If a small business is operated as a sole proprietorship, the owner may have thought about forming a limited liability company (LLC) to protect his or her assets. Or, if the owner is launching a new business, he or she may want to know what options are available for setting it up. This article explains the basics of operating as an LLC and why it might be a good choice for a small enterprise.
Whether a business is new or established, losses can happen. The federal tax code may help soften the blow by allowing businesses to apply losses to offset taxable income in future years, subject to certain limitations.
Many people who began working from home during the COVID-19 pandemic are still doing so, full or part-time. Business owners who moved their operations to a home office, or at least began performing some work functions there, may be able to claim home office expenses against their business income. This article describes how to qualify for home office deductions and the two methods owners can choose from to claim this tax break.
Many people who began working from home during the COVID-19 pandemic are still doing so, full or part-time. Business owners who moved their operations to a home office, or at least began performing some work functions there, may be able to claim home office expenses against their business income. This article describes how to qualify for home office deductions and the two methods owners can choose from to claim this tax break.
When a married couple files a joint tax return, each spouse is “jointly and severally” liable for the full amount of tax on the couple’s combined income. Therefore, the IRS can pursue either spouse to collect the entire tax — not just the part that’s attributed to one spouse or the other. This includes any tax deficiency that the IRS assesses after an audit, as well as any penalties and interest. But there may be relief. A brief sidebar addresses what to do about future returns.
As a result of the current estate tax exemption amount ($12.92 million in 2023), many people are no longer concerned with federal estate tax. This article points out that before 2011, a much smaller dollar amount resulted in many people attempting to avoid estate tax. Now, because many estates won’t be subject to estate tax, more planning can be devoted to saving income taxes for heirs. A sidebar briefly looks at certain exclusions or discounts.
Despite the robust job market, some people are still losing their jobs. For those who are laid off or terminated from employment, taxes are probably the last thing they’re concerned about. However, they may face tax implications when personal and professional circumstances change, and there may be some decisions to make.
The volatility in the stock market may have caused the value of retirement accounts to decrease. To those with traditional IRAs invested in stocks, a decline may provide a valuable opportunity: that is, taxpayers may be able to convert a traditional IRA to a Roth IRA at a lower tax cost.
Trusts can help affluent individuals and families manage, protect and grow their wealth. But there are a wide variety to choose from, so it’s important to understand the basic concepts behind trusts before choosing one. This article defines trusts and provides an example of how one popular trust type works. A sidebar looks at another example: intentionally defective grantor trusts.
In some cases, homeowners move to new residences, but keep their present homes and rent them out. Homeowners who are considering this are probably already aware of the financial risks and rewards of doing so. However, they should also know that renting out a personal residence carries potential tax benefits and pitfalls.
