Category: Blog

Last week, I shared some ideas with you guys about how easy it can be to begin creating management solutions in your business to help you recapture your free time.  Did you get the chance to do any of those last week?  I hope so, because the end result is simple – more time for you to do the work you want to be doing and less – sometimes far less – time chasing your tail or “doing” numbers.  This week, though, I want to share a next step based on that process.  After...

This is the time of year that a lot of folks begin to dig in to their plans for finalizing some of their 2020 contributions and sorting out what – and how much – they can plan on contributing in the New Year.  There’s some news – that might be seen as good OR bad – about that… For starters, contribution limits are remaining the same for next year virtually across the board.  Employees who are using 401(k)s, 403(b)s, most 457 plans, and the federal government’s Thrift...

First things first – this month, I’m not spending a single sentence in any of my communications to discuss who won the election, why they won, or if it was a “good” election or a “bad” election.  The news is going to be filled with that for the next month, so spending time rehashing it is wasting time I could be sharing REAL things with you.  He won, he’ll be president.  It’s that simple.  Now, on to bigger and better things! Last month, we looked at how entrepreneurs...

During this COVID-19 pandemic, landlords have two big possible problems: Tenants who can’t pay the rent.Tax losses they can’t deduct. We’ll start with the tenants and then move on to the rental property tax-loss issues. For the first time in U.S. history, residential landlords are subject to a sweeping nationwide federal moratorium on evictions for nonpayment of rent through the end of 2020. There is no moratorium on landlords’ responsibility to pay their bills. Thus, landlords need...

If you have employees, you must withhold their 6.2 percent share of the Social Security tax from their wages up to an annual wage ceiling ($137,700 for 2020). You must pay the money to the IRS along with your matching 6.2 percent employer share of the tax. But under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, as you likely know, employers are allowed to defer paying their 6.2 percent share of the Social Security tax on wages paid to employees through the end of 2020. Fifty...

You likely formed an S corporation to save on self-employment taxes. If so, is your S corporation salary nonexistent?too low?too high?just right? Getting the S corporation salary right is important. First, if it’s too low and you get caught by the IRS, you will pay not only income taxes and self-employment taxes on the too-low amount, but also both payroll and income tax penalties that can cost plenty. Second, in most cases, the IRS is going to expand the audit to cover three years...

Do you have a mileage log that will survive an IRS audit? If so, good for you! If not, get ready to give up all (not some, but all) of your vehicle tax deductions for not just one year but three years, as you will see in this true story. The story is about Therone Johnson, president of Diversified Innovative Products Co, Inc. (Dip Co), a corporation in Colorado that manufactures and sells disposable ink pans for printing presses. Mr. Johnson and the rest of Dip Co’s management work from...

With the COVID-19 pandemic still going on, you may be spending more time working from your home office. You may have taken some extra rooms for your business use. Is that okay? Section 280A(c) states that you may claim a home office based on the portion of the dwelling that you use exclusively and regularly for business. Thus, the law dictates no specific number of rooms or particulars regarding the size of the office. The courts make this rule clear, as you can see in the Mills (less...

Do you operate your business as an S or a C corporation? Do you drive a vehicle titled in your personal name for corporate business? Beware. The Tax Cuts and Jobs Act (TCJA) changed the rules for tax years 2018-2025. Before the TCJA, you had to pay attention to the use of your personal vehicle for corporate business in order to avoid losing deductions to the 2 percent miscellaneous itemized deduction rule and the alternative minimum tax. But now, because of the TCJA, you face a narrow...

The SECURE Act was intended mainly to expand opportunities for individuals to increase their retirement savings and to simplify the administration of retirement plans. Fine. Good. But the act also included a big unfavorable change that kneecapped the so-called stretch IRA estate planning strategy that was employed by well-off IRA owners. The Stretch IRA Strategy The stretch IRA strategy involves keeping as much money as possible in your traditional IRA or Roth IRA while you’re still...