Articles Archive - Page 60 of 61 - Think Outside the Tax Box

Articles

Reduce Taxable Income Up to $25,000 with Passive Rental Losses

Leave a Comment / By

You have likely heard that owning rental real estate provides great tax benefits. This is true for a multitude of reasons, but there’s one benefit that is arguably the best of the bunch: The Small Taxpayer Allowance for Deducting Passive Rental Losses.

Based on average household income levels, more than three-quarters of taxpayers can potentially qualify for this fantastic tax benefit that offers taxable income reduction of up to $25,000.

Reduce Taxable Income Up to $25,000 with Passive Rental Losses Read More »

Extra Taxes on S Corporation Distribution?

Leave a Comment / By

My client plans to take about $15,000 in distributions in excess of his basis from his S corporation construction business. I know this generates tax for him. He’s in the 32 percent tax bracket and single. Does he also have to pay the 3.8 percent net investment income tax and the 0.9 percent additional Medicare tax on this amount? Is there a way for him to avoid taxes on this amount?

Extra Taxes on S Corporation Distribution? Read More »

Five Tax Reduction Strategies for the Casual Cryptocurrency Owner

Leave a Comment / By

With so many people looking for more ways to make money outside their 9 to 5 jobs, many are turning to money making methods using technology including trading in cryptocurrency.
For tax purposes, the IRS considers cryptocurrencies property, not as currency. Just like other property types, stocks, investments, or real estate, when you sell, swap, or otherwise dispose of your cryptocurrency for more or less than you acquired it for, you incur a tax reporting obligation.
As an example, there would be a $1,000 capital gain if 0.1 bitcoin is bought for $2,000 in June of 2020 and then sold for $3,000 two months later. This profit must be reported on the tax return and a certain amount of tax is due on the gain, depending on the tax bracket of the taxpayer. In this example, the gain would be short term requiring the profit to be taxed at the filer’s ordinary tax rate. These rates range anywhere from 0-37%.

Five Tax Reduction Strategies for the Casual Cryptocurrency Owner Read More »

Quick Guide to Claiming Work-From-Home COVID-19 Expenses to Reduce Your Tax Bill

Leave a Comment / By

This information is particularly important if you are the owner/shareholder of your own corporation – C or S corp. You can set up payroll and designate tax-free reimbursements for you to be working at home – as well other tax-free money for you and for your employees. (We will discuss employees momentarily. Yes, it’s essential.)

If being an employee is your main source of income – watch out! The short answer to employees claiming an office in home deduction this year is…

There is no deduction!

Quick Guide to Claiming Work-From-Home COVID-19 Expenses to Reduce Your Tax Bill Read More »

My Client Stuck with a Mistaken C Corporation Election?

Leave a Comment / By

My client formed three limited liability companies (LLCs) to hold his rental properties. Without consulting me, he filed Form 8832, Entity Classification Election, to elect C corporation treatment, effective January 1, 2020, for these LLCs.

I want the LLCs to be disregarded entities, which is the most tax-efficient structure for his situation. What is the best way to undo these elections?

My Client Stuck with a Mistaken C Corporation Election? Read More »

GOFUNDME & KICKSTARTER: TAXABLE? DEDUCTIBLE?

Leave a Comment / By

Millions of taxpayers in the United States are using crowdfunding websites like GoFundMe and Kickstarter to raise money for important needs, such as paying medical bills, paying legal fees, or funding a new business venture.

Both the IRS and the courts have been surprisingly silent on the tax consequences of crowdfunding platforms.

The good news is that established tax law provides a clear road map for answering most tax questions created by raising money from a crowdfunding website.

By knowing these rules, taxpayers can use crowdfunding to raise cash and minimize their overall tax exposure.

GOFUNDME & KICKSTARTER: TAXABLE? DEDUCTIBLE? Read More »

How Business Owners Can Boost Income by Avoiding the $10,000 SALT Cap

Leave a Comment / By

Taxpayers have been whipsawed by confusing rules for the $10,000 limit on deducting state and local taxes (SALT), the most politically charged piece of the Tax Cuts and Jobs Act (TCJA) of 2017. The cap has caused nearly 11 million individuals to lose an annual deduction worth $323 billion. But many owners of private businesses known as passthroughs can avert that financial pain. If you own your company and thus report your business income on your personal federal income tax return, here’s what you need to know.

How Business Owners Can Boost Income by Avoiding the $10,000 SALT Cap Read More »

Scroll to Top

Download Our FREE Magazine!

Download Our FREE Magazine!

Thank you for subscribing to Tax Law Pro

You are granted a non-exclusive, non-transferable, revocable license to access and use Tax Law Pro by Think Outside the Tax Box, Inc., strictly according to these terms of use.