Thinking about moving your retirement money to a Roth IRA? Be careful before you do! You see, when you convert a traditional IRA to a Roth IRA, and then reverse the transaction (by switching the account back to traditional IRA status), the reversal is characterized by the IRS as a “recharacterization.” If you have a sizable accumulation in your traditional IRA, the … [Read more...]
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Tax reform’s effect on partnerships and LLCs
The Tax Cuts and Jobs Act made a number of changes that affect multi-member partnerships and LLCs. Most of these changes will put a smile on your face, but a few may cause some frowns. How will your business fare under the new law? We’ll tell you the good, the bad, and the ugly when you read my new article titled Tax Tips: TCJA Changes Affecting Partnerships and LLCs and … [Read more...]
An S corporation “reasonable compensation” alert
As we’ve mentioned in past issues of the Tax Reduction Letter, there’s good news for S corporation owners: Tax reform gives you a new 20-percent Section 199A deduction on pass-through income. But be aware… The IRS requires that you pay yourself “reasonable compensation.” If you don’t, you can torpedo your deductions and be forced to pay extra taxes and penalties. Want … [Read more...]
To cut your taxes, make your spouse a business partner
Are you running your business as a sole proprietorship or S corporation? Then I’ve got important news for you… Thanks to recent tax reform, a properly structured spousal partnership can actually serve as a better choice of business structure. If you want to learn how adding your spouse as a partner in business can significantly cut your taxes, read my new article titled … [Read more...]
Tax reform expands your Section 179 deduction privilege
If you’re a regular reader of the Tax Reduction Letter, you know that the Tax Cut and Jobs Act can cause you some real pain. But in this article, we have good news — and here it is … Thanks to tax reform, you now have a more favorable and permanent Section 179 deduction for qualified assets placed in service starting in 2018. In fact, the new, improved Section 179 … [Read more...]