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Just Good Business – Review Your Insurance Policies
Regular readers of this column may know that I came involuntarily to the tax business. I inherited it from my mother in 2010. Less well known is that the tax business was Mom’s side hustle. Mom’s main business was as an independent insurance agent. The insurance side of the business closed in 2017, but during the time I was administering that side of the business (I was never a licensed agent), I learned a lot about insurance. One of the most important lessons I learned was that the longer you hold a policy, the more the rates increase and that it pays to make the effort to review (and shop) your various insurance policies regularly. Another important lesson was that all coverage is not equal and, just as when looking for a tax professional, price should be a consideration but not the consideration. The third important lesson was to know your coverage before you need the insurance. Many times we had to remind a customer they had refused uninsured motorist coverage to save a few dollars after an uninsured motorist totaled the client’s vehicle or to explain the limits of flood coverage after a building flooded. Regularly reviewing your insurance policies for coverage and value provides peace of mind and is just good business. Click here to learn the ins and outs of getting a great deal.
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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.
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