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TO REDUCE TAX?
New tax reduction strategies carefully explained and exhaustively researched every two weeks. Receive breaking news updates on tax law changes. Members only monthly AMA with TOTTB.tax.
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FEATURED CONTENT
10 Reasons Your Clients Should Get a Tax Divorce
As a married individual, you can select a tax filing status as either married filing jointly or married filing separately, and in some cases neither of these statuses achieve what is possible for two single taxpayers each filing their own tax return. In many cases it can seem you are getting penalized for being married in the U.S. You may get frustrated that you seem to keep getting hit with “wealth taxes or penalties.” Of course, you may not refer to it that way. But when you see things like the Alternative Minimum Tax, The Net Investment Income Tax, the Additional Medicare Tax, and a whole variety of other taxes that are higher for married filers than they are for two single people…you may be tempted to think about a divorce. And “live in sin”? No matter your personal beliefs there are at least 10 tax attributes that cost married filers more than two single people. In some instances, children are in the mix, as they relate to specific credits. Some of these situations only apply to wealthy couples. Some only apply to those earning $50,000 or less or seniors. These attributes, commonly known as the so-called “marriage penalty” refer to situations where it may pay to file as two single individuals rather than as a married couple. However to qualify, you cannot legally be married as of December 31. To learn more about these penalties and find out how to work around them, continue reading.
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CURRENT EDITION
Tackling Taxes On an Inherited HSA
The Health Savings Account (HSA) is a first line of defense tax strategy. Contributions are deductible and earnings are tax-free if used for qualified medical expenses. There are numerous features to the HSA that secure maximum tax benefits. Structured properly, an HSA can provide serious tax-free money to beneficiaries as well as the account holder. Before we review the implications of inheriting an HSA, let’s review some of the powerful features an HSA has that increases the value of the account.
Kadau v. Commissioner and the Line Between Effective and Broken Captives
Captive insurance remains one of the most closely examined tax planning strategies in use today, not because it is inherently flawed, but because small missteps can carry outsized consequences. Many taxpayers assume that careful formation and proper documentation are enough to protect the intended tax outcome. A recent Tax Court decision, Kadau v. Commissioner, serves as a reminder that those assumptions deserve closer scrutiny. The court’s analysis did not hinge on whether captive insurance can work, but on how a specific arrangement actually functioned in practice. For tax professionals advising clients who rely on micro-captives, the case raises important questions about where structures tend to break down, why some arrangements attract IRS attention while others do not, and what really separates a defensible captive from one that invites challenge.
Not Every Client Is a Keeper: When Saying Goodbye Protects Your Practice
Bad chemistry with one client can disrupt the flow with everyone. That one client who doesn’t follow your processes and messes up the workflow during tax season. The client who never turns things in on time but then wants results from you immediately when they do. These things affect how you interact and work with your other clients as well. As the firm owner we should do whatever we can to protect good chemistry within our business. As a tax advisor the people we work with become our family. We help them make decisions that impact them and their families. That is why firing clients can be a delicate matter when you are doing the firing.
SIMPLIFIED TAX STRATEGIES &
PRACTICAL IMPLEMENTATION
Think Outside the Tax Box provides tax reduction strategies along with practical
implementation advice in order to reduce your clients’ federal tax bill with ease.
