irs representation: TCJA Winners and Losers—Business on the Chopping Block - 12/16/24 10:38 AM
Prepare for tax changes.
The Tax Cuts and Jobs Act (TCJA) has been part of our tax landscape for nearly seven years, shaping how businesses and individuals plan their finances. With an eye toward the end of 2025, when many key provisions expire, here are some critical changes that could affect you and your business.
Expiring Provisions: Mixed News for Businesses
Some of the most impactful changes, including lower individual tax rates and the qualified business income (QBI) deduction, are slated to sunset after 2025. Here are some highlights:
Lower individual tax rates. Rates under the TCJA are generally lower, but thresholds for higher … (1 comments)

irs representation: U.S. Supreme Court Makes It Easier to Challenge IRS Regulations - 12/16/24 10:35 AM
Over the years, the IRS has enacted voluminous regulations that interpret ambiguous tax code provisions or fill in administrative gaps.
Indeed, IRS regulations dwarf the tax code: the tax code is about 2,600 pages long, while all the rules written by the IRS amount to over 16,000 pages.
Think an IRS regulation is unfair or overreaches? Until now, there wasn’t much you could do about it. A 40-year-old legal rule called Chevron deference (or the Chevron doctrine) required courts to defer to government regulations so long as they were reasonable. After all, the IRS and other federal agencies were the experts.
Because of … (2 comments)

irs representation: Tax Credits for EVs: What’s New? - 12/16/24 10:32 AM
If you’re in the market for a new car, the federal government would like you to purchase an electric vehicle (EV) or a plug-in hybrid EV (PHEV).
In 2022, Congress enacted the Inflation Reduction Act, which revamped and expanded tax credits for EVs purchased during 2023 and later.
As a result of the new law, there are four ways you can benefit from a federal EV tax credit:
Purchase an EV and claim the clean vehicle credit. Purchase a used EV that qualifies for the previously owned clean vehicle credit. Purchase an EV for business use and claim the commercial clean … (2 comments)

irs representation: 2024 Year-End Tax Strategies for Crypto Investors - 12/16/24 10:28 AM
2024 has been a great year for investors in cryptocurrency, with Bitcoin reaching all-time highs.
With high profits, however, can come high taxes. Fortunately, there are several strategies you can employ before year-end to reduce your 2024 crypto taxes.
If you invested only in Bitcoin, you may not have any crypto losses.
But you could have losses if you invested in other forms of crypto. If so, you should consider selling your losers before the end of the year. You may fully deduct your losses from any capital gains you realize during the year, such as gains from selling other crypto or stocks … (0 comments)

irs representation: HSA secrets for seniors: contributions beyond age 65 - 10/23/24 10:29 AM
Do you have a health savings account (HSA)?
If so, you have one of the best tax-advantaged accounts. HSAs provide a unique triple tax benefit:
Pre-tax contributions are tax-deductible. The money in the HSA is invested and grows tax-free (just like in an IRA). Withdrawals to pay medical bills are tax-free. Indeed, there is only one thing wrong with HSAs: you cannot make contributions after you enroll in Medicare (usually at age 65).
If you love HSAs as much as we do, you probably would like to continue contributing to your HSA after age 65. Here’s good news: some people … (3 comments)

irs representation: Know the Three Ways the Tax Law Treats Personal Property Rentals - 10/23/24 10:21 AM
Here are some key points about renting personal property, which includes equipment, vehicles, and furniture. The tax treatment differs from real estate rentals, and how you classify the rental activity will affect how you report income, expenses, and potential self-employment tax.
Classification of Personal Property Rentals
The tax code treats personal property rentals in three ways:
Business. If your primary purpose is to earn income and the activity is continuous, it is considered a business. You must report the income on Schedule C, subject to self-employment tax. For-profit activity. If the rental is profit-motivated but sporadic, it’s a for-profit activity. You report the … (2 comments)

irs representation: Three Possible Ways to Deduct Your Dog or Cat - 10/23/24 10:16 AM
Dogs, cats, and other household pets are expensive. Owners spend an average of $1,270 to $2,800 a year to own a dog. Can you ever deduct these costs from your taxes?
The expenses for a family pet that provides you only with love and companionship are never deductible. They are purely personal expenses.
But it is possible to deduct the expenses for a dog, a cat, or another animal if it qualifies as a
medical expense business expense, or charitable deduction. The costs of buying, training, and maintaining a dog or another animal qualify as deductible medical expenses if you
use … (7 comments)

irs representation: Got IRS Penalties? Know the Rules, Pay Nothing - 10/23/24 10:12 AM
If the IRS has recently claimed that you owe a penalty for late filing, late payment, or missed employment tax deposits, pause before making any payment. You may not have to pay that penalty at all.
The IRS often imposes steep penalties for filing tax returns late, failing to pay taxes on time, or not depositing employment taxes correctly. However, several strategies can help you get those penalties removed—and in some cases, even refunded if you have already paid them.
Common IRS Penalties and Their Impact
Some of the most common penalties include:
Late filing penalty. For individual or C corporation returns, this can … (3 comments)

irs representation: Understanding Tax Non-Filing: What It Means and Issues to Consider - 09/25/24 12:31 PM
In the complex world of taxes, some individuals may find themselves classified as "non-filers." These are people who, for various reasons, haven't submitted their tax returns to the government. While it may seem harmless or unimportant to skip filing, there are significant risks and considerations that non-filers need to understand. Let's explore the consequences, reasons for non-filing, and the key points anyone in this situation should keep in mind.
Who Is a Tax Non-Filer?
A tax non-filer is someone who, for whatever reason, does not submit a tax return by the due date or fails to do so altogether. While some individuals are … (2 comments)

irs representation: Employee Retention Credit (ERC) Update - 09/20/24 11:47 AM
Here’s a recent update on the Employee Retention Credit (ERC) and the new IRS payback scheme.
New IRS ERC Payback Program
The IRS introduced a second ERC Voluntary Disclosure Program for 2021 claims. Under this program, you can say, “I didn’t deserve the ERC, so I’ll repay 85 percent of my claimed ERC and retain 15 percent tax-free.”
The program is available only for ERC claims from 2021, and there are specific eligibility requirements. If you claimed the ERC using a third-party payer, the third party must apply on your behalf.
Eligibility Criteria for Payback
You must not be under criminal investigation or an IRS employment … (1 comments)

irs representation: BOI Reporting Deadline Is Closing In - 09/20/24 11:29 AM
The clock continues to tick. Here are the upcoming deadlines for filing your Business Ownership Information (BOI) reports with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).
Deadlines
If your business existed as of January 1, 2024, you must file your BOI report by January 1, 2025.
If you created your business in 2024, you have 90 days from the date of filing with your state’s Secretary of State to submit your BOI report.
Entities Required to File
All limited liability companies (LLCs) and corporations must file. For example, if you own multiple LLCs, each requires a separate BOI report.
Penalties for Non-compliance
Failure … (1 comments)

irs representation: 13 Answers on the new 2024 CTA Required BOI reporting to FinCEN - 08/30/24 08:36 AM
The Corporate Transparency Act (CTA) is upon us. It takes effect on January 1, 2024, and imposes a new federal filing requirement for most corporations, limited liability companies (LLCs), and other business entities.
Corporations, LLCs, and other entities subject to the CTA are called “reporting companies.” People who form new reporting companies must file a beneficial ownership information (BOI) report with the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) within 90 days of forming the company.
The owners of reporting companies created before 2024 must also file a BOI report, but they have until January 1, 2025 (but think December … (1 comments)

irs representation: Smart Solutions That Decrease Social Security and Medicare Taxes - 08/23/24 12:53 PM
Here are some important updates and strategies regarding Social Security and Medicare taxes that may significantly impact your business.
For 2024, the Social Security tax ceiling increased to $168,600, resulting in a maximum Social Security tax of $20,906 for high earners. The Social Security Administration projects this ceiling to rise annually, reaching $242,700 or more by 2033. Additionally, the government adds a 2.9 percent Medicare tax to all wages and self-employment income, with an extra 0.9% for high-income earners.
If you’re self-employed, these taxes can be particularly burdensome. Here are three strategies that can potentially reduce your tax liability:
Operate as an S … (4 comments)

irs representation: Deducting Long-Term Care Insurance Premiums - 08/23/24 12:49 PM
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:
C corporations can provide long-term care insurance as a fully deductible, tax-free benefit to owners. 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. S corporation owners, partners, and other sole proprietors may be able to deduct premiums … (5 comments)

irs representation: What to do about an IRS final notice - 07/16/24 01:15 PM
While a final notice from the IRS can be intimidating and stressful, there are options to solve your problem and prevent unexpected levies of bank accounts, paychecks, and other assets. To do so, you will need to quickly act.   
This IRS final notice can be Letter 11 (LT 11), CP 90 or Letter 1058, depending on which area of the IRS is handling your case. No matter which of these three letters you receive, they are basically all the same, and have the same purpose. This critical notice advises the taxpayer of certain rights as well as time to resolve their case. … (3 comments)

irs representation: What is currently not collectible status? - 07/16/24 12:53 PM
The IRS (Internal Revenue Service) uncollectible status, formally known as Currently Not Collectible (CNC), is a designation given to taxpayers who are unable to pay their tax debt due to financial hardship. When a taxpayer is classified as Currently Not Collectible, the IRS temporarily suspends collection actions against them.
Here are some key points about IRS uncollectible status:
Financial Hardship: To qualify for Currently Not Collectible status, the taxpayer must demonstrate that paying their tax liability would cause significant financial hardship. This is typically assessed by providing detailed financial information to the IRS. Temporary Status: CNC status is not a permanent solution … (5 comments)

irs representation: Tax deductions for investment in raw land - 07/15/24 09:57 AM
Purchasing raw (unimproved) land can be a great way to get into real estate investing.
Raw land is ordinarily cheaper than land with buildings and other improvements. Moreover, you don’t have the expense of handling building maintenance and other upkeep, not to mention the headaches of dealing with tenants if you rent improved property.
But the tax benefits for owning raw land as an investor are much more limited than for improved property. Some expenses are deductible as itemized personal deductions. Many others aren’t deductible at all. Moreover, if you don’t itemize, you get no immediate benefit from your deductions.
Here’s what … (3 comments)

irs representation: Shutting down your S Corporation - 07/15/24 09:52 AM
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.
Scenario 1: Stock Sale
One way to shut down an S corporation is to sell all your company stock. The gain from selling S corporation stock generates a capital gain. Long-term capital gain tax rates apply if you held the shares for more than a year. The maximum federal rate for long-term capital gains is … (4 comments)

irs representation: Know the 12 exceptions to the 10% penalty on early IRA withdrawals - 07/15/24 09:40 AM
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, I have outlined the key exceptions that may apply to your situation.
Substantially equal periodic payments. You can arrange for a series of substantially equal periodic payments. This method requires careful calculation and adherence to strict rules but allows penalty-free withdrawals.
Medical expenses. Withdrawals for medical expenses exceeding 7.5 percent of your adjusted gross income, or AGI, are exempt from the … (3 comments)

irs representation: Cost segregation - a great strategy when? - 06/03/24 10:41 AM
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.
“Cost segregation” is the technical term for separately depreciating the elements of property that are not real property. These are elements other than land, buildings, and … (3 comments)