Tax & Accounting Blog - Ting Wimberly CPA

Combine Home Sale with the 1031 Exchange

Combine Home Sale with the 1031 Exchange

Combine Home Sale with the 1031 ExchangeYou don’t often get the opportunity to even consider making a tax-saving double play. But your personal residence combined with a desire for a rental property can provide just such an opportunity.  The tax-saving strategy is to...

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How to Deduct Medicare as a Business Expense

How to Deduct Medicare as a Business Expense

Premiums for Medicare health insurance can add up to a substantial sum. That’s especially true if you have a high income, and you’re married and both you and your spouse are paying premiums.

Fortunately, the premiums can potentially help your tax situation. The dollar benefit of Medicare tax deductions depends greatly on where you can deduct the premiums:

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How to Calculate and Improve Your QBI from a Partnership

How to Calculate and Improve Your QBI from a Partnership

A general partner is taxed on partnership income that comes to him or her in the form of guaranteed payments and profit distributions. Profit distributions are qualified business income (QBI) for the Section 199A 20 percent tax deduction. Guaranteed payments and Section 707(a) payments are not QBI.

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Improvement Property Update

Improvement Property Update

Improvement Property Update Qualified improvement property is any improvement to the interior portion of a building that is nonresidential real property (think office buildings and shopping centers) if you place the improvement in service after the date you place the...

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Terminating Your S Corporation Election

Terminating Your S Corporation Election

Terminating Your S Corporation ElectionTax reform may have you thinking of changing your S corporation to a C corporation, partnership, or sole proprietorship. With such a switch, you need to consider: How do I terminate the S corporation election correctly? What are...

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What Can I Do If My K-1 Omits 199A Information?

What Can I Do If My K-1 Omits 199A Information?

What Can I Do If My K-1 Omits 199A Information? Tax reform’s Section 199A deduction often confuses small-business owners and tax professionals alike. It’s quite possible you’ll get a Schedule K-1 from a business that omits the information you need to calculate your...

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IRS Issues Final Section 199A Regulations and Defines QBI

IRS Issues Final Section 199A Regulations and Defines QBI

IRS Issues Final Section 199A Regulations and Defines QBI Your ownership of a pass-through trade or business can generate a Section 199A tax deduction of up to 20 percent of your qualified business income (QBI). The C corporation does not generate this deduction, but...

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Tax Reform’s New Qualified Opportunity Funds

Tax Reform’s New Qualified Opportunity Funds

Tax Reform’s New Qualified Opportunity Funds Qualified opportunity funds are a new tax-planning strategy created by the Tax Cuts and Jobs Act tax reform. The new funds have the ability to defer current-year capital gains, eliminate some of them later, and then on the...

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Avoiding the Kiddie Tax after Tax Reform

Avoiding the Kiddie Tax after Tax Reform

Avoiding the Kiddie Tax after Tax Reform If your family has trouble with the kiddie tax, you face some new wrinkles for tax years 2018 through 2025 thanks to the Tax Cuts and Jobs Act (TCJA) tax reform. This is one of the many areas where tax planning can pay off. For...

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Answers to Common Section 199A Questions

Answers to Common Section 199A Questions

Answers to Common Section 199A Questions For most small businesses and the self-employed, the 20 percent tax deduction from new tax code Section 199A is the most valuable deduction to come out of the Tax Cuts and Jobs Act.The Section 199A tax deduction is complicated,...

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Avoid the 1099 Prepaid-Rent Mismatch

Avoid the 1099 Prepaid-Rent Mismatch

Avoid the 1099 Prepaid-Rent Mismatch Two questions:Did you prepay your 2019 rent so that you have a big 2018 tax deduction?How do you identify in your accounting records the monies you put on your IRS Form 1099-MISC for the business rent payments to your landlord? For...

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Tax Reform and the Cannabis Industry

Tax Reform and the Cannabis Industry

Tax Reform and the Cannabis Industry You won’t get a Section 199A tax deduction for your cannabis business. But some of the other tax reform changes may make the C corporation a more attractive choice of entity than before.Let’s look at an example. Say the cannabis...

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Changes to Net Operating Losses After Tax Reform

Changes to Net Operating Losses After Tax Reform

Changes to Net Operating Losses After Tax Reform Tax reform made many 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...

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Take Money Out of Your IRA at Any Age Penalty-Free

Take Money Out of Your IRA at Any Age Penalty-Free

Take Money Out of Your IRA at Any Age Penalty-Free You probably think you can’t take money out of your IRAs before age 59 1/2 unless you meet a narrow exception to the unpleasant 10 percent penalty on early distributions. But that’s not true. We have a variety of...

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Does Your Rental Qualify for a 199A Deduction?

Does Your Rental Qualify for a 199A Deduction?

Does Your Rental Qualify for a 199A Deduction? The IRS, in its new proposed Section 199A regulations, defines when a rental property qualifies for the 20 percent tax deduction under new tax code Section 199A. One part of the good news on this clarification is that it...

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Help Employees Cover Medical Expenses with a QSEHRA

Help Employees Cover Medical Expenses with a QSEHRA

Help Employees Cover Medical Expenses with a QSEHRA If you are a small employer (fewer than 50 employees), you should consider the qualified small-employer health reimbursement account (QSEHRA) as a good way to help your employees with their medical expenses. If the...

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How Cost Segregation Can Turn Your Rental into a Cash Cow

How Cost Segregation Can Turn Your Rental into a Cash Cow

How Cost Segregation Can Turn Your Rental into a Cash Cow Cost segregation breaks your real property into its components, some of which you can depreciate much faster than the typical 27.5 years for a residential rental or 39 years for nonresidential real estate....

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Tax Implications of Goodwill

Tax Implications of Goodwill

Tax Implications of Goodwill Here’s a primer to help you avoid confusion about goodwill: As the seller, you have self-created goodwill when the total sales price of your business exceeds the fair market value of its assets, both tangible and intangible. You have...

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Changes to Your Tax-Free Supper Money

Changes to Your Tax-Free Supper Money

The Tax Cuts and Jobs Act (TCJA) Changes to Your Tax-Free Supper Money Here’s how the TCJA applied its tax reform to your supper money meal allowances. Before tax reform, you deducted 100 percent of the supper money cost. Now, because of tax reform, your tax deduction...

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Will Renting Your Home Destroy Your $250,000 Exclusion?

Will Renting Your Home Destroy Your $250,000 Exclusion?

Will Renting Your Home Destroy Your $250,000 Exclusion? The days when you could convert your rental property or vacation home to a principal residence and then use the full $250,000/$500,000 home-sale exclusion to avoid taxes are gone. Here’s how the $250,000/$500,000...

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How the 90-Day Mileage Log Rule Works for You

How the 90-Day Mileage Log Rule Works for You

How the 90-Day Mileage Log Rule Works for You Often in an IRS audit, the examiner will ask for your mileage log at the beginning of the audit. If you do not have a mileage log, then you are in danger of losing more than just vehicle deductions. Think about it. If you...

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Tax Reform Expands Your Section 179 Deduction Privilege

Tax Reform Expands Your Section 179 Deduction Privilege

Tax Reform Expands Your Section 179 Deduction Privilege The new and improved Section 179 deduction gives you more ways to take advantage of immediate tax deductions. It’s somewhat like having a flexible tax shelter in your back pocket for when you need it (and also...

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Reduce Your Taxes by Making Your Spouse a Business Partner

Reduce Your Taxes by Making Your Spouse a Business Partner

Reduce Your Taxes by Making Your Spouse a Business Partner Tax reform changed the rules of the game when choosing your best tax structure. In looking over the possibilities, a properly structured spousal partnership could be your best choice. Here are the tax benefits...

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IRS Rules for Deducting Your Business Gym

IRS Rules for Deducting Your Business Gym

IRS Rules for Deducting Your Business Gym If you have been thinking about the fitness of your employees and the possibility of a gym or other athletic facility, then you need to know the tax rules.  To be tax deductible, your gym or other athletic facility must be...

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Tax Planning for Snowbirds

Tax Planning for Snowbirds

Tax Planning for Snowbirds You can plan your tax-deductible business life to avoid cold winters and hot summers. Spend a moment examining the following four short paragraphs that contain the basic facts from the Andrews case. For six months of the year, from May...

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Hiring Your Children to Work on Your Rental Properties

Hiring Your Children to Work on Your Rental Properties

Hiring Your Children to Work on Your Rental Properties Have you considered hiring your children to work on your rental properties? If so, were you concerned when you did not see a line item for wages on Schedule E of your Form 1040? Don’t let that bother you. The IRS...

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Reduce Self-Employment Taxes by Renting from Your Spouse

Reduce Self-Employment Taxes by Renting from Your Spouse

Reduce Self-Employment Taxes by Renting from Your Spouse As a sole proprietor, you know that the 15.3 percent self-employment tax can eat up your profits in a nhurry.  You may be able to use a simple strategy to ease this tax burden. If you own an office building or...

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Your Personal Home Is Not Your Tax Home

Your Personal Home Is Not Your Tax Home

Your Personal Home Is Not Your Tax Home The fact that your personal home is not your tax home is one income tax issue. Here’s another: Business travel is different from business transportation. Your tax deductions, tax strategies, and tax records hinge on the...

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How to Deduct Your Legal Fees after Tax Reform

How to Deduct Your Legal Fees after Tax Reform

How to Deduct Your Legal Fees after Tax Reform The Tax Cuts and Jobs Act (TCJA), known as tax reform, made it more difficult for you to deduct your legal fees. The new tax reform law suspended (killed is a better word) your legal fees as 2 percent miscellaneous...

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Avoid Being an IRS Target When Your Business Loses Money

Avoid Being an IRS Target When Your Business Loses Money

Avoid Being an IRS Target When Your Business Loses Money If you operate what you think is a business, but that business loses money, it may not be a business at all under the tax code. Such a money-losing activity can look like a tax shelter to the IRS, and that...

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Tax Reform: Planning for Your New 20 Percent Deduction

Tax Reform: Planning for Your New 20 Percent Deduction

Tax Reform: Planning for Your New 20 Percent Deduction As you likely know by now, the Tax Cuts and Jobs Act created a 20 percent tax deduction under new tax code Section 199A. The question for you: Will you reap any benefits from this new deduction? And the second...

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Does Tax Reform Dislike Your Reputation or Skill?

Does Tax Reform Dislike Your Reputation or Skill?

Does Tax Reform Dislike Your Reputation or Skill? Here’s a troubling thought. Did lawmakers put you in the out-of-favor tax group that denies you the 20 percent Section 199A deduction because: your business makes too much money, and it does so thanks to the reputation...

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Tax Reform Creates Desire for the C Corporation

Tax Reform Creates Desire for the C Corporation

Tax Reform Creates Desire for the C Corporation When you first see that 21 percent tax rate for the C corporation, you have to think that this could be the choice of entity for your business operation. Further, when you find yourself in the out-of- favor group for the...

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Tax Reform Allows Bigger Vehicle Deductions

Tax Reform Allows Bigger Vehicle Deductions

Tax Reform Allows Bigger Vehicle Deductions Finally, lawmakers did the right thing by increasing the luxury auto depreciation limits on business cars. The old luxury limits were unrealistic, punitive, unfair, and discriminatory against any car that cost more than...

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Tax Benefit for Business Vehicle Trade-In Eliminated

Tax Benefit for Business Vehicle Trade-In Eliminated

Tax Benefit for Business Vehicle Trade-In Eliminated Beginning January 1, 2018, tax reform no longer allows Section 1031 exchanges on personal property such as your business vehicle.  The trade-in was the most common 1031 exchange of a business vehicle. Now, because...

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Preserve the Deduction with an S Corporation

Preserve the Deduction with an S Corporation

Will your business operation create the 20 percent tax deduction for you? If not, and if that is due to too much income and a lack of (a) wages and/or (b) depreciable property, a switch to the S corporation as your choice of the business entity may produce the tax savings you are looking for.

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Phaseout for New 20% Deduction

Phaseout for New 20% Deduction

  Phase-out for New 20% Deduction If your pass-through business is an in-favor business and it qualifies for tax reform’s new 20 percent tax deduction on qualified business income, you benefit at all times, including being above, below, or in the expanded wage...

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Tax Reform Provides New 20% Deduction

Tax Reform Provides New 20% Deduction

The new 2018 Section 199A tax deduction that you can claim on your IRS Form 1040 is a big deal. There are many rules (all new, of course), but your odds as a business owner of benefiting from this new deduction are excellent.

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Home Office with More Than One Business

Home Office with More Than One Business

Home Office with More Than One Business The office-in-the-home deduction produces good to excellent tax savings by turning personal house expenses into business deductions. Additionally, it enables you to deduct big vehicle expenses by eliminating nondeductible...

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Rental Property as a Business Yields Big Benefits

Rental Property as a Business Yields Big Benefits

DECEMBER, 2017 Rental Property as a Business Yields Big Benefits If your rental property activity meets the definition of a trade or business activity, then your rentals produce the best possible tax benefits. In general, you report your rental properties on Schedule...

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Tax Reform and Rental Real Estate Deductions

Tax Reform and Rental Real Estate Deductions

DECEMBER, 2017 Tax Reform and Rental Real Estate Deductions Two scary words in tax reform are “fairness” and “simplification.” In most cases, this combination raises your taxes and makes the law more complex.  As you likely know, tax reform is in the air again, and it...

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Cashing Out Real Estate Profits without Section 1031

Cashing Out Real Estate Profits without Section 1031

Cashing Out Real Estate Profits without Section 1031 Paying taxes on the sale of your real estate is voluntary. You do not need to volunteer. Whenever you can, avoid the outright taxable cash sale of investment property. To avoid taxes while you build your portfolio...

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Create Cash by Using Antiques in Your Business

Create Cash by Using Antiques in Your Business

22 NOVEMBER, 2017 Create Cash by Using Antiques in Your Business Let’s say you narrowed the purchase of your business desk to either an antique or a regular desk. Each desk sells for $5,000. Which desk gives you the best possible business result? The answer is the...

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Update: 2018 Health Insurance for S Corporation Owners

Update: 2018 Health Insurance for S Corporation Owners

17 NOVEMBER, 2017 Update: 2018 Health Insurance for S Corporation Owners S corporations continue to enjoy good news in 2018 when it comes to health insurance, and this also applies to 2017 taxes. You first have to thank the 21st Century Cures Act for: Reinstating and...

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Using Children’s IRAs to Pay for College

Using Children’s IRAs to Pay for College

12 NOVEMBER, 2017 Using Children’s IRAs to Pay for College If your child has earned income (maybe from working in your business), you may want to consider establishing an IRA for your child. The IRA funds can, in turn, be used to help pay your child’s college...

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Lock Down Vehicle Deductions with a Home Office

Lock Down Vehicle Deductions with a Home Office

  4   NOVEMBER, 2017 Lock Down Vehicle Deductions with a Home Office The IRS gives you two possible strategies for turning otherwise personal mileage into business mileage: Going to a temporary work location Establishing an office in the home as a principal...

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