taxes: Does No 1099 in Redlands, Mean No Deduction for You?
- 01/11/20 10:41 AM
Redlands, CA - Imagine this: you didn’t issue Form 1099s to your contractors. Now, the IRS is auditing your tax return, and the auditor claims you lose your deductions because you didn’t issue the Form 1099s. Is this correct?
No. IRS auditors often make this claim, but they are incorrect.
There is no provision in the federal tax law that denies you a deduction for labor expenses simply because you didn’t file the required Form 1099s. But the tax court has stated that the non-filing of required Form 1099s can cast doubt on the legitimacy of the deduction claimed.
As with any deduction claimed … (0 comments)
taxes: How to Make the $100-a-day Penalty Non-Applicable
- 02/10/19 07:12 AM
You may have wondered why an S corporation can pay for or reimburse a solo owner-employee’s individually purchased health insurance without worrying about the $100-a-day penalty.
The answer is that the S corporation’s payments of the solo shareholder-employee’s individual health insurance premiums are exempt from the $100-a-day penalty.
The exemption does not apply to health coverage for the rank-and-file employees. For the rank and file, you need either
a qualified small-employer health reimbursement arrangement (QSEHRA), or group health insurance.
If you would like me to review your health coverage for compliance with the tax rules, please call me on my direct line at 909-570-1103 by email … (0 comments)
taxes: Where Should You Put It In 2019?
- 02/10/19 07:01 AM
Since we’ve still got a little time before tax season really kicks in, I thought I’d share a few things that the recent drama in the stock market has reminded me of, especially when it comes to 401(k)s and how they relate to salaried and hourly employees. For starters, most every employer-sponsored plan is a “choose your own adventure” for the employees, so now is a great time to actually look at where you are and if the stock market trouble is even an issue for you right now. Most investors put at least a little thought into their asset allocation during … (3 comments)
Your Section 199A tax deduction will benefit from your business’s W-2 wages paid to you and your employees if you
are married and filing jointly and your taxable income is over $315,000 and less than $415,000; are filing as single or head of household and your taxable income is over $157,500 and less than $207,500; or have an in-favor business and your taxable income is greater than $415,000 (married, filing jointly) or $207,500 (filing as single or head of household).
If you are above the $415,000/$207,500 threshold with no wages and no property, your Section 199A tax deduction … (0 comments)
Under the trade or business rule, your rental property profits can create the deduction.
And now, under an alternative rule, you can use the newly created IRS safe harbor to make your rentals qualify for the deduction.
When you meet the new safe-harbor rules, the IRS deems your rental a trade or business with net rental profits that are qualified business income (QBI) for the Section 199A tax deduction.
I’ve included below six action steps for 2018 that can help you reduce your taxes and pocket extra money.
Put your retirement plan in place no later than December 31 so you are absolutely sure that you have a plan. In fact, be sure to make a contribution to the plan before December 31.
Convert to a Roth IRA. The long-term savings here can be huge. Make sure to leave the … (0 comments)
taxes: Take Money Out of Your IRA at Any Age Penalty-Free
- 11/13/18 04:35 AM
You probably think you can’t take money out of your IRAs before age 59 1/2 unless you meet a narrow exception to the unpleasant 10 percent penalty on early distributions. But that’s not true. We have a variety of planning opportunities here. For example, you don’t pay taxes or the 10 percent penalty on amounts you withdraw that you previously contributed or converted to the Roth IRA. These amounts are your “basis” in the Roth IRA. (Remember, you funded your Roth IRA with after-tax money!) The law says Roth distributions come out in the following order: regular contributions, rollover contributions, and finally earnings. … (0 comments)
taxes: Drive Time Increases Odds of Deducting Rental Property Losses
- 11/13/18 04:09 AM
Your rental properties provide tax shelter when you can deduct your losses against your other income. One step to deducting the losses is to pass the tax code’s 750-hour test. And one step to finding the hours you need to pass the time test may be your drive times. Trzeciak Case Mariam Trzeciak owned, managed, and rented 14 single-family homes in and near Columbus, Ohio. She and her husband, Marc, on their joint tax returns claimed rental property losses of $126,376 and $151,884 in the two years that were subject to this IRS audit. The IRS revenue agent assigned to examine the Trzeciaks’ returns … (0 comments)
taxes: Drive Time Increases Odds of Deducting Rental Property Losses
- 11/13/18 04:08 AM
Your rental properties provide tax shelter when you can deduct your losses against your other income. One step to deducting the losses is to pass the tax code’s 750-hour test. And one step to finding the hours you need to pass the time test may be your drive times. Trzeciak Case Mariam Trzeciak owned, managed, and rented 14 single-family homes in and near Columbus, Ohio. She and her husband, Marc, on their joint tax returns claimed rental property losses of $126,376 and $151,884 in the two years that were subject to this IRS audit. The IRS revenue agent assigned to examine the Trzeciaks’ returns … (0 comments)
Redlands, CA - Imagine this: you didn’t issue Form 1099s to your contractors. Now, the IRS is auditing your tax return, and the auditor claims you lose your deductions because you didn’t issue the Form 1099s. Is this correct?
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