As you probably know by now (and definitely know if you’re a regular reader of The Tax Reduction Letter), tax reform added tax code Section 199A. This new section created a new 20-percent tax deduction possibility for you if your rental property has profits and can qualify as a trade or business. Which means that if your rental property satisfies the above two conditions, … [Read more...]
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No business Income. No Home-Office Deduction. Wrong!
If you had no taxable income in 2018, you might think you can’t claim the home-office deduction. That would be a big mistake. Why? Because even if you didn’t earn a nickel of taxable income, your home office can produce three significant tax benefits for you. We’ll tell you what they are and how to take advantage of these totally-legal tax breaks when you read my new … [Read more...]
What Can I Do If My K-1 Omits 199A Information?
Your tax reform’s 199A deduction doesn’t arrive on a silver platter compliments of the IRS. No. You have to calculate the deduction yourself, and to do so you need to receive complete and accurate K-1 information. But what happens if the pass-through entity doesn’t provide the complete, necessary information you require? (And by the way, this happens far more often than … [Read more...]
TCJA Planning: Terminating Your S Corporation Election
The Tax Cuts and Jobs Act (TCJA) may get you thinking about whether it makes sense to change your form of business entity. Maybe you’re considering turning your S corporation into a C corporation, partnership, or sole proprietorship. If you’re currently running a C corporation, you’ll have to terminate it and elect to switch to another form of business entity. How do … [Read more...]
How to Deduct Medicare as a Business Expense?
If you operate as a proprietorship, a partnership, an S corporation, or a C corporation, you’re undoubtedly aware of an unpleasant fact… Premiums for Medicare health insurance can add up to a lot of money. This is especially true if you earn a high income, you’re married, and both you and your spouse are paying premiums. But hang on for a second. If you know how to play … [Read more...]