If you gamble, take a bow and say thank you to Ronald A. Mayo, who took his gambling case to the Tax Court and won a big, precedent-setting victory for gamblers. Before getting to Mr. Mayo’s accomplishments, note that there are two types of gamblers: 1. Hobby Gamblers - those who participate in gambling for...Continue reading
For this tax season, 2024, we have seen an increase in inquiries about gambling tax laws. With interest in writing off gambling losses, claiming gambling winnings and general questions about tax rules when it comes to gambling. See our recent posts, Can I Write Off My Gambling Losses? and When Do I Report Gambling Winnings...Continue reading
As you consider the process of shutting down your S corporation, it is crucial to understand the federal income tax implications that come with it. Here, I outline the tax basics for the corporation and its shareholders under two common scenarios: stock sale and asset sale with liquidation. Shutting Down Your S Corporation Scenario 1:...Continue reading
Real estate options and leases with purchase options can enhance your real estate investments profits. Here’s a concise guide to help you navigate the potential pitfalls and maximize your returns. Real Estate Investments: Stand-Alone Purchase Option A stand-alone purchase option can be highly profitable. Here’s how it works: Immediate cash. You receive cash up front...Continue reading
What is the best structure for my business? Use this chart to help determine how best to structure your business. Are you a business owner or entrepreneur trying to decide which entity structure is the best fit for your needs? Navigating the complex landscape of business entities can be challenging, so we provide this Business...Continue reading
Ever since posting "When Do I Report Gambling Winnings to the IRS?" we have had several inquiries about writing off gambling losses. So, here's the question: "Can I write off my gambling losses?" With sports gambling legalized in Ohio since January 1, 2023, it's the 2024 tax season when this massive increase in tax questions...
If you own rental properties than you know a significant tax benefit of owning investment property is depreciation—a deduction you get without spending any additional money. But regular depreciation for real property is slow. Residential rental property is depreciated over 27.5 years and non-residential property over 39 years, providing a relatively small deduction each year....Continue reading
As you consider shutting down your sole proprietorship or your single-member LLC treated as a sole proprietorship for tax purposes, it’s crucial to understand the tax implications of this decision. Here’s an overview of key points you need to consider. Sole Proprietorship Asset Sale Tax Implications When you sell a sole proprietorship, you sell its...Continue reading
Self-employment taxes are substantial, and most people want to minimize them. Self-employed taxpayers often avoid self-employment taxes by operating as an S corporation. The distributions from the S corporation are not subject to self-employment tax. But Social Security and Medicare tax must be paid on the shareholders’ employee compensation (which must be reasonable based on...Continue reading
If you get a 1099-K you likely have a side-hustle in the gig economy or sell goods or services through a third party. When you receive payments through a third party your third-party settlement organization (TPSO) will likely issue you a 1099-K. If so, you must know the IRS’s new reporting rules. TPSOs include: payment...Continue reading
On January 1, 2024, the Corporate Transparency Act (CTA) went into effect. The CTA requires most smaller corporations, most limited liability companies, and some other business entities to file a beneficial ownership information (BOI) report with the U.S. Department of the Treasury Financial Crimes Enforcement Network (FinCEN). The BOI report identifies and provides contact information...Continue reading
If your business is structured as an S corporation, not paying yourself an appropriate salary as an owner can torpedo your tax deductions, causing extra taxes and penalties. Tax Cuts and Jobs Act From 2018 to 2025, the Tax Cuts and Jobs Act is offering a 20 percent deduction on pass-through business income, with specific...
For over 20 years, the IRS has issued an annual Dirty Dozen list identifying tax scams and avoidance schemes. This year’s list includes everything from employee retention credit claims to the use of fake charities. Before you invest your hard-earned money in these or other highly promoted tax schemes, you should check the IRS Dirty...Continue reading
Looking to maximize your vehicle tax deductions for 2023 and wondering if there's still time? - Do you need a replacement business car, SUV, van, or pickup truck? - Do you need tax deductions this year? - Do you need a tax credit to offset what you owe to the IRS? 2023 Tax Credits /...
It's not too late to consider 2023 tax strategies. Are you thinking of getting married or divorced? If so, consider December 31, 2023, in your tax planning. Here’s another planning question: Do you give money to family or friends (other than your children, who are subject to the kiddie tax)? If so, you need to consider...Continue reading
Are you hoping to write off more than one vehicle and have been told you can't? Contrary to popular belief, the IRS does not limit business owners to claiming deductions on only one business vehicle. When Should You Write Off More Than One Vehicle? You might maximize tax benefits by using multiple vehicles for business...Continue reading
With more people working from home, one has to wonder if the home-office deductions on tax returns are out of control or warranted. Will the IRS be scrutinizing home office deductions and what do they look for. In short, will your home office deduction pass in an IRS audit or will it raise red flags?...Continue reading
Form 8275 is filed to disclose all types of tax positions. When you're considering taking an aggressive position on your tax return that could result in a substantial tax reduction, but you're worried about having to pay a penalty, talk with Ken-Mar Tax for a free consultation. As an Enrolled Agent, Ken Weinberg is up-to-date...Continue reading
Q&A: Home-Office Deduction for Orthodontist Question: Bob, an orthodontist, wants to claim a home-office deduction. His employees and contractors do the billing and accounting for his practice. Bob and his wife (who is an employee) do payroll once a month in the home office. Bob’s primary use of the home office is preparing treatment plans...Continue reading
In Chief Counsel Advice (CCA) 202151005, the IRS opined on this issue. But before we get to what the IRS said, understand that the CCA’s conclusions cannot be cited as precedent or authority by others, such as you or your tax professional. Even so, we always consider what the CCA says as semi-useful information, so here’s some...Continue reading