Dominique Molina, CPA MST CTS, Author at Think Outside the Tax Box

AUTHOR SPOTLIGHT

Dominique Molina, CPA MST CTS

Dominique Molina is the co-founder and President of the American Institute of Certified Tax Planners. As the driving force and visionary behind the San Diego-based company, Dominique set out to change the way tax professionals approach tax planning. In 2009, Dominique began to create an elite network of tax professionals including CPAs, EAs, attorneys and financial service providers who are trained to help their clients proactively plan and implement tax strategies that can rescue thousands of dollars in wasted tax. Dominique has successfully licensed over 800 tax professionals as Certified Tax Planners across the country, creating a national network of highly qualified advisors.

Prior to founding Certified Tax Planners, Dominique successfully managed her own practice, a San Diego-based, full-service tax, accounting, and business consulting firm, serving hundreds of business owners and investors across the country for seven years. Preceding this, Dominique assisted a variety of clients for the largest independently owned CPA firm in San Diego.

Dominique received her bachelor’s degree in Accounting from San Diego State University. Upon graduation, she began her accounting work as a staff accountant, controller, and office manager at several closely held asset management and investment companies.

Dominique is an accomplished keynote speaker, teacher, best-selling author, and mentor to tax professionals across the United States. Dominique routinely speaks for Surgent CPE and the AICTP Women’s Leadership Summit, among other leading professional groups. Realizing that many tax professionals were missing government tax breaks and loopholes that could save millions, she began teaching and writing to educate both individuals and tax professionals. Dominique is best known as the coauthor of six best-selling books, including Tax Breaks of the Rich and Famous and The Great Tax Escape. Dominique frequently appears as a tax expert and TV guest in regional television markets, including San Diego, Los Angeles, New Orleans, and Honolulu. Dominique frequently appears in print, television, and radio programs, including CNN Money, and was named one of the 40 Most Influential Accountants by CPA Practice Advisor Magazine and a recipient of the 2014 Financial Services Champion Award from the SBA.

READ MORE BY Dominique Molina, CPA MST CTS

Using an LLC to Enhance Deductions for Your Personal Residence

A frequent question for tax pros is, “Can I put my primary residence in an LLC?” It is well known that owners holding rental real estate in a limited liability company want to ensure they’re receiving all their entitled benefits.

The problem is, simply placing a personal residence in an LLC does not change the fact that the residence is for personal use and not for business. If you’re hoping that using an LLC will help you gain tax advantages, the LLC might not be the right choice for the property.
The main purpose of an LLC is asset protection. Aside from this valuable benefit, many choose an LLC to hold their business activity. However, simply using an LLC for anything personal not only doesn’t provide additional tax benefits, but it may also cost you the available benefits for your home.

If, however, you’re thinking of locking in the tax advantages you currently have while converting your home to a rental, consider selling it to an entity you own before you make it available for rent.

To learn how to avoid losing tax breaks and gaining more, keep reading.

Read More

Trump Corporation Charged in Fringe Benefits Tax Fraud Scheme – How to Do It the Legal Way

Prosecutors in New York have charged the Trump Corporation with tax fraud related to deductions of more than $1 million in fringe benefits over 15 years.
The Manhattan DA indicted longtime CFO Allen Weisselberg for tax evasion on $1.7 million in business deductions, which paid for an apartment, private school tuition for family members, two Mercedes Benz vehicles, and other perks in exchange for his employment at the Trump Organization.

The former President and company spokespeople responded that every company deducts fringe benefits, describing the charges as a witch hunt or political gamesmanship by opponents.

If this leaves you a tad confused about whether or not you can deduct fringe benefits for yourself or employees in your small business, rest assured, there is a legal way to do it. Keep reading to discover the right way to deduct non cash or other indirect fringe benefits.

Read More
This is How to Increase Your ERC

This is How to Increase Your Employee Retention Credit

Are you seeking clarity on whether employee owners can claim the Employee Retention Credit (ERC) tax credit for yourself? Or perhaps you want to know whether qualifying for the Recovery Startup Business bonus is really that easy. You’re in luck! On August 4, 2021, the IRS released Notice 2021-49 to answer our questions related to the definition of wages, majority owner wages treatment, timing of the deduction disallowance, and recovery startup businesses.

The ERC has been a phenomenal tax credit getting much needed cash to qualifying businesses using qualifying wages paid between June 30, 2021, and January 1, 2022. It hasn’t been uncommon to see small businesses recovering $50,000 to $200,000 in cash refunds just by claiming the credits for wages paid during 2020.

The recovery startup business element of the CARES Act incentivizes new businesses to hire employees by offering up to a possible $100,000 in refundable credits using wages paid in the third and fourth quarters of 2021. This means if you hire seven employees (who are unrelated to you) in your new business, which began after February 15, 2020, and their average earnings are $10,000 for the quarter or more, you can receive up to $100,000 in credits.

Naturally, we’ve received a lot of questions related to this lucrative credit and so has the Treasury Department. If you’re wondering how the IRS weighs in on how to maximize these tax credits, keep reading because we have six clear ways to qualify for even more money!

Read More

Tax Planning Software – Artificial Intelligence or Skill Saw?

Question: How much time should be devoted to studying tax planning? Can’t I just select a software providing Artificial Intelligence to Inform Me What to Do?

Answer: To answer this question Dear Reader, I’ll ask a question in response. Are you a user of TurboTax or a similar software tool?

Chances are as a reader of Think Outside the Tax Box, you use something (or someone) different than software purchased at a big box store. The answer to this question may be a similar situation to a semi-regular TikTok viewer of DIY household construction projects. Does the job require a router or a Dremel tool?

If you’ve heard me talk about tax planning before, no doubt you’ve heard me describe tax planning software as an instrumental tool. It can provide valuable insights such as data extracted from your tax returns, calculation of minimum required estimated tax payments, and even a few tips to save annual tax.

Whether you are a do-it-yourselfer braving a construction project in your home or a new business owner or novice tax planner, the answer depends on the nature of the job you are doing.

Is it possible for this experienced Tax Planner of more than 20 years with an advanced degree and thousands of tax plans to complete a bathroom remodel in just a weekend with a Dremel tool? Certainly. I’ve even got the pictures to prove it.

Just like the bathroom-in-a-weekend, it is possible with an off-the-internet-software to develop a few ideas to save some tax dollars. But if you look closely at my personal photos – you’ll notice the glue expired on my “driftwood” mirror frame. The recycled wood tiles failed to stay up with the shower moisture in the air, and while the dimensions of my replacement countertop – the walls were just a hair too uneven in my old house.

In the end, my weekend project took more than 4 weekends of my precious free time, more than $1,200 in the after-the-fact hired help to fix my handywork, and a little of my pride revealing this online to a public audience.
To read about when it is a DEAL BREAKER to rely on AI tax planning software, click here to continue reading.

Read More

More Cash Available for Employers Under Refundable Tax Credit

As 2020 winds to a close, we have seen many beneficial programs provided by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the Families First Coronavirus Response Act (FFCRA). While most media coverage has focused on loans to employers such as PPP and EIDL, it is important to remember some of the lesser covered programs also included in the tax relief programs. In fact, eligible businesses may qualify to get cash back in some instances.
The employee retention credit (ERC) under the CARES Act offers a refundable payroll tax credit for certain wages and health plan expenses paid by businesses during the economic hardship. However, many business owners have uncertainty as to how to qualify when they have also received a PPP loan.
The paid sick leave and paid family medical leave credits also offer a refundable tax credit for qualifying wages and Medicare tax and health plan expenses.
These refundable tax credits are stackable for maximum benefit when used correctly. Read on to discover how to qualify.

Read More

Maximizing Your Home Office Deduction

Question: Can I avoid depreciation recapture by not claiming it before I sell?

Answer: Nice try. You may save yourself unnecessary worry and fear about so-called recapture, but it won’t save you any tax impact when you do sell. If you want to learn the truth about depreciation, keep reading to learn more.

Read More

Last-minute Tax Fix for PTET Businesses That Missed the 12/31 Deadline

Question: My client is just now paying the PTET for California with a timely filed election. Can they deduct the tax payment if they are an accrual basis taxpayer?

Answer: Based on face value, unfortunately, the answer is no.

Both cash and accrual basis passthrough entities would need to pay the tax by 12/31/21 (assuming calendar year-end) to get the deduction on the 2021 tax return.

This answer is based on IRS Notice 2020-75, stating that an entity could take a deduction in the year paid. While the guidance did not specify cash or accrual in the definition, unless the IRS comes out with any other guidance stating otherwise, it is a federal deduction so it works the same as accrued state taxes, which the taxpayer must pay by the end of the tax year to deduct the amount following the economic performance rules.

However, what if your client is an accrual basis taxpayer? While Notice 2020-75 does not specifically distinguish or reference method of accounting, there may be a way to fix your 2021 state tax deductions if you missed the 12/31 deadline.

Click here to keep reading.

Read More

How to Withdraw Cash from Your C Corporation Tax-free

Question: I understand the concept of paying just 21 percent tax through a C corporation. This makes sense if my tax rate is higher than, say 25 percent or 35 percent. But isn’t this money taxable to me as a dividend as soon as I withdraw it from the corporation? I don’t understand; won’t that actually cost me more tax?

Answer: You have identified the exact reason C corporations can be what we call “high maintenance.” You’re right. Done in the wrong way, using a C corporation can actually cost more in tax than using a pass-through entity and paying tax at your individual rate, even if that rate is, say, 35 percent. By the time you pay qualified dividends tax on any withdrawals, you can wind up paying 45 percent or even 50 percent, depending on your individual tax rate.

The key is to use smart planning. Rather than simply withdrawing the funds from your C corporation as a taxable dividend, use one six ways to withdraw tax-free instead. Doing this will help you lock in the low 21 percent flat rate and permanently save you from your high individual tax brackets.

Keep reading to learn more.

Read More

How to Slash Your Property Taxes

Question: You talk a lot about reducing federal taxes, but what about other taxes? It seems like we get taxed on everything multiple times! Is this even legal?

Answer: Isn’t it the truth! You may feel that your income, purchases, and belongings get taxed double, triple, and even more times. The saying goes, “nothing is certain except death and taxes.” And even when you die the same property and earnings may be taxed again. The Supreme Court even answered the question in 2015 about whether taxing the same income more than once is constitutional. In the case of Maryland v. Wynne, the 5-4 decision indicates that two states do not have the right to tax the same income.

While many of the strategies discussed in Think Outside the Tax Box reduce federal taxes, most of them will reduce your state income taxes as well, depending on whether or not the state in which you pay taxes conforms to federal tax law. In addition, there are many state tax reduction strategies worth learning and implementing.

However, did you know there are also tax reduction strategies for other types of taxes like property taxes?

One of the oldest taxes and primary sources of revenue for states, counties, cities, schools, and fire departments comes from taxing the value of property owned within a jurisdiction. In some locations, this can include personal property as well as real estate.

Like most good tax laws, property tax laws include loopholes you can use to pay less. To learn more, continue reading here.

Read More

How to Pay Less Tax on S Corporation Distributions

Most taxpayers understand that having an S corporation often eliminates the so-called “double tax” issue C corporations pose. However, the majority of S corporations begin as C corporations and the activity that occurred during the time it was a C corporation will determine how and when to tax distributions from the S corporation.

C corporations cannot avoid double taxation on profits simply by electing to be treated as an S corporation (yet there are many other ways to save this double tax on C corporations, stay subscribed to learn about them). Withdrawing C corporation profits even when it later becomes an S corporation can create an extra tax. Here’s how to avoid that.

Read More

How to Get More Tax Benefit from a Fully Depreciated Property

Question: I have a fully depreciated rental property that I purchased more than 40 years ago. What are some tax planning strategies I should consider?

Answer: Congratulations! You defied the odds and the thousands of advertisements claiming that real estate investing is an easy way to get rich. But now that your precious “paper losses” a.k.a. depreciation is long gone, it’s time to search for a new way to create tax advantaged income.

There are some fun ways to “re-depreciate” your investment again, and even put some of those carryovers to use. But before jumping into tax, let’s also consider your investment returns since you achieved this milestone.

One issue I see many real estate investors face is that they tend to be short-sighted with their goals. You might, initially, have a goal to get rental income sufficient to cover your mortgage payments. You might have a longer-term goal of eventually having rental income pay off your mortgage. Often, when either of these events occur, I notice some investors sit back to enjoy their success.

While success specifically means something different for everyone, from a wealth and tax perspective it is important to also evaluate your choices and returns on your investment.

Examining the cash-on-cash return on investment is especially important for real estate investors who may not consider more than their initial down payment as their own investment.

In addition, identifying loopholes which allow you to re-depreciate your property can also create significant tax benefits you cannot afford to miss.

Keep reading to learn more…

Read More

How to Earn $1 Million in Two Years Tax-Free Using Real Estate

No doubt you’re familiar with taxes arising from the sale of real estate. Capital gains tax applies whenever anyone sells an asset for profit.

A capital gain is the sale price minus your “adjusted basis.”
● The “basis” starts at the price paid for the property; and then:
● ADD the amount that was put into improving the property and;
● SUBTRACT the amount, if any, that you may have “written off” based on depreciation.
● Short term capital gains (within one year of purchase) are taxed as ordinary income.
● Long term capital gains are taxed at a lower rate. (15 percent if your taxable income is less than $501,600.)

You’re probably also familiar with the homeowners’ gain exclusion for the sale of your primary residence. This is the spectacular Section 121 exclusion that allows you to exclude up to $500,000 of profit related to the sale of your home ($250,000 if you are single).

But you may not be aware of how to claim this exemption on two homes – and you can do it on nontraditional homes such as boats or motorhomes and even vacation homes. Continue reading to learn how.

Read More

How Do Community Property States Affect Tax Returns?

Question: How do community property states affect tax returns?

Answer: While fairly easy to determine your filing status when married (either joint or separate), tax rules get more complicated when you live in a community property state. Generally, the state laws where you live govern whether you have community property and community income or separate property and separate income for federal tax purposes.

Not only do these rules affect how much income is taxable to you, but they also impact rules in things such as deductions, credits, taxes and payments, basis for things like capital gains, and participation rules. In some states, the income you earn after you separate and before a final divorce decree continues to be community income. In other states, it is separate income. Under special rules, income that can otherwise be characterized as community income may not be treated as community income for federal income tax purposes in certain situations.

This year particularly is important for evaluating whether or not to file separately if married, especially if there is a big difference in each spouse’s income. What may appear on the surface to qualify for stimulus and child tax credits, may, in fact, be disqualified once you report community property income.

Click here to see if these disadvantages impact you and how to avoid them.

Read More
Finally – SALT Cap Workarounds to Bypass Schedule A Limits

Finally – SALT Cap Workarounds to Bypass Schedule A Limits

Ever since TCJA passed, taxpayers in high income tax states have been wincing each time they see the $10,000 limitation appearing on Schedule A. But while the law included this $10,000 state tax deduction limit for individuals , it did not include a limit for partnerships, S, or C corporations.

To clarify the deduction’s limitation, the IRS issued a notice blessing an entity-level tax and accordingly, many states have implemented such a tax. This allows you the ability to bypass the $10,000 limit on Schedule A and deduct the state taxes paid as a business expense.

As of this writing, 19 states have passed what are known as “pass-through entity taxes,” but there are pros and cons to using this loophole. If you are the owner of a pass-through entity and pay more than $10,000 each year in state taxes, this workaround may increase the state tax deduction beyond the limit. Keep reading to learn how.

Read More

Can I Deduct My Dog?

Question: I’ve had clients ask and, of course, heard at cocktail parties the discussion about claiming a pet’s medical expenses and other costs. But what is the citation that prevents these deductions?

Answer: Wouldn’t it be nice if you could get a little tax help from the government by deducting your dog? Aside from the enormous price breeders charge for designer pets, there are vet bills, food (some people even have their pets eat raw or vegan), obedience classes, clothing, exercise, and daycare to name a few!

While today’s is a softball question, I thought we could all use a break from the continuation of the never-ending tax season of 2020. It also raises the issue of citations and documentation. Have you tried finding the one that says you cannot deduct pet expenses? What about the one that says you can?

Keep reading to learn how.

Read More
CA AB-5 and Impact

California’s AB-5 And Its Impact On Small Businesses That Work with Independent Contractors

Question: I run a virtual business with no employees, but independent contractors perform all the work. I heard about that case in California. Should I be doing something different in my business? Do I owe any penalties for how I’ve done it in the past?

Answer: Effective January 1, 2020, AB 5, later AB 2257, radically changed the rules and criteria for determining whether a worker’s classification is independent contractor or employee.

The so-called “gig law” was effective based on a California Supreme Court case from 2018. The significance of the ruling is that it changed the criteria of worker classification and held that workers are presumptively employees and the burden is on the hiring entity to establish that a worker is an independent contractor not subject to wage order protections in California.

Although this is a change impacting California employers, the rest of the country has eagerly watched and hoped to cash in on the changes that would generate billions in employment taxes.

Businesses that prefer to work with independent contractors such as Uber and Lyft were quick to propose a ballot initiative in 2020 that the voters passed and now drivers are exempt from the new criteria (insert eyeroll here).

Want to know how to get your own exemption from AB-5? Continue reading.

Read More

5 Ways to Avoid Biden’s Capital Gain Increase

The headlines have said it all. “Biden Wants up to 43 percent of Your Retirement Gains!” or “Americans Can’t Afford Biden Inflation Tax!” Also recently seen, “Biden Doubles Capital Gains Rate,” and “Biden Tax Rule Would Rip Billions From Big Fortunes at Death!” The hysteria presented in the media as we anxiously await proposed changes in tax law through the pending budget proposal has many investors debating whether or not to lock in low capital gains before anticipated tax hikes.

Wealthy investors like Jeff Bezos and Warren Buffet have reportedly been selling large numbers of stock market shares rumored as a response to news of an impending capital gains tax increase, many people are left wondering what moves, if any, should they take now to avoid higher taxes. Given that we know to anticipate higher taxes, here’s what you should do now to lock in taxes while they are on sale.

Read More

5 Keys to Beating the Biden Tax Increase

Lawmakers have moved even closer to voting on a bipartisan infrastructure bill to build bridges, roads, and national broadband internet as party leaders announced an agreement recently. While Biden’s tax hikes are unpopular, the Senate will need to determine how to pay for the increase in spending.

The President’s original $3.5 trillion spending plan calls for higher taxes for those making more than $400,000 per year as well as higher corporate tax rates and changes to capital gains and estate tax. This leaves those benefiting from the current “sale prices” on tax considering their next move.

In our previous coverage on this topic, I listed 5 Ways to Avoid Biden’s Capital Gain Increase, but let’s focus here on how to beat the increases to corporate and individual tax rates. The answer might surprise you.

Read More

2022 Summer Education Series Event Calendar

TOTTB proudly introduces our 2022 SUMMER EDUCATION SERIES! That’s right! Every month through August we will be bringing you a FREE, live webinar event to help educate and inspire you on all things tax! As a monthly or annual subscriber, these webinars are 100% exclusive, and free to you! Guest speakers include regular columnist, Peter Reilly, Boston Tax Institute Founder, Lucien Gauthier, the Tax Mama, Eva Rosenberg, and more! Every webinar comes with free continuing education credits for those who qualify! Keep reading for more details…

Read More

CURRENT EDITION

Home Sweet Domicile – There’s More to State Residence Than a Driver’s License

Voter registration, a drivers license, and day counting are what come to mind when people think about residence for state income tax purposes. There is no question that those basics are very important and ignoring them can kill your cause. Nonetheless, many other factors can enter into a determination, including church attendance and pets. That’s because you will generally be a resident of the state in which you have your “domicile.” And domicile as a concept borders on the mystical. It is your true home, it remains your domicile until you abandon it and establish a new one.

Yet, establishing your domicile in a state with no (or low) income taxes can be lucrative. In some cases, this can represent millions of dollars all by avoiding state income tax. The natural progression of a business owner’s life can also include exiting said business at substantial profit. Your domicile at the time of the transaction can be pivotal in determining how much of that profit you’ll be left with in retirement.

To learn more about how to do this, keep reading.

Tax Planning – It’s Not Just For the Wealthy – Part 1

It’s hard to escape the news covering numerous methods high net-worth clients use to minimize their taxes. A ProPublica (June 8, 2021) headline trumpets, “The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax.”

CNBC (September 20, 2021) highlights, “The wealthy may avoid $163 billion in taxes every year. Here’s how they do it.” Even Teen Vogue dives into the topic.

If you’re a taxpayer of more modest means, you may think, Hey, what about me? I can’t afford the team of high-priced tax advisers or consider many of these tax reduction techniques. Are there ways I can minimize my taxes that are legal, easy to implement, and affordable? The answer is a resounding YES. And how do I qualify?

Read on for some tax planning tips that will work for you. Part One (of this two-part series) covers strategies to reduce your adjusted gross income.

You Are Not Eligible for the Employee Retention Credit: Vague “Suspensions” Lead to Trouble

Far too many of these Employee Retention Credit (ERC) claims are nonsense. Now don’t get me wrong. I enjoy helping businesses claim the ERC. I have written in these pages about the unique ways a business may qualify and how to use startup eligibility even for existing employers. But let’s be honest: People are manipulating this program beyond belief. The refund dollars are too attractive and have created far too large an incentive for shops charging high commission fees (I have seen fees charged between 10 to 35 percent of the refund).

In the coming years, numerous aggressive ERC shops may contact you if they haven’t already. How do you know whether a claim is legitimate or nonsense? Here, we will review the most prevalent bad arguments to help you avoid trouble.

  • NOT A MEMBER YET?

    SUBSCRIBE TO GET ALL OF OUR
    GREAT ARTICLES AND RESOURCES!

  • Avoiding Passive Loss Limitations Through Short-term and Alternative Rentals

    Short-term rentals like AirBnb are becoming increasingly popular with taxpayers who invest in real estate. For many taxpayers, the appeal of these properties is the flexibility and cash flow potential. However, there may be an overlooked third tax benefit. In many situations these short-term rentals may not qualify as a rental activity to the IRS, and that may offer a big tax break. While many rental activities generate losses, this can leave taxpayers facing the frustrations of not always getting to deduct those losses right away due to the passive activity limitations.

    Read More

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

    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.

    Read More

    GOFUNDME & KICKSTARTER: TAXABLE? DEDUCTIBLE?

    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.

    Read More

    My Client Stuck with a Mistaken C Corporation Election?

    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?

    Read More

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

    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!

    Read More

    Five Tax Reduction Strategies for the Casual Cryptocurrency Owner

    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%.

    Read More

    Extra Taxes on S Corporation Distribution?

    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?

    Read More

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

    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.

    Read More
    1 2 3 21
    Scroll to Top
    error: Alert: Content is protected !!