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...]
Tax Policy
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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...]
Hit with IRS penalties? Here’s how to pay $0
If you or your corporation files your tax return late, or fails to pay your taxes on time, you could face big penalties. Naturally, you’d think you’d have to pay them. Not true! When you know how to play the game, and learn which buzzwords to use when talking to the IRS, they will show you mercy and forgive those penalties. What’s the first step you need to take to avoid … [Read more...]
Is your spouse robbing you of your 199A deduction?
Recent changes in the tax law provide a hefty 20-percent Section 199A tax deduction for lots of lucky taxpayers. But not for everyone. “In-favor” business owners are winners. “Out-of-favor” business owners are losers. What happens when an in-favor owner marries an out-of-favor owner? Does one spouse rob the other of their valuable 20-percent deduction? You’ll get the … [Read more...]
Beat some of the new limits on state tax deductions
Tax reform under the Tax Cuts and Jobs Act has put your state and local tax deductions in the crosshairs. Thanks to lawmakers, your federal deductions for state income taxes now can’t exceed a $10,000 ceiling. And that’s just for starters. But don’t lose heart. Once again the Tax Reduction Letter comes to the rescue with specific strategies you can use to keep more money in … [Read more...]