Making the switch from employee to business owner requires some getting used to. One of those adjustments is understanding the difference between the income reported on a K-1 and the amount of cash distributions received. Let’s look at some of the reasons why this happens. Taxable income is not always the same as cashflow When […]

Owning your own business can provide opportunities to reduce taxes that you might not necessarily have as an employee, and the best place to start is to convert personal expenses that you would otherwise incur to legitimate business expenses. Below is a summary of some of the most common personal expenses that can be converted […]

What is an Enrolled Agent? Although no formal credentials are required to work as a tax preparer in the U.S., hiring one with a professional license protects your interests. Besides the obvious choice of hiring a CPA, an Enrolled Agent, or EA, is another option. Enrolled Agents are licensed at the federal level by the […]

On Friday, December 20, 2019, the Setting Every Community Up for Retirement Enhancement (SECURE) Act was signed into law.  The broad intent of the legislation is to make it easier for families to save more for retirement, but it also includes several unfavorable provisions intended to offset the loss of tax revenue likely to result from […]

Municipal bonds are very appealing to investors because of one important attribute: municipal bond interest is exempt from federal income tax. But while tax-free income sounds great, there is a catch!  The interest an investor can earn on municipal bonds is generally lower than the interest an investor can earn on a comparable taxable corporate […]

Interest on personal loans and credit cards is generally not a deductible expense. But one important exception to this general rule is when you use a personal credit card or take out a personal loan to pay for business-related expenses. In this situation, the interest is deductible as a business expense provided you meet the following […]

When an investor sells a stock or mutual fund that produces a loss, this capital loss reduces taxable income by first offsetting any capital gains, and then by reducing taxable income up to $3,000. Net capital losses in excess of $3,000 generate what is called a capital loss carryforward that can be used in future tax years.  […]

In today’s highly mobile society, it’s not unusual for people to live and work in different states, and that mobility can have tax implications. In this two-part series, we will look at what that can mean for your taxes, starting with your federal income tax return. Travel may be deductible The primary issue to consider when […]

Welcome to Florida!  You can now enjoy the benefits of living in a state with no state income tax.  But don’t put your checkbook away just yet. In certain situations, your former state can tax income that you receive even after you establish residence in Florida.  Paraphrasing a famous movie quote, just when you thought you […]

In the event of an IRS audit, you need to provide documentation for your deductible expenses. Some people keep the receipts, while others keep credit card statements.  So what exactly do you need to keep? Keep the receipt and the credit card statement In general, for everything you want to deduct, you should keep the […]