CURRENT EDITION
2025 Tax Surprises You Shouldn’t Overlook
There are a few tax rules new for 2025 that may catch some individuals and their tax advisers by surprise. These changes have not received lots of attention either because they are overshadowed by related changes that are more significant, or they were enacted a few years back with a future effective date that arrives in 2025. This article covers changes for 2025 that you will want to be sure to share with clients to avoid surprises at a later date.
READ MOREEverything You Need to Know About the Fair Tax and More
As you are in the heat of another tax season, probably without enough help, you don’t have time to study legislation especially proposed legislation prospectively effective in 2025 that is extremely unlikely to pass. But you may have clients or friends or relatives who expect you to know about this sort of thing. Fortunately, you have me who retired from active practice right at the end of 2018 and has time for this sort of nonsense. So here is more than you need to know about the proposed Fair Tax Act of 2023.
Read MoreYes, Virginia, There is a Tax Bankruptcy!
In society, bankruptcy no longer carries the humiliating stigma of failure ; which is why there are hundreds of thousands of bankruptcy filings each year. Interestingly enough, filings have been dropping dramatically since 2018. The total individual and business filings for fiscal year 2022 are nearly half of those from 2018. The statistics don’t include specific information about how much tax debt was extinguished in bankruptcy. Filing bankruptcy is not for everyone. It can be a viable option for those people whose tax debt meets certain criteria. The following is a basic overview of the concept...
Read MoreNavigating the Crypto Collapse
Many taxpayers lost substantial amounts of money in the crypto collapse of 2022, but what tax consequences come with that loss? Taxpayers may be expecting to be able to deduct the full amount of their crypto losses, and may, unfortunately, find out it isn’t as straightforward as they would like...
Read MoreImportant to Maintain Substantiation for Carryovers
If you build a mini business empire and it subsequently fails, a small consolation prize might be a net operating loss carryover that will shelter some or all of your more modest income for many years. Of course NOLs are only one among many carryovers that need tracking. In my experience the tracking often leaves much to be desired. Changes in tax preparers or even software can result in the loss of valuable carryovers. But that is not the worst of it...
Read MoreJust Good Business – Find Your Audience
The first rule of good writing is “Know your audience.” I would argue that this rule applies to your tax practice as well. Tax professionals, it's time to find your audience. If you want to be the best tax professional you can be, while preserving your physical and mental health, take a moment (or several) to define your ideal client. Your ideal client is your audience. Deciding which clients you want to work with will serve you well during tax season and beyond...
Read MoreInflation Reduction Act 2022 Energy Tax Incentive Considerations
The Inflation Reduction Act of 2022 (P.L. 117-169; 8/16/22) could easily have been named the Energy Incentives Act of 2022. Over 20 provisions in the Act provide tax credits or special deductions to encourage the production and use of clean energy. The cost of these energy provisions over ten years is about $271 billion. In contrast, the ten-year revenue projection for the corporate AMT and one percent excise tax on certain stock buybacks is about $296 billion. Most of the energy credits are for businesses and are specialized such as for the production of clean hydrogen or sustainable aviation fuel or zero-emission nuclear power production. Four credits are designed for individuals including three revised credits and one entirely new one (§25E, Previously-owned clean vehicle credit). This article highlights key aspects of the credits and special energy provisions as a whole, offers tips for dealing with the complexities that exist in these IRA 2022 rules, and provides suggestions to help individuals obtain the greatest tax savings from the new and revised energy credits and rebates. A few charts are included to aid in understanding these credits.
Read More“Retired” CPAs Touring America in an RV
I recently wrote a sort of case study to illustrate the economics of RV tourism . I thought that my fellow tax pros might appreciate a little more analysis of the numbers. I also have some observations on working out of an RV, because I wasn’t actually entirely retired...
Read MorePotential Pitfalls of Digital Assets and the “Kiddie Tax”
Those of us who are parents of Gen Z children know it’s “no cap ” that we have no clue what our children get up to on the internet. My son, for example, makes a lot of YouTube videos of our cat for some reason. Thankfully, he hasn’t monetized his videos (yet!), so they don’t carry any tax consequences. However, many taxpayers are finding out that their dependents have spent their time in the metaverse, defi gaming, or nfts, and as a result have engaged in dozens to thousands of taxable transactions without even being aware it. Those transactions may also trigger the “Tax on a Child's Investment and Other Unearned Income,” also known as the “Kiddie Tax.” Read on to learn more...
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CURRENT EDITION
2025 Tax Surprises You Shouldn’t Overlook
There are a few tax rules new for 2025 that may catch some individuals and their tax advisers by surprise. These changes have not received lots of attention either because they are overshadowed by related changes that are more significant, or they were enacted a few years back with a future effective date that arrives in 2025. This article covers changes for 2025 that you will want to be sure to share with clients to avoid surprises at a later date.
Leaving the United States, Part I: Expats
When Americans speak of leaving America, they generally are expressing a desire to live elsewhere in the world for cultural reasons or due to cost of living. These people are called expatriates, aka expats. For clarity, a mere visit to another country does not make you an expat. To be an expat, the move needs to be long-term and often includes working or retiring in the new country. Expats live somewhere outside the U.S., but still have a tax obligation to the U.S. and possibly the country they move to. That will be the focus of this article.
Tax Preparer Hit with Stiff Sentence
John Anthony Castro is a colorful character. He entered several Republican primaries seeking the Presidential slot after failing to win the primary for a Senate seat representing Texas. He sued to have our once and future President Donald Trump be removed from the ballot on Fourteenth Amendment Section 3 grounds. As we can easily infer, those suits went nowhere. But more than anything, John Anthony Castro was a tax guy with a virtual practice with locations in four cities. Not anymore. Now he is resident in a Bureau of Prisons facility – the Federal Medical Center Fort Worth. On October 30, 2024, Judge Terry Means sentenced Castro to 188 months in prison, followed by one year of supervised release and restitution of $277,243, following his conviction on 33 counts of “Aiding and Assisting in the Preparation and Presentation of a False and Fraudulent Return.” Does the sad story of John Anthony Castro hold any lessons for us? Perhaps.