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Can you turn business losses into tax relief?
June 4, 2025
Categories: Business, NOL, TCJA
Even well-run companies experience down years. The federal tax code may allow a bright strategy to lighten the impact. Certain losses, within limits, may be used to reduce taxable income in later years. Who qualifies? The net operating loss (NOL) deduction levels the playing field between businesses with steady income and those with income that rises and falls. It lets businesses with fluctuating income to average their income and losses over the years and pay tax accordingly. You may be
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Still have tax questions? You’re not alone
June 4, 2025
Categories: amended return, Record Retention, Tax Records
Even after your 2024 federal return is submitted, a few nagging questions often remain. Below are quick answers to five of the most common questions we hear each spring. 1.When will my refund show up? Use the IRS’s “Where’s My Refund?” tracker at IRS.gov. Have these three details ready: Social Security number, Filing status, and Exact refund amount. Enter them, and the tool will tell you whether your refund is received, approved or on the way. 2.Which
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Corporate business owners: Is your salary reasonable in the eyes of the IRS?
June 3, 2025
Categories: Reasonable compensation
Determining “reasonable compensation” is a critical issue for owners of C corporations and S corporations. If the IRS believes an owner’s compensation is unreasonably high or low, it may disallow certain deductions or reclassify payments, potentially leading to penalties, back taxes and interest. But by proactively following certain steps, owners can help ensure their compensation is seen as reasonable and deductible. Different considerations for C and S corporations C
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The “wash sale” rule: Don’t let losses circle the drain
June 3, 2025
Categories: Capital Loss, Crypto, wash sale rule
Stock, mutual fund and ETF prices have bounced around lately. If you make what turns out to be an ill-fated investment in a taxable brokerage firm account, the good news is that you may be able to harvest a tax-saving capital loss by selling the loser security. However, for federal income tax purposes, the wash sale rule could disallow your hoped-for tax loss. Rule basics A loss from selling stock or mutual fund shares is disallowed if, within the 61-day period beginning 30 days before the
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An education plan can pay off for your employees — and your business
May 27, 2025
Categories: Education Assistance Plan, Section 127
Your business can set up an educational assistance plan that can give each eligible employee up to $5,250 in annual federal-income-tax-free and federal-payroll-tax-free benefits. These tax-favored plans are called Section 127 plans after the tax code section that allows them. Plan basics Sec. 127 plans can cover the cost of almost anything that constitutes education, including graduate coursework. It doesn’t matter if the education is job-related or not. However, you can choose to
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Understanding the “step-up in basis” when inheriting assets
May 21, 2025
Categories: Basis, Capital Gain, Capital Loss, inheritance, Stepped down, Stepped up
If you inherit assets after a loved one passes away, they often arrive with a valuable — but frequently misunderstood — tax benefit called the step-up in basis. Below is an overview of how the rule works and what planning might need to be done. What “basis” means First, let’s look at a couple definitions. Basis is generally what the owner paid for an asset, adjusted for improvements, depreciation, return of capital, etc. Capital gain (or loss) equals
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Explore SEP and SIMPLE retirement plans for your small business
May 20, 2025
Categories: SEP-IRA, Simple IRA, Small business
Suppose you’re thinking about setting up a retirement plan for yourself and your employees. However, you’re concerned about the financial commitment and administrative burdens involved. There are a couple of options to consider. Let’s take a look at a Simplified Employee Pension (SEP) and a Savings Incentive Match Plan for Employees (SIMPLE). SEPs offer easy implementation SEPs are intended to be an attractive alternative to “qualified” retirement plans, particularly
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Small business alert: Watch out for the 100% penalty
May 7, 2025
Categories: 100% Penalty, Penalties, Small business
Some tax sins are much worse than others. An example is failing to pay over federal income and employment taxes that have been withheld from employees’ paychecks. In this situation, the IRS can assess the trust fund recovery penalty, also called the 100% penalty, against any responsible person. It’s called the 100% penalty because the entire unpaid federal income and payroll tax amounts can be assessed personally as a penalty against a responsible person, or several responsible
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What tax documents can you safely shred? And which ones should you keep?
May 6, 2025
Categories: filing taxes, Record Retention, Tax Records
Once your 2024 tax return is in the hands of the IRS, you may be tempted to clear out file cabinets and delete digital folders. But before reaching for the shredder or delete button, remember that some paperwork still has two important purposes: Protecting you if the IRS comes calling for an audit, and Helping you prove the tax basis of assets you’ll sell in the future. Keep the return itself — indefinitely Your filed tax returns are the cornerstone of your records. But
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Discover if you qualify for “head of household” tax filing status
April 30, 2025
Categories: Filing Status, Head of Household
When we prepare your tax return, we’ll check one of the following filing statuses: single, married filing jointly, married filing separately, head of household or qualifying widow(er). Only some people are eligible to file a return as a head of household. But if you’re one of them, it’s more favorable than filing as a single taxpayer. To illustrate, the 2025 standard deduction for a single taxpayer is $15,000. However, it’s $22,500 for a head of household taxpayer. To be