Roth IRA’s Roth IRA’s are individual retirement accounts that are subject to the same rules as a traditional IRA with some major distinctions. Roth IRA contributions are not deductible. Qualified distributions are not taxable. You can continue to make contributions after you reach age 70½. There are no required minimum distributions. Who can contribute? You […]
The IRS has released the final regulations, effective January 1, 2014, that govern when you must capitalize and when you can deduct expenses related to tangible property. Here we will discuss some of the provisions for small businesses (generally those without audited financial statements). Generally you should assume that all tangible property, except inventory, must […]
There are a set of rules that apply to the taxation of children and investment income. This set of rules is known as the Kiddie Tax. The Kiddie Tax applies to children with investment (unearned) income who are under age 19 or under age 24 and a full-time student. For purposes of this discussion, we […]
You just received you tax return and can’t pay the balance due in full. What do you do? FILE YOUR RETURN ON TIME. This avoids the penalties for late filing. RESPOND TO ALL NOTICES. “Do Not” ignore the taxing authorities. Pay as much as you can when you file the return. The outstanding balance is […]
If you are a landlord, most items on a settlement sheet have to be capitalized and amortized over the life of the mortgage, however: Interest expense from the time of settlement until your first mortgage payment is deductible. The amounts that you reimburse the seller for property taxes, utilities, homeowner’s association dues, etc. are deductible […]
The small employer health insurance tax credit was enacted as part of the Patient Protection and Affordable Care Act (Obamacare). The purpose of this part of the law is to help small employers defray some of the cost of providing health insurance for their employees. Prior to 2014, employers often found that complex calculations yielded […]
What is the Alternative Minimum Tax? In 1969 the Alternative Minimum Tax was enacted to assure that the rich pay at least a minimum amount of tax. This is accomplished in a number of ways. The first is by eliminating certain deductions. Some of these are: Taxes Miscellaneous itemized deductions Personal exemptions The second is […]
There are several tax incentives in the form of credits and deductions currently available to help offset ever increasing higher education expenses for you, your spouse, and dependents. Tax Credits Currently there are two tax credits available. The first is the American Opportunity Tax Credit. This credit is available to qualified students for their first […]
If you itemize deductions, chances are that you are taking a deduction for home mortgage interest. Here are a few things that you should know: Home acquisition debt is defined as a mortgage used to buy, build or improve either your principal residence or a second home. It must be secured by the home. You […]
Well, as with most tax questions, the answer is, it depends. Investor vs. Dealer. When we think of a real estate investor, we think of someone who purchases and holds real estate for rental income and/or appreciation over a period of time. A typical investor might own a few rental properties, keep them for several […]