There’s a chill in the air (depending on your latitude) and the leaves are turning color. Naturally, your thoughts turn to next April’s taxes. No? Unfortunately, yes, it’s time to start thinking about your 2014 tax bill. Some strategies can be … [Read more...]
Losses on Sales to a Related Party
Due to the opportunity for abusive transactions between related parties, the IRS generally does not allow a taxpayer to take a tax loss on a sale of property to a related party. The problem Suppose Carl has a vacation home on a lake. He invites … [Read more...]
Taxes: Rental of your residence or vacation home
The tax treatment of income and expenses related to renting your residence or vacation home varies, depending on how many days the property is used for rental purposes as opposed to personal purposes. A residence with personal and rental use … [Read more...]
Auto deductions – the standard mileage rate method
You can deduct the cost of business use of your car using one of two methods: the actual expense method or the standard mileage rate method. The actual expense method usually gives bigger deductions in the year of acquisition. The standard mileage … [Read more...]
Self-employment Tax
Employees pay social security and Medicare taxes on their wages. Self-employment (SE) tax is the equivalent tax paid by self-employed individuals. In this post we’ll discuss the rate of SE tax; types of income subject to it; how to report it; … [Read more...]
Individual Taxes: Withholding, Estimated Payments, and Underpayment of Estimated Tax Penalty
Individuals who owe tax with their Form 1040 or extension might owe more than they expected. The federal income tax is a pay-as-you-go tax. If you wait until you file your return to pay your tax, penalties may apply. There are two ways to pay as you … [Read more...]