Home Offices eliminates commuting mileage and a provide a tax benefit. That’s the result you achieve when you claim an office in your home.
To qualify for the home-office deduction, you must use the office exclusively for the business or businesses for which you are claiming the deduction.
Your ability to qualify for the office-in-the-home deduction is straightforward if you have no spouse and only one business. But add a spouse or another business to the equation and this deduction can become more complicated.
If you are going to have more than one business use of your office in the home, make sure each business use separately qualifies on its own merits for the home-office deduction.
If you are married, all uses of the same office by the spouses must be deductible uses or the office fails the exclusive-use test.
It's just that simple! The IRS will disallow your home office deduction if you don't follow these rules.
As your business continues to grow, I wanted to make sure that you were aware of these rules.
If you find any of the rules above concerning, please don’t hesitate to contact us for a business consultation. We will put together a tax plan for you.
Good news. The Tax Cuts and Jobs Act (TCJA) did not harm the backdoor Roth strategy.
As you likely know, the Roth IRA is a terrific way to grow your wealth with a minimum tax downside because you pay the taxes up front and then, with the proper holding period, pay no taxes after that.
But if you earn too much, you’re completely barred from contributing to a Roth IRA unless you can use the backdoor Roth technique, which involves making a nondeductible contribution to a traditional IRA and then rolling that money into a Roth. Making Tax planning imperative in order to reduce your tax liability!
The backdoor Roth strategy has been around for a good nine years, and it has experienced no trouble that we are aware of, so we think it’s a good strategy. We also like the recent notations in the legislative history and the comments from the IRS spokesperson that show approval of the strategy.
Keep in mind that with some planning, you can avoid any taxes on the rollover. For example, if you have an existing traditional IRA, you can move those monies to your qualified plan to avoid having the backdoor strategy trigger some taxes. And if you have no traditional IRA, the nondeductible contribution to the traditional IRA and the subsequent rollover to the Roth IRA triggers no taxes.
Juneteenth is the oldest nationally celebrated commemoration of the ending of slavery in the United States.
From its Galveston, Texas origin in 1865, the observance of June 19th as the African American Emancipation Day has spread across the United States and beyond.
Today Juneteenth commemorates African American freedom and emphasizes education and achievement. It is a day, a week, and in some areas a month marked with celebrations, guest speakers, picnics and family gatherings. It is a time for reflection and rejoicing. It is a time for assessment, self-improvement and for planning the future. Its growing popularity signifies a level of maturity and dignity in America long over due. In cities across the country, people of all races, nationalities and religions are joining hands to truthfully acknowledge a period in our history that shaped and continues to influence our society today. Sensitized to the conditions and experiences of others, only then can we make significant and lasting improvements in our society.
Copyright of Juneteenth.com
Tax reform may have you thinking of changing your S corporation to a C corporation, partnership, or sole proprietorship.
With such a switch, you need to consider:
If you want to turn your S corporation into a C corporation, you file an S corporation election revocation statement with the IRS. Your corporation is then a C corporation for federal tax purposes.
If you don’t want your business to be either an S or a C corporation, you liquidate the S corporation and contribute the assets to a new business entity.
If you chose S corporation taxation for your limited liability company (LLC), changing that election is a little more complicated.
First, you must file the S corporation election revocation statement with the IRS. The tax law then treats your LLC as a C corporation for federal tax purposes.
If that’s what you want, stop there.
If you want a disregarded entity (single-member LLC) or a partnership (multi-member LLC), you also need to file with the IRS to also revoke the C corporation election.
If you will like to know if you are in the right entity setup for tax purposes, let us do the work for you. We will provide you with a comprehensive report filled with side by side comparisons of each entity and a snippet of any section 199A deduction you may qualify for. Click the button below to schedule your appointment today.
As a small-business owner, you probably incur work-related education expenses from time to time. You may even decide to pursue an advanced degree, such as a Master of Business Administration (MBA).
You likely want your employees to be on a path of continuous improvement.
There’s much to know about how such business deductions work for both you and your employees. The Tax Cuts and Jobs Act (TCJA) tax reform may trigger a need for you to change your strategy to help your continuous learning (likely your most valuable) employees.
Your employees will find this new rule beyond the “oh, shucks” reaction. For 2018–2025, the TCJA outlaws write-offs for miscellaneous itemized expenses that under prior law were subject to the 2 percent of adjusted gross income (AGI) deduction threshold.
Included in this category are unreimbursed employee business expenses. So for 2018–2025, employees may not take miscellaneous itemized deductions for unreimbursed work-related education expenses.
If you want your employees to continue on their continuous learning pathways, you may now want to reimburse those employees for their educational expenses. The reimbursements can give you three benefits:
If you operate your business as a corporation and you are an employee in your corporation, the corporation can reimburse you for your work-related education expenses. The education reimbursement is (a) tax-free to you, just as with any employee, and (b) a deductible business expense for your corporation.
Make sure that employees, including you, turn in their work-related education expenses on an expense report that includes proof of the outlays and why such expenses are business-related.
If you would like my help with the education possibilities and deductions for you, your business, and your employees, call me on my direct line at 262-358-8297
The month of June is named after the wife of Jupiter, the Roman goddess Juno. Juno was known as the patron of marriage and was responsible for the wellbeing of women.
The month of June is the longest daylight hours in the Northern Hemisphere and the weather is supposed to be mild. June is the seasonal equivalent to Southern Hemisphere in December.
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Spencer Accounting Group, LLC does not provide investment, tax, legal, or retirement advice or recommendations in these blogs. The information presented here is not specific to any individual's personal circumstances.
Keana Spencer is an Accountant, Entrepreneur, and Educator to her clients, with a strong passion. Keana has over 10 years of experience and through her practice, she is a source of knowledge and strategies to her clients.