A really neat thing happens when you turn 70 and ½. Your IRAs essentially turn into donor advised funds if you don’t need all the money in them to make ends meet. Rather than withdraw money from your IRA to make charitable contributions, you can make them out of the IRA. So instead of an itemized deduction, you get an exclusion from adjusted gross income. For some people this might be a wash, but for most it probably isn’t. Besides the possibility of not being over the standard deduction threshold, there are a host of computations and thresholds that involve AGI. There are some things you need to watch out for, but first let’s go over the basics.

In the accounting field, where client relationships and personalized service are paramount, understanding and segmenting your client base must be a priority. As the accounting landscape evolves and clients diversify, a tailored approach to client segmentation becomes indispensable. Clients are no longer interested in a one-size-fits-all approach to sales and marketing. Therefore, as an accountant and a firm owner, you must adopt a targeted approach tailored to different customer segments' unique needs and characteristics. In this article, I will delve into the importance of client segmentation within accounting firms and provide insights into implementing this strategy so you can drive growth and enhance your client satisfaction.

Launched as a beta in February 2024, the Adobe AI Assistant is a generative AI-powered conversational engine feature within Adobe Acrobat. The app enables you to “chat” with PDF files in natural language and unlock new levels of document productivity. The AI Assistant can be likened to a knowledgeable librarian for digital documents. Just as a librarian assists you in finding the right books, navigating through complex archives, and answering detailed inquiries about content, the AI Assistant helps users navigate, understand, and extract key information from PDF documents. It provides summaries, clarifies content through answers and suggestions, and links to relevant sections, all designed to make your interaction with digital documents as enriching and efficient as a visit to a well-staffed library.

Some clients marry into tax trouble – and then have no clue how to get out. Others are on the cusp of a separation or divorce and want the uncoupling (at least in the eyes of tax authorities) to start ASAP. Few clients who need the IRS tool called “innocent spouse relief” to unshackle themselves from a spouse’s tax mess (either one that spouse brought to the marriage or one they racked up later) seem to know about it. Here’s what to tell such a client about what this relief does and does not cover and what your client will have to prove before they can qualify – as well as how difficult this relief can be to get.

No dramatic developments this month, but some technical inputs worth noting. A good practitioner is always learning; it's so much better to learn from other peoples' mistakes than one's own.

The concept of cost segregation began in the 1960s, when taxpayers argued specific components of real estate had a shorter life than the depreciation tables allowed (39 years for commercial property and 27.5 years for residential real estate). After decades of legal cases, the IRS provided rules and safe harbors in 1996 and 2002. Taxpayers now can use cost segregation and remain compliant with IRS regulations. The real question now is: Does a cost segregation study really reduce a taxpayer’s liability? And if so, by how much?

Today I want to talk about the quick question, “Can I rent my home to my business tax free?” The answer is not straightforward. It takes time to look at the specific set-up of that taxpayer's business. It requires a bit of research. You need to know things like: ● What's the fair market value of renting your home? ● How many days will you rent your home to your business? ● Can we substantiate that this rental is ordinary and necessary? Amber Gray-Fenner already did an excellent job of explaining the Augusta Rule in an earlier issue of the newsletter. So, I won't go over all the same points. I want to look at what the Augusta Rule is and how it came about. Then, we'll look at three takeaways for you to remember in your practice and give to your clients.

Even your most financially savvy client isn’t going to think clearly after the death of their spouse. Taxes will be last on their minds. That’s where you’ll come in, nudging them toward tax and money moves both immediate and long-term, from filing returns to budgeting income to taking a step-up in basis. Above all, don’t assume grieving clients know these details or that they’ll remember them in one of life’s toughest moments.