TMTW #446 – Get Ready to Launch a Solo 401K Retirement Plan

Tax and Money Tip of the Week:
Get Ready to Launch a Solo 401K Retirement Plan
August 14, 2019 | No. 446


Click Here to read an article about solo 401K plans.

Questions or Comments?
You can add comments on the blog, call 919-847-2981, or visit our web site. We look forward to hearing from you.

Mark Vitek, CPA/PFS, CFP®
…until next week

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TMTW #445 – September 16, 2019 Tax Deadline: Individual Estimated Taxes and Tax Planning Checkups

Tax and Money Tip of the Week:
September 16, 2019 Tax Deadline:  Individual Estimated Taxes and Tax Planning Checkups
August 7, 2019 | No. 445

This is the time of year in our CPA practice that I work with small business owners and individuals to perform tax checkups to help them project their tax liabilities for 2019 and make tax saving recommendations of moves they can make between now and year-end. Frequently, just defining the amount of taxes they owe via these planning services helps manage their cash flow so the businesses and individuals don’t have a big amount due and/or surprise each Spring when they prepare their tax returns.

Coming up September 16, 2019 is the date in which the 3rd installment for individuals that have income that is not taxed and withheld (like W-2 income) is due.

Self employed businesses, e.g. Proprietor Schedule C filers, folks that own S Corporations, Partnerships, LLCs, or other flow-through entities must estimate their unpaid income and/or self-employment taxes for the period January 1-August 31, 2019 and pay ½ of this amount to IRS and/or NC Dept of Revenue on September 16, 2019 and the other ½ of this amount on or before January 15, 2020.  (April 15th and June 17th of 2019 are also Quarterly Estimated Tax Payment dates that have also passed by if you weren’t aware)

The rules for estimated tax payments depend on your modified adjusted gross income for 2019. “Safety” estimates can be designed to avoid penalties and interest, optimize cash flow, and save taxes

Questions or Comments?
You can add comments on the blog, call 919-847-2981, or visit our web site. We look forward to hearing from you.

Mark Vitek, CPA/PFS, CFP®
…until next week

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TMTW #444 – Spotlight 5 personal tax changes

Tax and Money Tip of the Week:
Spotlight 5 personal tax changes
July 31, 2019 | No. 444

Click Here to read about 5 tax changes that affect individual taxpayers.

Questions or Comments?
You can add comments on the blog, call 919-847-2981, or visit our web site. We look forward to hearing from you.

Mark Vitek, CPA/PFS, CFP®
…until next time

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TMTW #443 – Five Small Business Tax Items

Tax and Money Tip of the Week:
5 Small Business Tax Items
July 24, 2019 | No. 443

Click Here to read about 5 key tax changes regarding small business owners.

Questions or Comments?
You can add comments on the blog, call 919-847-2981, or visit our web site. We look forward to hearing from you.

Mark Vitek, CPA/PFS, CFP®
…until next time

 

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TMTW #442 – Can the IRS Require Odometer Readings with the Mileage Rate?

Tax and Money Tip of the Week:
Can the IRS Require Odometer Readings with the Mileage Rate?
July 17, 2019 | No. 442

Do you claim your business miles at the IRS optional rate?

If so, imagine you are now being audited by the IRS for your business mileage. The IRS has requested odometer readings for your vehicle. You might wonder if the IRS can do this.

The answer is yes. The tax code says that you must substantiate your business vehicle deductions by adequate records or by sufficient evidence corroborating your own statement, including the time and place of the travel and the business purpose.

The standard mileage rate does not reduce the need for vehicle mileage records. In other words, the need for the records that prove business mileage does not change when you use the IRS standard mileage rate. They are the same mileage records you need with the actual expense method.

Here’s what the IRS, in its Internal Revenue Manual, tells its examiners to do when looking at business miles:

To verify total miles for the year, the taxpayer should provide repair receipts, inspection slips or any other records showing total mileage at the beginning of the year as well as at the end of the year.

The bottom line here is that the burden of proof is on you to prove your business mileage as required by the law. Thus, make sure that you retain odometer readings at or near the beginning and end of the year from oil changes, vehicle inspections, or repairs.

Questions or Comments?
You can add comments on the blog, call 919-847-2981, or visit our web site. We look forward to hearing from you.

Mark Vitek, CPA/PFS, CFP®
…until next time

 

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TMTW#441- S Corp Owners: Avoid This S Corporation Health Insurance Deduction Mistake

Tax and Money Tip of the Week:
S Corp Owners: Avoid This S Corporation Health Insurance Deduction Mistake
July 10, 2019 | No. 441

If you own more than 2 percent of an S corporation, you have to do three things to claim a deduction for your health insurance:

  1. You must get the cost of the insurance on the S corporation’s books.

 

  1. Your S corporation must include the health insurance premiums on your W-2 form.

 

  1. You must (if eligible) claim the health insurance deduction as an above-the-line deduction on Form 1040.

The three-step health-insurance procedure also applies under attribution rules (and this could be a surprise) to your spouse, children, grandchildren, and parents if they work for your S corporation, even if they don’t own a single share of S corporation stock directly.

You need to get this S corporation health-insurance thing right. Without the W-2 treatment, the S corporation does not get a tax deduction.

With the correct W-2 treatment, the more than 2 percent shareholder who finds the health insurance premiums on his or her W-2 can claim the self-employed health insurance deduction on Form 1040, provided he or she is not eligible for employer-subsidized health insurance through another job or a spouse’s job.


Questions or Comments?
You can add comments on the blog, call 919-847-2981, or visit our web site. We look forward to hearing from you.

Mark Vitek, CPA/PFS, CFP®
…until next time

 

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TMTW #440 – Happy 4th of July!

Tax and Money Tip of the Week:
Happy 4th of July!
July 3, 2019 | No. 440

Wishing you and your family a Happy 4th of July!


Questions or Comments?
You can add comments on the blog, call 919-847-2981, or visit our web site. We look forward to hearing from you.

Mark Vitek, CPA/PFS, CFP®
…until next time

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