retirement portfolio has declined, perhaps substantially.
If your retirement accounts consist primarily of stocks, bonds, or other securities, you don’t have to sell them at their current depressed levels and distribute the cash to yourself to fulfill your RMD. There’s another option: do an in-kind distribution.
With an in-kind RMD, you transfer stock, bonds, mutual funds, or other securities directly from your IRA to a taxable account, such as a brokerage account. No selling is involved. The amount of your RMD is the fair market value of the stock or other securities at the time of the transfer.
Furthermore, you still have to pay income tax on the distribution at ordinary income rates. To avoid selling any part of the stock or other securities you’ve transferred, you’ll have to come up with the cash to pay the tax from another source, such as a regular bank account.
With an in-kind distribution, not only do you avoid selling stocks in a down market, but the transfer may also reduce the taxes due on any future appreciation when you eventually do sell. This is because when you do an in-kind RMD, it resets the basis of the assets involved to their fair market value at the time of the transfer.
If you later sell, you pay tax only on the amount gained over your new basis. And such sales out of a taxable account generally are taxed at capital gains rates, not ordinary income rates.
If an in-kind distribution sounds attractive, act quickly so the transaction is completed by year-end.
SAY GOODBYE TO 100 PERCENT BONUS DEPRECIATION
Written by Coach Janelle CPA on November 9, 2022
Small Call to Action Headline
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.
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.
The ERC can help all businesses that qualify, even those businesses that did not suffer during the COVID-19 pandemic.
The ERC can help all businesses that qualify, even those businesses that did not suffer during the COVID-19 pandemic.
About Coach Janelle CPA
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...
Share Us On Social Media
@coachjanellecpa
Follow me. Let's be friends!
@coachjanellecpa
Follow me. Let's be friends!
© 2021 Coach Janelle CPA. All Rights Reserved.
Sign up for our weekly newsletter
Get the latest tax planning tips content delivered straight to your inbox.