Renting Your Home to a Corporation
Here are answers to six questions I’ve gotten about the big tax benefits of renting your personal residence to your corporation for 14 days or less. Q&A 1 Q: Must my corporation issue Form 1099-MISC to me for the rent paid to me for the rental of my home? A: Yes, the corporation must issue Form 1099-MISC if the rent [...]
Forming an LLC
When you form an LLC, you need to draft articles of organization that comply with the state’s LLC act and then file the articles with the appropriate state office. Typically, the required articles are broadly worded and likely don’t address members’ rights and responsibilities as you would like them addressed. Furthermore, most state LLC acts provide default rules that can be [...]
Trading or Selling Your Old Business Vehicle
Since you report your business income and expenses on Form 1040, Schedule C, you have a unique tax-planning possibility when replacing your old business vehicle and when the following situations occur: your taxable self-employment income (Schedule C income) is $137,727 or less; you are using actual expenses (not the mileage rate) to deduct the replacement vehicle; and the outright sale [...]
Tax Audit Tips for Travel, Entertainment, and Education
We have a question that you likely do not want to hear: how would your travel, entertainment and education tax records hold up in an IRS audit? Do you think you could get them in shape before the IRS gets to you? Think again. This is highly unlikely to work, for three reasons: You have violated the timely records rule, [...]
Misclassifying W2 Workers As 1099 Contractors
One potential business tax reduction strategy is to hire independent contractors instead of employees. If a worker’s classification fits within the tax law, it’s a legitimate strategy that can save you thousands of dollars. Sometimes the classification isn’t clear-cut. You may think you have the independent contractor classification correct, but when the IRS does the audit, you learn that those [...]
How to Make Giving Count
One of the simplest ways to slice your individual tax bill at the end of the year is by giving a gift to a qualified charitable organization. Regardless of whether it is a donation of property or cash, you are able to claim a charitable deduction for your generosity as long as you meet certain requirements. It is a great [...]