Image from www.tylercauble.com What if you could take depreciation faster than 27.5 or 39 years on your real estate investments? It will surely help your bottom line, right? A cost segregation study can significantly improve your chances of front-loading deprecation deductions by breaking your building up into different categories. Land isn’t depreciable, so we’ll eliminate that from the equation right away. But, then you have equipment, furniture and qualified improvements… Continue reading Turn Your Rental Property into a Cash Cow
Image from www.inman.com Are you a Real Estate dealer or investor? Here are few aspects to consider: Buying properties periodically, fixing them up, and selling them makes you look like a dealer. But when you seldom do this , then you can qualify as an investor and hence get favorable tax treatment. If you… Continue reading Crucial Tax Considerations for Real Estate Investors
Picture from www.henssler.com Did you discover errors on your tax return? I know how frightening it can be, but fortunately, it’s not as hard to fix as you think. If you catch the error before the IRS tax due date or the IRS extended due date (October 15), you can file what’s called a… Continue reading Error on Your Tax Return? No Worries!!!
Image from www.nstp.org The Delta variant continues to put Americans at risk, and the government is highly encouraging all employers to mandate the vaccine. While the mandate itself is controversial and a matter of personal opinion, there are ways you can help your employees without mandating the vaccine. The federal government offers assistance to… Continue reading Killer Tax Saving Strategies from Covid
Separate out Husband-Wife Partnership and Hire Your Spouse as an Employee Consider this strategy for your existing husband-wife partnership if you are not in a community property state and you do not love the S corporation idea. Step 1. Separate the existing husband-wife partnership or LLC treated as a partnership for federal tax purposes and start… Continue reading The Strategy That Can Substantially Reduce Taxes For A Husband-Wife Partnership
Net Operating Loss (NOL) Opportunities The CARES Act now allows NOLs arising in tax years 2018, 2019, and 2020 to be carried back 5 years and claim refunds against the taxes already paid. Say for example, a taxpayer that had net operating losses in 2018 and/or 2019, and may have losses in 2020 as well,… Continue reading Understanding The Tax Benefits From COVID-19 (CARES Act)
Put Your Children on Your Payroll If your kids are under 18, you can hire them to take care of business chores and save on federal self-employment taxes of up to 15.3%. As long as the total wages you’re paying your child are less than $12,400 for the year, the child doesn’t have to pay… Continue reading Tax Saving Strategies For Sole Proprietors
Here is a list of strategies to reduce taxes on capital gains. Sell stocks that will give you short term gains (up to 40%) to mitigate the gain against any long-term losses (up to 23.8%) In other words, make the high taxes wash out by netting them against low-taxed losses, and keep the difference. Sell long-term trades… Continue reading Last Minute Year-End Strategies To Reduce Taxes On Capital Gains
Year-end is approaching, so let’s do some tax planning. Check out some tax-saving strategies below that can save you $$$: Put your retirement plan in place by December 31st and make sure you make a tax-deductible contribution. Converting traditional IRA to a Roth IRA can provide huge tax savings in the long-term. Make sure you leave… Continue reading 6 Year-End Tax Saving Strategies
Imagine selling your business (C-corporation only) for a gain of around $7 million and paying no taxes. That’s right – as long as you operated your business as a Qualified Small Business Corporation (QSBC) and you owned the business for more than five years, you don’t have to pay any federal income tax on the… Continue reading Tax Savings On Sale Of Business
Understanding Tax Relief Options for Individuals
Individuals seeking to reduce their tax burden can benefit significantly from understanding various tax relief options available to them. Tax relief measures can include deductions, credits, and exemptions that lower taxable income, ultimately leading to reduced tax liability.
For example, the Earned Income Tax Credit (EITC) is a valuable benefit for low to moderate-income workers, providing a substantial credit that can increase a taxpayer's refund. Similarly, deductions for mortgage interest and student loan interest can also alleviate some financial pressure during tax season.
Impact of COVID-19 on Tax Regulations
The COVID-19 pandemic has led to significant changes in tax regulations, affecting both individuals and businesses. Understanding these changes is crucial for taxpayers to ensure compliance and maximize available benefits.
For instance, the Coronavirus Aid, Relief, and Economic Security (CARES) Act introduced various provisions, including the deferral of payroll taxes and expanded unemployment benefits. Staying informed about these changes can help taxpayers navigate their financial obligations more effectively.
Common Tax Mistakes to Avoid
Many taxpayers make common mistakes that can lead to missed opportunities for savings or, worse, penalties. Identifying these pitfalls can help individuals and businesses file their taxes more accurately and efficiently.
Some frequent errors include incorrect filing status, failing to report all income, and overlooking eligible deductions. By being aware of these common mistakes, taxpayers can take proactive steps to ensure their returns are correct and complete, thus avoiding costly repercussions.
The Importance of Tax Planning Throughout the Year
Tax planning is not just a year-end activity; it should be an ongoing process that helps individuals and businesses optimize their tax situations. Engaging in proactive tax planning can lead to significant savings and a better understanding of financial obligations.
For example, regularly reviewing financial status and adjusting withholdings can prevent underpayment penalties. Additionally, making strategic decisions about investments and retirement contributions throughout the year can enhance tax efficiency and overall financial health.
