Navigating the complexities of real estate transactions involves more than just finding the right buyer or negotiating a favorable price; understanding the implications of capital gains taxes is equally important!

This is a relatively important ruling in the courts, so important it might be headed to the Supreme Court if the taxpayer further challenges the ruling.

If you’re an S-Corp owner, pay attention. The IRS is concerned about wages being reasonable because of the payroll tax component. If an S-Corp owner is running an artificially low wage, they are avoiding payroll taxes and are instead taking the majority of their profits through distributions.

The Economic Substance Doctrine is a nifty-little tool the IRS has to disallow certain tax transactions based on intent over form. In those instances, they say those transactions lack “economic substance” and are down purely as a tax-avoidance scheme with no other purpose.

If you use part of your home for storage of inventory or product samples, you can deduct expenses for the business use of your home without meeting the exclusive use test. However, you must meet all the following tests.

Why is this bad advice? There’s two sections of the tax code this will run afoul of - 162 and 262.

As of the summer of 2023, 63% of new audits have been for individuals making $200k or less, with 80% of overall audits are for taxpayers making $1M or less. So much for allocating resources to the ultra-wealthy.

Taxpayers are incorrectly receiving balance-due notices from the IRS even though they don’t actually have anything due.

Failing to file is more common than you might think, and from my experience the most common reason is people have anxiety around how much they’ll owe in taxes, so they can (temporarily) avoid that anxiety by not filing and not seeing how much they owe.

When starting a business, the first thing you should be doing is to test and see if your business idea is viable. This is done with a financial forecast - a component of a larger, overall business plan.

If there are assets you are planning on passing along to beneficiaries, hold them in your name until you are gone, so they can transfer to them in a tax-efficient manner.

Is there any way to make a gym membership deductible to the business when the sole employee is the owner?

The first problem we run into is Section 162 – which states that for something to be deductible to a business it must be both ordinary and necessary. For the vast majority of industries, a gym membership would not qualify as ordinary and necessary to running the business.

Estimated tax payments are taxes paid to the IRS to cover taxable income that is not otherwise withheld throughout the year. If you are self-employed or have outstanding taxable income, you are responsible for these payments, but what does that mean?

Congress actually put forth a useful bill concerning the IRS - one that requires the IRS to provide more information when recalculating a supposed error concerning a taxpayer’s return.

A win for the taxpayer! Once they were able to prove that they did have a home-office under Section 280A rules, they were able to deduct all travel-related expenses to the property as well as count those travel hours as part of Real Estate Professional work hours.

Congress actually put forth a useful bill concerning the IRS - one that requires the IRS to provide more information when recalculating a supposed error concerning a taxpayer’s return.

A win for the taxpayer! Once they were able to prove that they did have a home-office under Section 280A rules, they were able to deduct all travel-related expenses to the property as well as count those travel hours as part of Real Estate Professional work hours.