Sale of Rental Real Estate Figuring out the basis When selling rental real estate, it is important to figure out the basis of the property. Here is how it works: Sales price Minus Purchase price Minus the total of all accumulated depreciation taken on the property (or not taken but were entitled to) Plus, the… Read More

If you own a business and work out of your home, you can deduct the space used exclusively for the operation of the business.  That could mean one or more rooms in your home, space in your garage or basement for file storage, and any other space providing that space is used exclusively for the… Read More

What Records Should You Keep? All tax records and copies of your tax return should be kept together for at least three years.  The IRS can go back three years to audit your return or just send an inquiry.  We suggest a minimum of the following: Copies of all W-2’s, W-2P’s, 1099’s, k-1’s and other… Read More

DEDUCTIONS FOR TAXES PAID Beginning in the tax year 2018, strict limitations have been put upon the deduction of real estate and state personal income taxes paid during the year. This affects your withholding taxes and/or estimated taxes paid along with any state income tax you may have paid with prior year tax returns. This… Read More

ENTERTAINMENT AND MEAL DEDUCTIONS FOR BUSINESSES The new tax law completely disallows any deductions for entertainment and now says that all meals must be otherwise deductible.  A deduction for meals that are entertainment related are not deductible at all.  It now becomes necessary to determine whether meals are nondeductible entertainment expenses or deductible business meals.… Read More

Tax Free vs. Tax Deferred These are two concepts that are frequently misunderstood.   Both have differing impacts on your current and future tax liabilities. TAX FREE Typically, this is dividend income coming from investments in municipal securities, primarily bonds.  State and local bond investment dividends are tax free on your federal tax return and will… Read More

ENTERTAINMENT AND MEALS This is of great importance to those who either own small businesses or whose active conduct of their business requires entertaining clients.  The Tax Act of 2018 completely disallows any deduction for entertainment and now indicates that meals must be otherwise deductible.  Because entertainment has been repealed altogether, a deduction for meals… Read More

MORTGAGE INTEREST DEDUCTIBILITY From 2018-2025 the deduction for personal interest paid on Home Equity Loans and Lines of Credit is suspended and disallowed unless the proceeds are used to build, buy, or substantially improve the taxpayer’s home that secures the loan. For new loans obtained between 2018 and 2025 taxpayers may only deduct interest on… Read More

MISCELLANEOUS DEDUCTIONS NO LONGER DEDUCTIBLE Although, in prior years, these deductions were subject to a 2% of adjusted gross income before any deductions were available, now they have been totally eliminated. Unreimbursed employee expenses – used frequently by teachers and other educators for expenses incurred on behalf of their classrooms. Also used by many others… Read More

KIDDIE TAX Under the new SECURE ACT that was passed and signed into law December, 2018, we revert the determination of the “kiddie tax” to pre-TCJA law with the taxation of net unearned income generally at the parent’s rate and eliminates the reduced AMT exemption for affected children effective 2020.… Read More