Eat up! Thanks to changes in the Tax Cuts and Jobs Act (TCJA), it’s now much easier to write-off business meals for you, your customers, other business contacts — and even your spouse! That’s right. The IRS has reverted to the pre-1963 (more business-friendly) “ordinary” and “necessary” business-expense rules. So what are they? We’ll explain fully when you read my new … [Read more...]
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Personal Use of Your Rental Triggers Ugly Vacation-Home Rules
Sole use dwellings: If you own a vacation home that only you use, your tax situation is pretty straightforward. Rental dwellings: If you rent a dwelling to a tenant who lives there exclusively, you’re also in good shape. Dual use: When you use the dwelling for both personal and rental use, you create the possibility of tax-free rent, rental property deductions, and extra … [Read more...]
Secrets to Pocketing Cash by Renting a Bedroom in Your Home
The Airbnb revolution is here. This means you might be considering renting out a bedroom in your home with Airbnb, another company, or on your own. Doing so could entitle you to some nice tax benefits. But be careful! The IRS rules governing bedroom rentals are complex, and if you don’t handle everything correctly, your visiting guest could wind up being an IRS … [Read more...]
Tax-Saving Double Play: Combine Home Sale with the 1031 Exchange
If you bought your home years ago, it’s very possibly worth a lot more now. But consider this… If you own a highly appreciated home, selling could trigger a huge federal income-tax gain well in excess of what you could shelter with your principal residence gain exclusion ($250,000 or $500,000 for joint filers). And on gains in excess of the above-mentioned exclusions, … [Read more...]
Taxpayer Avoided 15 Hours of Paperwork; Lost $35,000 to the IRS
Most taxpayers find that keeping accurate records is a pain in the neck. But failing to keep these records can cost you a tremendous amount of money. That could be true even when it comes to tracking what you’ve spent over the years on home improvements. We’ve run the numbers on the Pendergrafts and discovered that they avoided just fifteen hours of paperwork that cost … [Read more...]