Donating Clothing to Goodwill and the Salvation Army As the year comes to a close, many taxpayers consider making clothing and household item donations both to give back and to optimize their tax deductions. Recent cases, like the one involving Duncan Bass, underscore the significance of understanding and adhering to IRS regulations related to these…
Key Insights into Depreciation Here are some crucial insights into depreciation, particularly regarding business or rental assets. When Does Depreciation Start? Technically, depreciation begins not when you use an asset but when it’s ready and available for its intended purpose. For instance: A rental property begins depreciating when it’s available to rent, even if it…
Act Now! Get Your Safe-Harbor Expensing in Place For 2024, you can elect the de minimis safe harbor to expense assets costing $2,500 or less ($5,000 with audited financial statements or similar). The term “safe harbor” means that the IRS will accept your expensing of the qualified assets if you properly abided by the safe…
HSAs for Business Owners When enacted, the Affordable Care Act (ACA) eliminated most small-business health plans that reimbursed individually purchased health insurance. Consequently, many small business owners with fewer than 50 employees chose health savings accounts (HSAs) or opted to provide no health coverage at all. As of 2022, over 35 million HSAs were active,…
Holding Real Property in a Corporation: Good or Bad Idea? As the real estate market has cooled off in many parts of the country, investing in property may seem wise in the long run. But taxes can be a significant concern. Owning real estate in a C corporation may not be wise when considering taxes…
Big Tax Break: Qualified Improvement Property Do you own or lease non-residential (think “commercial”) real property for your business, or rent non-residential real property to others? If so, interior improvements you make to the property may be fully deductible in a single year instead of over multiple years. But to be deducted instantly, the improvements…
Reverse Mortgage as a Tax Planning Tool When you think of the reverse mortgage, you may not think of using it as a tax planning tool. If you are house rich but cash poor, the reverse mortgage can give you the cash you desire, save you a boatload of both income and estate taxes, when…
Selling Your Home to Your S Corporation The strategy behind creating an S corporation and then selling your home to that S corporation comes into play when you want to convert your home to a rental property and take advantage of the exclusions, or you need more time to sell the home to realize the…
Make Sure You Grab Your Home Internet Deduction If you do some work at home, you’re probably using your home internet connection. Are your monthly internet expenses deductible? Maybe. The deduction rules depend on your choice of business entity (proprietorship, corporation, or partnership). Deduction on Schedule C If you operate your business as a sole…
Tax Implications When Your Vacation Home Is a Rental Property If you have a home that you both rent out and use personally, you have a tax code-defined vacation home. Under the tax code rules, that vacation home is either a personal residence or a rental property. The tax code classifies your vacation home as…
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