Morris+D'Angelo


Ready, Set, Depreciate

Bonus Depreciation, Depreciation, IRC Section 179, Regular Depreciation, Tax Rules
Parts of this article are published with permission from Bradford Tax Institute, © 2021 Daniel Morris, Morris + D’Angelo When you buy real property (or personal property that lasts more than one year) to use in your business, you may have up to three options for deducting the cost: Regular Depreciation Bonus Depreciation IRC Section 179 expensing (technically, depreciation in advance) Regular Depreciation takes several years. Bonus Depreciation allows you, through 2022, to deduct 100 percent of the cost of personal property in one year. IRC Section 179 ...

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Is Your Sideline Activity a Business (Good) or a Hobby (Not Good)?

Business Loss Deduction, Deductible Expenses, Federal Income Tax, Form 1040, Hobbies, Hobby, Hobby Loss Rules, Loss Deductions, Safe-Harbor Rules, Sideline Business
Parts of this article are published with permission from Bradford Tax Institute, © 2021 Daniel Morris, Morris + D’Angelo Do you have a "Sideline Activity" that you think of as a Business? From this "Sideline Activity", are you claiming Tax Losses on your Form 1040? Will the IRS consider your Sideline a Business and allow your Loss Deductions? The IRS likes to claim that money-losing sideline activities are hobbies rather than businesses. The federal income tax rules for hobbies have been anti-taxpayer for years, and now an unfavorable change enacted in the Tax ...

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Don’t Miss Out on the Employee Retention Credit

Employee Retention Credit, ERC, COVID Tax Credits, PPP Forgivable Loan, Paycheck Protection Program, PPP, Small Business
Parts of this article are published with permission from Bradford Tax Institute, © 2021 Daniel Morris, Morris + D’Angelo Since the start of all the challenges that the COVID-19 pandemic brought to us with all of its mandates, many inconveniences, and I’m sure business anxiety, one thing is for sure; that your U.S. Government does not want your small business to fail. The U.S. Federal Government wants your small business to survive and likely thrive. Since COVID-19 struck, the government has created free and/or easy money in the form of tax credits and loans that ...

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Say Goodbye to the ERC for the Fourth Quarter

American Rescue Plan Act of 2021, COVID Tax Credits, Employee Retention Credit, ERC, Paycheck Protection Program, PPP, PPP Forgivable Loan, Small Business
Parts of this article are published with permission from Bradford Tax Institute, © 2021 Daniel Morris, Morris + D’Angelo Regarding the Employee Retention Credit (ERC): lawmakers giveth, and lawmakers taketh away. In this case, what lawmakers did is unfortunate. It’s like magic: now you see it, now you don’t. On March 11, 2021, the American Rescue Plan Act of 2021 became Public Law 117-2. This new law extended the ERC to the third and fourth quarters of 2021, as we wrote about in Don’t Miss Out on the Employee Retention Credit (August 2021). On November ...

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2021 Last-Minute Year-End Tax Strategies for Your Stock Portfolio

Capital Gains, Capital Losses, Ordinary Income, Stock Dividends, Stock Portfolio, Stocks, Tax Code, Tax Rules, Tax Strategies, Wash-Sale Loss Rule, Year-End Tax Strategies
Parts of this article are published with permission from Bradford Tax Institute, © 2021 Daniel Morris, Morris + D’Angelo The Basic Strategy: Avoid the high taxes (up to 40.8 percent) on short-term capital gains and ordinary income. Lower the taxes to zero—or if you can’t do that, then lower them to 23.8 percent or less by making the profits subject to long-term capital gains taxes. Think of this: you are paying taxes at a 71.4 percent higher rate when you pay at 40.8 percent rather than the tax-favored 23.8 percent. And if you can avoid that higher rate ...

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2021 Last-Minute Year-End Tax Strategies for Marriage, Kids, and Family

Alimony, Kiddie-Tax, Mortgage Deductions, Tax Bracket, Tax Deductions, Tax Optimization, Tax Strategies, Year End
Parts of this article are published with permission from Bradford Tax Institute, © 2021 Daniel Morris, Morris + D’Angelo If you have children under the age of 18 and you file your business tax return as a proprietorship or partnership, you can find big savings in the work your children do for your business. And if you operate as a corporation, don’t neglect to hire your children; there are good savings for you there, too. In this article, you will find five year-end tax-deduction strategies that apply if you are getting married or divorced, have children ...

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2021 Last-Minute Vehicle Purchases to Save on Taxes

Depreciation Strategies, Depreciation-Limited, Gross Vehicle Weight Rating), GVWR, MACRS, MACRS Depreciation, Short Bed, Tax Cuts and Jobs Act, TCJA
Do you need a replacement business car, SUV, van, or pickup truck? Do you need tax deductions this year? If you answered yes to both questions, you need to examine this article and get ready to smile. Thanks to the Tax Cuts and Jobs Act (TCJA) tax reform, you can write off the cost of a vehicle purchase faster than ever before—including, in many cases, up to 100 percent of the cost in 2021. Get the Timing Right Don’t procrastinate. If you want the vehicle deduction, you need to: Own the vehicle, and Place it in business service on or before ...

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2021 Last-Minute Year-End General Business Income Tax Deductions

Income Tax Deductions, IRS, IRS Safe Harbor, QIP, Qualified Improvement Property, Real Property, Schedule C, Tax Cuts and Jobs Act, TCJA, Year-End Strategy
Parts of this article are published with permission from Bradford Tax Institute, © 2021 Daniel Morris, Morris + D’Angelo The purpose of this article is to get the IRS to owe you money. Of course, the IRS is not likely to cut you a check for this money (although in the right circumstances, that will happen), but you’ll realize the cash when you pay less in taxes. This article gives you six powerful business tax deduction strategies that you can easily understand and implement before the end of 2021. 1. Prepay Expenses Using the IRS Safe Harbor You just ...

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Is a Property Fix-up and Sale an Investor or a Dealer Property?

Dealer Property, Investor Property, Long Term Capital Gains, Ordinary Income, Property Fix Up, Real Estate Dealer, Real Estate Investor, Self-Employment Taxes
Parts of this article are published with permission from Bradford Tax Institute, © 2021 Daniel Morris, Morris + D’Angelo Background I’m an independent computer consultant who nets $100,000 from my proprietorship. I bought a house in March 2019, fixed it up, and sold it in April 2020 at a net profit of $85,000. I bought another house in May 2020, fixed it up, and sold it in June 2021 at a net profit of $125,000. Question These are my first two properties. Does the IRS consider me a real estate dealer or a real estate investor? Answer ...

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