Tag Archive for Tax Advisor

Learn Why Many Taxpayers Are Converting From A Traditional IRA To A Roth IRA

Roth IRA accounts provide the benefits of tax-free accumulation and, once you reach retirement age, tax-free distributions. This is the reason why so many taxpayers are converting their traditional IRA account to a Roth IRA. However, to do so, you must generally pay tax on the on the converted amount. After making a conversion, your circumstances may change, and you may find yourself wishing you had not made the conversion. In the past, you could change your mind later and undo the conversion. But that option is no longer available under tax reform. So, be careful: once a conversion is made, there is no going back.

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Written by | Posted in TaxConnections

Canada Tax: Disposition Of Real Estate For Business Income Vs. Corporation Capital

A disposition of property can be categorized as business income or as a capital gain or loss. There are various factors to consider in determining if the disposition is business income or capital for a corporation.

As capital gains are only 50% taxable in Canada, it is generally more favorable for the taxpayer. However, capital losses are only deductible against capital gains. The capital losses can be carried back 3 years and carried forward against future capital gains. Therefore, your tax advantage may vary depending on the situation. Read More

Written by | Posted in Canada • International • Real Estate

Are There Advantages To Owning A Second Home?

Whatever the location, size, or value of a second home, certain tax advantages are built in. However, your opportunity to benefit from them depends on how you use the property.

Personal Use

Both property taxes and mortgage interest are as deductible for a second home as they are for your primary residence — and are subject to the same limitations. If you file a joint return, you cannot deduct interest on more than $1 million of acquisition debt ($500,000 for married persons filing separately) on one or two homes. Read More

Written by | Posted in Capital Gains • Deductibles • Deductions • Property Tax

Understanding Marginal Income Tax Brackets

By any measure, the tax code is huge. According to Commerce Clearing House’s Standard Federal Tax Reporter it’s up to 74,608 pages in length.¹

And each Monday, the Internal Revenue Service publishes a 20- to 50- page bulletin about various aspects of the tax code.²

Fortunately, it’s not necessary to wade through these massive libraries to understand how income taxes work. Understanding a few key concepts may provide a solid foundation. Read More

Written by | Posted in Federal Income Tax • Income Tax • TaxConnections

Should I Submit A Residential Property Tax Protest Annually?

If you’re a homeowner, a residential property tax protest should always be on your radar around this time of year – even if you filed one last year and won.

The truth is, property tax calculations are based on a lot of arbitrary data – data you just don’t have control of. Appraisal districts use recent home sales and other market info to create your home valuation, and in today’s market, a good chunk of properties are being over-valued. In the end, that means a higher property tax rate and more money out of your pocket – year after year. Read More

Written by | Posted in Property Tax • Texas Tax

Filing Taxes As An American Living In Mexico – US Expatriate Taxes Explained

You are going to be required to file US expat taxes no matter in which country you live, but how will they be affected if you’ve chosen to live in Mexico?  With the familiar language, proximity to the US, warm weather, and beautiful geography, Mexico is one of the most popular destinations for American expatriates.  It is essential to understand how your US tax return will be affected by your move to Mexico, and what US taxes you will be required to pay. On top of your obligation to file and pay US taxes, Mexico has taxes of its own. Read on for the details you need! Read More

Written by | Posted in Expatriate Taxes • Foreign Earned Income • Mexico Tax/ Belize Tax

Charitable Miles Deduction: Is It Changing Under The New Tax Reform?

Now that the effects of last year’s tax reform bill are being felt, the proposals to reform the reform keep rolling in. Last month, Sen. Bob Casey (D-PA) put forth a bill to reinstate unreimbursed job expenses. This week, Rep. Richard Nolan (D-MN) introduced H. R. 5662, also known as the Volunteer Driver Tax Appreciation Act of 2018.

The purpose of the bill is to amend the Internal Revenue Code of 1986 to equalize the charitable mileage rate with the business travel rate. For 2018, the Internal Revenue Service (IRS) optional standard mileage rates for the use of a car, van, pickup or panel truck are 54.5 cents per mile for business miles driven but a mere 14 cents per mile driven in service of charitable organizations. Read More

Written by | Posted in 2018 Tax Law • Charity • Deductions • Mileage • Tax Changes

Top Predictions You Need To Know: Wayfair V. South Dakota Onlines Sales Tax Case

As we wait for a decision in the Wayfair v. South DakotaSupreme Court Case regarding online sales tax, we thought it would be fun to take a look at possible outcomes depending on how the Court rules.

Our Opinion On The Online Sales Tax Case

Back in March we shared our predictions on how the online sales tax case’s outcome would affect businesses.

What if the Supreme Court rules against South Dakota? We’re back where we started with Quill remaining the physical presence standard and states passing various legislation that’s either unconstitutional (and likely not upheld) or that requires onerous reporting. Read More

Written by | Posted in Online Sales Tax

Tax Changes Are Coming – New Rules On Divorces And Home Buying

With the end of this season we also see the end of tax laws as they have been for decades. Now we have to look ahead and make sure there won’t be any unpleasant surprises and taxpayers will be subject to the new laws.

If you are planning on a divorce this year, you’ll want to review the new rulings. If you’re buying a new home, again, you’ll want to make sure you are clear about whether or not you can write off the interest on your loan. Read More

Written by | Posted in 2018 Tax Law • Tax Season

Self-Employed? 5 Easy Ways To Lower Your Tax Bill

If you’re like most small business owners, you’re always looking for ways to lower your taxable income. Here are five ways to do just that.

1. Deducting The Cost Of A Home Computer

If you purchased a computer and use it for work-related purposes, you can take advantage of the Section 179 expense election, which allows you to write off new equipment in the year it was purchased if it is used for business more than 50 percent of the time (subject to certain rules).

2. Meal Expenses For Company Picnics And Holiday Parties

If you host a company picnic or holiday party–even if it is at your home–100 percent of your meal expenses are deductible. Prior to tax reform legislation passed in late 2017, 50 percent of your business-related entertainment expenses (with some exceptions) were generally deductible. Starting in 2018, however, entertainment-related expenses are no longer deductible. If you have any questions, please don’t hesitate to call.

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Written by | Posted in Self Employment Tax

How To Submit A Reasonable Cause Claim To The IRS For Penalty Abatement

If you have not filed your personal income tax form (1040), generally, you should get the tax form filed ASAP without consideration for the yet to be assessed penalties.

Then exercise patience.

Wait for the IRS to assess the penalty and then send a reasonable cause explanation to the address indicated on the notice from the IRS. This way you mitigate all sorts of procedural kerfuffles. Read More

Written by | Posted in Form 1040 • IRS

The IRS Issues 2018 “Dirty Dozen” Report To Highlight The Biggest Scams The Public Needs To Avoid

Every year the IRS issues its “Dirty Dozen” report to highlight the biggest scams that the public needs to avoid.

The IRS has released the following press release:

This year’s “Dirty Dozen” list highlights a wide variety of schemes that taxpayers may encounter throughout the year, many of which peak during tax-filing season. The schemes can run the gamut from simple refund inflation scams to technical tax shelter deals. A common theme throughout these: Scams put taxpayers at risk. Read More

Written by | Posted in Dirty Dozen • IRS
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