12 results for tag: IRS

$80 Billion to the IRS: What It Means for You

For the business owner and tax practitioner, the most important part of the Inflation Reduction Act of 2022 was not the tax credit for flashy new electric cars. It was something much more basic: a long-term budget commitment to help the struggling, failing IRS. ...the new funding will impact all taxpayers. The average taxpayer should benefit because the IRS will be able to upgrade its operations and improve its woeful levels of service The Inflation Reduction Act invests an additional $80 billion in the IRS over the next 10 years. This is the biggest budget increase the IRS has ever received. To put this in perspective, it is ...

2022 Last-Minute Year-End General Business Income Tax Deductions

The purpose of this article is to get the IRS to owe you money. Of course, the IRS will not likely cut you a check for this money—although, in the right circumstances, that will happen. But in most cases, youʼll probably realize the cash when you pay less in taxes. This article gives you six powerful business tax deduction strategies you can easily understand and implement before the end of 2022. 1. Prepay Expenses Using the IRS Safe Harbor You have to thank the IRS for its tax-deduction safe harbors. IRS regulations contain a safe-harbor rule that allows cash-basis taxpayers to prepay and deduct qualifying expenses up to 12 ...

Avoid This Payroll Tax Nightmare

Oh my! ... Don’t let this happen to you. Here’s what happened to Mr. Kazmi. First, a little background. Urgent Care Center Inc., an Illinois corporation, employed Mr. Kazmi as a part-time hourly bookkeeper. He had no ownership interest in Urgent Care. He was not an officer of Urgent Care. His name was not on any of Urgent Care’s bank accounts. He did not have check-signing authority for Urgent Care or any power to make payments on behalf of Urgent Care. At all times, Mr. Kazmi worked under the authority and direction of Dr. Senno, the sole owner of Urgent Care, an S corporation. The Problem Urgent Care did not pay its ...

Home-Office Deduction If You Operate as a Corporation

Question What does the IRS audit manual say about the home office for an individual who operates his or her business as a corporation? Answer You will be interested in two boilerplate explanations from the Internal Revenue Manual that examiners use to explain why the IRS is denying the home-office deduction: We [the IRS] have disallowed your deductions for office-in-the-home expenses because you have not established that it was for the convenience of your employer. Voluntary, vocational, or incidental use of part of your home in connection with your employment does not entitle you to a business deduction. If you rent all or part ...

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

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 have to thank the IRS for its tax-deduction safe harbors. IRS regulations ...

Big Mistake: Filing Your Tax Return Late

Parts of this article are published with permission from Bradford Tax Institute, © 2021 Daniel Morris, Morris + D’Angelo What’s Late? You are allowed to extend your tax return and file during the period of extension; that’s not a late-filed return. A late-filed return is filed after the last extension has expired. this is what could undesirably cause Three Bad Things to happen. Three bad things happen when you file your tax return late. Bad Thing #1 The IRS notices that you filed late or not at all. Of course, the “I didn’t file at all” people receive the IRS’s “come on down and bring your tax records” ...

IRS Income Limit Mistake on Home Office Deduction

Can you ever imagine that the IRS could ever be wrong? If the IRS were wrong, what would be your strategy? Situation You use the office in your home as the administrative office for your business. You use your downtown office as your sales or patient office. The downtown office is the office location where you make the cash register ring. Questions What percentage of your gross income comes from the office in your home? Why do you need to know this? Because the IRS Says... Pub. 587: In its home-office publication, the IRS says that because (a) part of your gross business income comes from your home office, and (b) ...