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Posted on Friday, October 12, 2018

Some do it often while others hold on all year for that one great week and live day by day until that magical start date on the calendar! A new wave in our digital age is to only take three or four day weekends, but do it more often. However you “vacation”, they do have one common thread, and that is that they are not free. Furthermore, when you are officially vacationing (which becomes a mindset as well….I am officially on vacation as of right now!) you spend more freely, often with a disregard for cost shopping. “I’m stopping at Starbucks for the mocha frappe latte, not Dunkin, cause I’m on vacation!”. What if next vacation you could upgrade to...

The post People Love to Vacation. appeared first on Tax What If Doctor.

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Posted on Friday, October 05, 2018

Late last year the government changed the tax code substantially and, among other things, created a new code section 199A for small business owners.  This created a buzz as many business owners were made aware they would be getting a huge tax break.  They also announced simplifications, like doing away with personal exemptions and instead increasing standard deductions.  In the long run, it should make it easier for people to understand their numbers, although for many it will mean an uptick in what they are paying in tax.   One of the perceived losses was the deduction for many kinds of business meals and entertainment, which was generally “shoulder shrugged” off as a “cost” of simplification.  “If we are getting...

The post IRS Releases Guidance on Business Meal Deductions! It’s Good News! appeared first on Tax What If Doctor.

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Posted on Friday, September 28, 2018

All around the country, there are people in an absolute panic because the real tax deadline for personal tax return extension filers is approaching and they are running out of time.  A few blogs ago, we talked about how to possibly deal with not being ready for the corporate deadline on September 15th .  We don’t have an amusing anecdote for the October 15th deadline like we did for the corporate deadline.  The deadline is the deadline. The exception would be for those who have been affected by flooding or other natural disasters and may be given an extended deadline by the IRS.  Those people may now have until December 31st to file, but would need to check the IRS website to see if they are in an affected area...

The post Tax Planning: It Isn’t Just For Breakfast Anymore appeared first on Tax What If Doctor.

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Posted on Friday, September 14, 2018

Every year the IRS gets together and starts looking at economic news and forecasts and works with several departments of the government to tweak our tax code.  They look at the leading economic indicators, they decide what they need to change, and the collection of tax revenue often changes by year end.  Will they do that this year after the most sweeping changes in a very long time?  In the past, they would create a lot of  temporary tax rules to steer the ship, but it’s a new course and we have only been sailing a short time! These new rules will be a very big surprise to many Americans, both winners and losers, as next year’s tax collection shakes...

The post A Timely Warning About One of Trump’s Tax Changes appeared first on Tax What If Doctor.

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Posted on Friday, September 07, 2018

If you have an S Corp based business then you are seven short days from your last deadline.  You can’t extend the extension, so what if you’re still just not able, what do you do?  Technically, you should be ready to file, so you’ll get no sympathy from Uncle Sam unless you fall under very rare special circumstances.  In a nationally declared disaster area, deployed in the military under certain special circumstances and a few other super rare groups.  Chances are very high that you don’t get more time, so what to do?  The penalty for not filing is substantial.  However, the penalty for making an error and having to amend later is zero.  S Corp returns give their owners a K-1,...

The post The Tax Filing Deadline for S Corps on Extension is Fast Approaching appeared first on Tax What If Doctor.

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Posted on Friday, August 31, 2018

With fall in the air, it’s time to start thinking about things that need to be done to prepare for winter.  The garden harvests are rolling in, fresh vegetables are everywhere and it’s really, really great.  Time to fill up your oil tanks before the price change, and at least know where those snow tires are in the back of the garage.  It’s also time for tax planning. There are so many things in the tax code that have time limitations.  It’s really time to check in with yourself if you want to actually participate in your bill with the IRS.  Taxes can be very much within people’s control, even though they don’t feel that way.  If you’re still out on extension, heads up — you...

The post “Fall” into Tax Savings for next year! appeared first on Tax What If Doctor.

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Posted on Friday, August 10, 2018

Many people don’t really think about their taxes until the snow is flying and the first document arrives in the mail.  Why would you, right?  Year in and year out people often get into a set of habits around getting things together for their preparer.  That`s usually not a bad thing, but in a year like 2018 when so many things have changed we see on the horizon a sea of surprised faces when they find out their usual $1,200 refund is now a $500 balance owed to the IRS.  Or their usual $1,000 tax bill is now $1,900.  Of course, like any changes there will also be winners receiving happy surprises.  But what side will you be on?  If...

The post Are You Changing Your Behavior to Match the New Tax Rules in Effect Now? appeared first on Tax What If Doctor.

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Posted on Friday, August 03, 2018

First, let’s say upfront that a business that has sources of income and expenses and leaves 25% profit on the table is an awesome business!  Example: A Plumber makes $400,000 a year and spends $300,000 a year on plumbing tools, trucks, repairs, staff, insurances, etc., and walks away with $100,000 at the end of the year that he can put in his pocket; great business!  It would be rare that it’s that easy.  More likely, he puts $60,000 in his pocket and sneaks a few personal expenses into his plumbing books.  In a very rare case in the other direction, 50% in expenses and 50% profit, but he probably wouldn’t do that every year.  That would be a “magic year” with no repairs to fleet vehicles, no staff turnover,...

The post Helping Clients Not Pay Tax on a Type of “Phantom Income” appeared first on Tax What If Doctor.

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Posted on Friday, July 27, 2018

The tax code is much more fluid than the public is truly aware of and deductions and credits come and go all the time.  Deductions like mileage for business owners change with the cost of gasoline, for instance, and can go up and down annually.  Often, it is actual programs that come and go, like energy tax credits or being able to transfer an IRA to a charity directly without paying income tax but still satisfying RMD requirements.  Often, these programs are temporary, and depending on whether the government believes that they have met their objectives, sometimes expire, or may become permanent.  Capital Gains has remained on sale!  It’s been changed over the years, but under the original Bush tax...

The post Does the IRS Really Have “Yard Sales?” Yes, All The Time! appeared first on Tax What If Doctor.

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Posted on Thursday, July 12, 2018

The IRS just gave guidance that a nondeductible IRA may still in fact be converted into a Roth IRA.  For those who didn’t know about that planning strategy in the past, at a certain level of income people were no longer allowed to deduct their IRA contributions.  Many advisors thought that the rule was that the higher income earner could not open an IRA, which was incorrect.  You simply lost the ability to deduct them. Why would I open an IRA that I could not deduct?  It was still tax deferred growth after it was opened, so a “tax deferred annuity” that could be invested in any way an IRA could be.  Later, with the creation of a Roth IRA...

The post Finish Line 2025 a Marathon for Tax Planners and Their Clients appeared first on Tax What If Doctor.

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