Tax Planning & Preparation


The Tax Cuts and Jobs Act (TCJA) tax reform added new tax code Section 199A, which created a 20 percent tax deduction possibility for you if your rental property: (a) has profits and (b) can qualify as a trade or business. The current tax law as now stands, with rentals that achieve trade or business status, you win. When you achieve the “business-status” rental property, it will create the following five possible tax benefits for...

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  Qualified medical expenses are deductible to the extent that they exceed 7.5% of your adjusted gross income (AGI) for 2018 and 2019. Starting 2020, the deductibility threshold increases to 10% of your AGI. AGI is the bottom number on the first page of your personal income tax return (Form 1040). What are Medical Expenses? Medical care expenses include payments for the diagnosis, cure, mitigation, treatment, or prevention of...

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The good news is that you can be both real estate investor and real estate dealer with respect to your real estate portfolio. The next good news is that you are in control, and by knowing just a few rules about dealer and investor classifications, you can do much to increase your net worth. Both Disadvantages of Being a Real Estate Dealer Profits on dealer sales are generally subject to taxes at both ordinary income rates of up to 37...

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Tax reform made a lot of good changes in the tax law for the small-business owner. But the changes to the net operating loss (NOL) deduction rules are not in the good-changes category. They are designed to hurt you and put money in the IRS’s pocket. Now, if you have a bad year in your business, the new NOL rules are designed to stop you from using your business loss to find some immediate cash. The new (let’s call them bad-for-you)...

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Last week, someone approached me with this situation, “I closed my S corporation with the state in 2017. However, during 2018 I’ve had unexpected expenses from the defunct S corporation. I paid those expenses from personal funds. Where can I deduct those expenses? You should have seen his face when I told him that he was out of luck. Neither he nor the S corporation can deduct those expenses. No Deduction for the S Corporation...

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