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
How Do Owners of S Corporations Deduct Their Health Insurance?
An inconvenient rule applies to how S corporation owners deduct the cost of health insurance that a corporation puts on its W-2s. The words that make this an inconvenient rule are “earned income,” and this is unusual because you generally think of earned income as a good thing. But for the S corporation owner who...Continue reading
Home-Office Deductions for Orthodontists
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
Do I Need to Pay Self-Employment Tax on Airbnb Rental Income?
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
What Qualifies as Regular Use for the Home-Office Deduction?
To deduct an office in the home, you must pass the regular-use test, so what is regular use for the home-office deduction? (Side note: this is a re-post of content created in 2011 and references tax cases from the 70's that laid a foundation for determining how to define "regular use" for the home office...Continue reading
Can You Deduct a Home Office if You Have Another Office Outside the Home?
Question: Can you deduct a home office if you also have a non-home office? Answer: Yes! As the tax reduction specialists for the self-employed we navigate through the home office deduction issues regularly. We know what the IRS looks for and what you will not get away with. SO let's make sure your tax reduction...Continue reading
Tax Audit Penalties? How You Can Defeat The IRS
If the IRS audits you and says you owe more tax, they will often impose an accuracy-related penalty on top of the tax. This penalty is not small - at 20 percent of the additional tax owed. For a $10,000 audit assessment, that’s an additional $2,000 you have to send to Uncle Sam. In this...
When Do I Have to Pay Self-Employment Taxes?
What Are Self-Employment Taxes? Do I Pay Them? Self-employment taxes are to individual business owners what payroll taxes are to employers and employees. They fund Social Security and Medicare. All individuals with self-employment income must pay self-employment taxes, regardless of their age. When business owners reach retirement age, they’ll be able to collect Social Security...Continue reading
S Corporation: Common Mistakes When Converting
Looking to convert to an S corporation? At first glance, the corporate tax rules for forming an S corp appear simple. They are not. In this article, we do two things: First, we help you avoid the potholes that destroy your S corp. Imagine what a shock that is—to find out that what you thought was...Continue reading
Landlords and Business Owners: New Law Improves Energy Tax Benefits
Landlords and small business owners should know the newly enacted Inflation Reduction Act contains tax credits and depreciation benefits for owners of commercial property and residential rental property. As a Cleveland landlord, or small business owner, if you implement various types of renewable energy improvements, you can qualify for hefty tax credits or deductions. One...Continue reading
Home-Office Deduction: What if I Have a Pool Table in the Office?
Home-Office Deduction Question: I heard that if I had an office in my home and in that home-office room I had a pool table, I could simply subtract the amount of square footage that the pool table takes up from the square footage of the office. I do have a pool table, and I actually...Continue reading
New Business Tax Credits for Buying Electric Vehicles
The Inflation Reduction Act of 2022 amended the Clean Vehicle Credit, and added a new requirement for final assembly in North America that took effect on August 17, 2022. Three major things to know about this new law when it relates to tax planning for your business and buying an electric vehicle: 1.The existing electric vehicle...
Q&A: Should I Pay My Daughter by W-2 or 1099?
Question from a Cleveland small business owner: How do I pay my daughter? I will hire my 15-year-old daughter to work in my single-member LLC business, and I expect to pay her about $12,000 this year. Do I pay her through payroll checks and file a W-2? W-2 Payment is Important When Paying Your Daughter...Continue reading
Back Taxes? Unfiled Tax Returns? Avoid the Tax Resolution Company.
By now you know you can't run from your back taxes and you can't hide from your back taxes, but you do not have to work with a "tax resolution firm." From our experience, most tax resolution companies are large call centers, are not local companies, charge an initial fee of $3,000-6,000 and then drag...Continue reading
Can RITA Garnish Your Wages? How to Eliminate Hassle and RITA Penalties
What are RITA Penalties and CCA Cleveland Collections? Are you receiving letters from organizations such as RITA and CCA? Do they threaten to apply late fees and garnished wages for taxes you’ve paid already? Are you confused, wondering how you can afford this on top of income tax? Local taxes collected by the city can be...Continue reading
How to Get IRS Penalties Waived?
Are you interested in learning how to get your IRS tax penalties waived? Are you wondering if the State of Ohio waives tax penalties? What about RITA, our local tax collection agency serving most of the Northeast Ohio region? If you (or your corporation) file your tax return late or fail to pay your taxes...Continue reading
Owe Back Taxes? Scary Letters from the IRS? Your Options.
What to Do If I Owe Back Taxes But I Can't Pay? You just filed your federal income tax return, looked at the amount you owed, and started to sweat because you don’t have the money. Whatever you do, ignoring your back taxes will not make it better. Even if you have several years of...Continue reading
Don’t Forget to Request Your RITA Refund
As we posted last month in "Work From Home Tax Benefits in Cleveland Area," you may be entitled to a RITA tax refund. However, your local municipality tax collector, which is what RITA and CCA are - tax collection agencies, are waiting for you to request the refund. RITA refunds will not be automatic. CCA...Continue reading
Work From Home Tax Benefits in Cleveland Area
Do you live in the Cleveland area and work from home? If so, you should be aware of the many work from home tax benefits. Aside from potential home office deductions and other write-offs routinely claimed by the self-employed (see "Tax Reduction Strategies for the Self-Employed"), a huge benefit could depend on comparing the Municipal...Continue reading
2021 Last-Minute Year-End Tax Strategies for Marriage, Kids, and Family
Our specialty at Ken-Mar Tax is to provide our tax preparation clients with tax strategies that will legally reduce their tax obligations. As an IRS enrolled agent, Ken Weinberg keeps up-to-date about all the IRS tax codes in order to use them to your advantage. Tax Strategies for Getting Married, Divorced, Staying Single, Adding Your...Continue reading