212 results for author: Daniel Morris

The Ugly Rule for S Corporation Owners: Unlock the Secrets to Maximizing Your Health Insurance Deductions!

An ugly rule applies to how S corporation owners deduct the cost of health insurance that a corporation puts on its W-2s. The words that make this an ugly rule are “earned income,” and this is unusual because you generally think of earned income as a good thing. But for the S corporation owner who hopes to deduct his or her health insurance as a self-employed health insurance deduction on Schedule 1 of the ownerʼs personal Form 1040, the term “earned income” can create ugly results (hence the “ugly rule”). Applying the Ugly Rule As you likely know from our prior articles, the S corporation deducts as W-2 wages the cost of ...

Travel to a Fancy Resort Hotel Where You Use Your Laptop for Continuing Education (CE)

You may have stumbled on an unusual Continuing Education (CE) opportunity that feels like a vacation. It works like this: You take the classes on your laptop. You sit alone in your five-star resort hotel room. During the class, you are on the internet with other attendees who are sitting in other five-star resort hotel rooms in the same time zone. You attend the class for just over four hours each class day. You earn CE credits. Now you have the basics. What Could You Deduct? Assuming the CE event occurs in the Virgin Islands at a St. Thomas resort and qualifies as a tax-deductible business education event, you could deduct ...

Estate Planning for the Rest of Us

Whoever won that huge $997.6 million cash value Powerball jackpot last November needs some serious estate planning advice. Ditto for the winner of the $724.6 million cash value Mega Millions jackpot in January. Sadly, you did not win either. Nor did you inherit gazillions from your rich Uncle Fred, despite kissing up to him for all those years. Rats! Even so, you probably still need an estate plan. We will explain why. Don’t Fixate on the Big Federal Estate Tax Exemption You are probably among the vast majority who are not currently exposed to the federal estate tax, thanks to todayʼs ultra-generous $12.92 million exemption for ...

Tax Credits for Your Electric Vehicles: The Latest from the IRS

After a many-month-long wait, the IRS has finally issued its proposed regulations for the new clean vehicle tax credit and the commercial clean vehicle credit. With this new IRS guidance and its previous guidance, we have answers to most of the questions about how Electric Vehicle (EV) credits work. The credits are available for qualifying fully electric cars, plug-in hybrid EVs (PHEVs), and fuel cell vehicles. There are four ways you can potentially benefit from a federal tax credit for an EV you place in service in 2023 or later: Purchase an EV, and claim the clean vehicle credit. Lease an EV, and benefit from the lessor’s EV ...

Don’t Expose Yourself with Improper Use of the $75 Rule

When the $75 rule applies, you don’t need a receipt. The problem with this rule is that it is often thought to apply to all tax deductions. That’s wrong. Now, think of the taxpayers who incorrectly apply the $75 rule to all of their tax deductions. They are exposed to a massive loss of deductions and likely some penalties too. The $75 Rule IRS Reg. Section 1.274-5(c)(2)(iii) contains the $75 rule.1 Notice 95-50 contains a clear explanation of what the $75 rule applies to.2 Here’s how it works: You don’t need a receipt for business travel expenses that are less than $75, with two exceptions: (1) you always need a receipt for ...

Business Gym for Your Employees, and Maybe You Too

It's no secret that you have many tax advantages when you operate your own business. For example, setting up a business gym on your business premises or in a separate building can create A tax deduction for the business, and Tax-free benefits for the employees—and possibly for you too. But you need to pick the right tax code section along with the right IRS regulations to ensure deductions and tax-free status. The Winding Road You would think that lawmakers could give you a clear tax path to a business gym deduction. But instead, you have a winding road before you. Don’t worry! We’ll create a clear path. But first, you ...

If I Hire My Kids, Can I Give Them Tax-Free Education Benefits?

Yes! Potentially, in two different ways. Here’s how. Payments for Job-Related Education Your business can reimburse an employee for certain education expenses, and the reimbursements will be treated as tax-favored working condition fringe benefit payments. For the employee, that means the reimbursements are free of any federal income tax hit or federal employment tax hit. Nice! For your business, that means the reimbursements are deductible as employee compensation expenses. Also nice! This favorable federal tax treatment is generally allowed if The education is required by your business, or by law or regulation, for the ...

The Underdog Effect: Why You Should Never Underestimate the Power of Resilience

The NCAA men's college basketball national tournament is one of the most exciting sporting events of the year. It pits the best college basketball teams against each other in a single-elimination tournament that leaves fans on the edge of their seats. While this tournament is always exciting, the 2023 NCAA tournament was particularly interesting because the experts were so horrifically incorrect. In brief, while it can be difficult for underdogs to surprise the masses, it certainly does happen. Take, for example, the NCAA tournament where all of the top seeds were knocked out before the finals. In a truly remarkable upset, a 16-seeded team even ...

The Global Supply Chain: A Self-Interested Network Working to Deliver Fresh, Safe, and Affordable Food

The global food supply chain is complex and interconnected. Independent and associated producers, brokers, distributors, truckers, and front-line personnel collectively and seamlessly network to deliver phenomenal results to businesses and consumers. The system works. Well more times than not it works. And by working, I mean delivering fresh, safe, and fairly priced food products on a global basis. The global supply chain starts with farmers who nurture plants and animals destined to feed the world. These commodities are then sold to processors who clean, package, and transform them for distribution. Distributors, leveraging systems, deliver the ...