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Category: Finance

Self-Directed IRA’s for Real Estate: Good or Bad?

The stock market is tanking while real estate continues to skyrocket. If your retirement savings have taken a hit, you may be wondering if this is the time to invest in real estate through your IRA, Roth IRA, or SEP-IRA. You can’t invest in real estate with a traditional IRA or Roth IRA (or SEP-IRA) you establish with a bank, brokerage, or trust company. These types of IRA custodians typically limit you to a narrow range of investments, such as publicly traded stocks, bonds, mutual funds, ETFs, and CDs. But you can invest in real estate if you establish a
Finance

New Massive FinCEN Filing Requirement for All Small Businesses

Do you own a corporation, limited liability company (LLC), limited partnership, limited liability partnership, limited liability limited partnership, or business trust? Or are you planning to form one of these entities? If so, be alert. There’s a new federal filing requirement coming. Back in 2021, Congress passed a new law called the Corporate Transparency Act (CTA) that requires corporations, LLCs, and other business entities to provide information about their owners to the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN), which is a unit separate from the IRS. The CTA is part of a government crackdown on corruption, money

Increase Profit and Cashflow with Financial Analysis

Financial Analysis is the process of evaluating businesses, projects, budgets, and other finance-related transactions to determine their performance and suitability. This is an important part of managing a growing business. Doing financial analysis every month will allow you to calculate markup on products or services you need to maintain your profit margins, control your cost margin and improve your revenue margin. A Federal Reserve study found financially healthy small businesses have four things in common: they have strong knowledge and experience with various types of credit, keep a higher level of unused credit balances, put together a budget more regularly

The IRS Knows You Have Crypto: Operation Hidden Treasure

Cryptocurrency such as bitcoin, Luna, UST and Tether (USDT) have been in the news lately. So what is crypto? Crypto is not legal money. It is property, similar to gold. Like gold, its use can result in taxable income. The IRS is concerned that you and millions of Americans are using crypto without paying tax on the earnings. To clarify that it expects you and other taxpayers to report crypto earnings, the IRS added the following question about cryptocurrency to the top of Form 1040: At any time during 2021, did you receive, sell, exchange, or otherwise dispose of any

A Cruise To Mexico For Business? Tax Deductible

You may not have thought of this, but taking a cruise ship to Mexico for a business meeting is acceptable as a deductible form of transportation! Because Mexico is in the tax law–defined North American area, the law says that you need no stronger business reason to deduct your trip to Mexico than you need to deduct a trip to Chicago, Illinois, or Scottsdale, Arizona. Less-than-one-week rule. If your trip is outside the 50 states but inside the North American area and if the trip is for seven or fewer days (excluding the day of departure), then the law allows

How to Send Tax Documents Correctly to Avoid IRS Trouble

You have heard the horror stories about mail sent to the IRS that remains unanswered for months. Reportedly, the IRS has mountains of unanswered mail pieces in storage trailers, waiting for IRS employees to process them. Because the understaffed IRS is having so much trouble processing all the documents it receives, you need to protect yourself when you send an important tax filing due by a specific deadline. If you can file a document electronically, do so. The IRS deems such filings as filed on the date of the electronic postmark. If you must file a physical document with the

A Partnership With Multiple Partners: Good or Bad?

The generally favorable federal income tax rules for partnerships are a common reason for choosing to operate as a partnership with multiple partners instead of as a corporation with multiple shareholders. The most important partnership tax benefit rules can be summarized as follows: You get pass-through taxation. You can deduct partnership losses (within limits). You may be eligible for the Section 199A tax deduction. You get basis from partnership debts. You get basis step-up for purchased interests. You can make tax-free asset transfers with the partnership. You can make special tax allocations. Partnership taxation is not all good stuff. There

Renting a Vacation Home for Extra Income. Taxable?

If you have a home that you both rent out and use personally, you have a tax code-defined vacation home. Under the tax code rules, that vacation home is either a personal residence or a rental property. The tax code classifies your vacation home as a rental property if you rent it out for more than 14 days during the year, and your personal use during the year does not exceed the greater of (a) 14 days or (b) 10 percent of the days you rent the home out at fair market rates. Count actual days of rental and personal

Health Savings Accounts(HSA): The Ultimate Retirement Account

It isn’t easy to make predictions, especially about the future. But there is one prediction we’re confident in making: you will likely have substantial expenses for health care after you retire. Personal financial experts estimate that an average retired couple age 65 will need at least $300,000 to cover health care expenses in retirement. You may need more. The time to save for these expenses is before you reach age 65. And the best way to do it may be a Health Savings Account (HSA). After several years, you could have a fat HSA balance that will help pave your

Self-Employed Or Employee Taxes What’s Better?

Perhaps you get a check, or you receive cash for the services you provide your employer or customers.  If you get a paycheck have you ever looked at your paystub? Do you understand what your paystub tells you? It breaks down gross pay, net pay, withholding, pre-tax and post-tax deductions. You probably get something called a W-2 sometime in January following the new year. Does this ring a bell?  Perhaps you get paid with cash, are you an independent contractor? That’s someone who works odd hours on call or does special one-off jobs for a business. If so, you probably