Is Your Sideline Activity Considered a Business or a Hobby?
Do you have a sideline activity that you think of as a business? From this sideline activity, are you claiming tax losses on your Form 1040? Will the IRS consider your sideline a business and allow your loss deductions? If you have such an activity, we should have your attention. The IRS likes to claim […]
Self-Employment Taxes for Partnerships and LLCs?
Here’s a question: Does a member of a limited liability company (LLC) or a partner in a partnership have to pay self-employment taxes (Social Security and Medicare tax) on the member’s or partner’s share of the entity’s income? Incredibly, the answer is not always clear. If you are a general partner in a general partnership, […]
Converting Your Partnership into an S Corporation Tax-Free
Let’s say you’re considering converting your partnership into an S corporation. The reason might be to reduce exposure for you and the other owners to Social Security and Medicare taxes, which come in the form of the self-employment tax for partners. Specifically, each partner’s share of net partnership income is usually fully exposed to the […]
Deducting Start-Up Costs For Your Rental Property
Are you interested in becoming a commercial or residential landlord? Understanding Deducting Start-Up Costs For Your Rental Property is essential. If so, you’ll likely have to shell out plenty of money before ever collecting a dime in rent. The tax code treats some of those monies as start-up expenses for your rental property, so knowing […]
The Limitations on IRS Audits and Tax Assessments
Nobody wants to spend their whole life looking over their shoulder, wondering if the IRS will audit them. Luckily, there is a statute of limitations on IRS audits and tax assessments. Once the limitations period expires, the IRS can’t audit your return or assess any additional tax. You may have heard that the statute of […]
IRAs For Young Adults: The Basics
As we navigate the complexities of financial planning, one opportunity stands out for young adults: individual retirement accounts (IRAs). With the 2023 tax-year contributions deadline fast approaching, on April 15, 2024, now is the perfect time to consider how you can leverage an IRA. Traditional and Roth IRAs: A Brief Overview Both traditional and Roth […]
The Tax Implications of Dual Citizenship
Many individuals either contemplate or hold citizenship in more than one country. While dual citizenship can offer many benefits, such as enhanced travel mobility, access to social services, and the ability to work and reside in both countries, be sure you are aware of the tax implications of dual citizenship. As a current or potential […]
Qualified Improvement Property: What You Need to Know
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 Sections 1245 and 1250 ordinary income recapture and other factors. Planning your depreciation methods can significantly impact your current tax liabilities and long-term taxable […]
Estimated Tax Penalty: What Is It & How To Avoid
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. You suffer an estimated tax penalty if […]
Working Overtime? Don’t Miss Out on this Fringe Benefit
Tax law often discriminates against company owners, granting them no or fewer fringe benefits. But you, the owner, are not discriminated against when it comes to supper money. It works like this: That means you can take this benefit for yourself, even as a sole proprietor. You also qualify for this benefit if you operate […]