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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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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.
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CURRENT EDITION
Lessons Learned from the Tax Court: What’s at Stake?
Astute readers of this publication may recognize that I frequently write on Cryptocurrency and also on Tax Court cases. It feels like Christmas to me to be able to write about a tax court case about crypto. This is only the Third Tax court case to even mention crypto, and the first to look at the underlying principles of taxation. (The other two were about including crypto assets in a CDP hearing and a frivolous tax protester argument). Today’s case, Paschall v. Commissioner, is about the taxation of staking income.
What’s New With Hobby Loss: Recent Developments in Section 183
Recent developments in the Section 183 (Hobby loss) area have not led me to change my basic conclusions. Taxpayers who have a sincere objective of ultimately making a profit should not hesitate to claim losses from the underlying activities. That is so even if you believe that profits are improbable. It is critical that they meet the standard of behaving in a businesslike manner. The other regulatory factors should not be ignored, but often there is not that much you can do about them. Reilly’s 18th Law of Tax Planning – Honest objective trumps realistic expectation.
The Art of Income Shifting: Powerful Planning Strategies That Stand Up to Scrutiny
Income shifting strategies address taxation at its most fundamental level by directing income to taxpayers in lower brackets or with offsetting deductions. Unlike many tax strategies that merely time recognition or enhance deductions, effective income shifting can permanently reduce the tax burden on a given dollar of income—often creating tax savings that compound year after year. In this article, we’ll explore systematic approaches to income shifting that create extraordinary value for clients while maintaining impeccable compliance.
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.
