Edition 65

The gig economy has opened moneymaking avenues for taxpayers who otherwise might have trouble making ends meet. But hustling has a price: Gig jobs also ignite tax complications that many of those workers probably don’t know about. Learning about those obligations too late can cost gig workers back-tax penalties and interest. They can also result in those workers sabotaging their own tax situation and paying too much money to the government. What do gig workers need to know about their complicated tax situation?

Many taxpayers use S corporations (governed by Subchapter S of the Internal Revenue Code) or C corporations (governed by Subchapter C of the Internal Revenue Code) to legally reduce income taxes, payroll taxes, and self-employment taxes for their business. However, without careful planning, a taxpayer may have a surprise tax bill from using a corporation for federal tax purposes. This article will tell you when these unexpected tax hits can happen and how the taxpayer can avoid them with proper planning.

Sure, the Augusta Rule can be a game-changer for your finances—but only if you tread carefully. Get one element wrong—be it your business structure, purpose, or documentation—and you could be inviting the taxman to your doorstep. And don't even think about going it alone; if your tax pro isn't well-versed in this complex write-off, you're essentially rolling the dice on an audit nightmare. The Augusta Rule has lately become the talk of the town on TikTok's tax scene, capturing the attention of both amateur bloggers and seasoned tax experts. In this article, we'll demystify what the Augusta Rule really entails, identify who stands to benefit from it, explore legal ways to leverage it, and highlight potential risks you should be aware of. First, let's delve into its fundamentals. Read on to find out how to navigate this high-stakes tax strategy without detonating your financial future.

Taxes can be a maze of numbers and jargon that leave even the savviest individuals scratching their heads. But what if there was a secret method that tax professionals were using to make it all seem as easy as child's play? Introducing the ELI5 approach!