Deducting business losses on your tax return can get you a free IRS audit. If the activity is deemed to be a hobby and not a business it can also get you additional taxes, penalties, and interest. Income from a hobby is taxable but the expenses are not deductible. Not very fair, but who said…

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To help the COVID-19 ravaged restaurant industry, Congress is allowing a temporary 100% deduction for business meals provided by a restaurant. The term “restaurant” means a business that prepares and sells food or beverages to retail customers for immediate consumption, regardless of whether the food or beverages are consumed on the business’s premises. In the…

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X – TRUST RETURNS X – FIRST QUARTER ESTIMATED TAX PAYMENTS Individual taxpayers can wait to file their 2020 tax returns and pay the balance due on these returns. The Internal Revenue Service has extended both deadlines to May 17, 2021. However, first quarter estimated tax payments are still due April 15, 2021. Many taxpayers…

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(Do not be Lured into Filing Later) According to a report from the General Accounting Office, each year the Internal Revenue Service pays out billions in fraudulent refunds to identity thieves. That’s billion with a “B”. Do not let your refund go to the thieves! Protect yourself by filing as early as possible. The extended…

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The Internal Revenue Service announced that the third round of Economic Impact Payments will begin immediately. Following approval of the American Rescue Plan Act, the first batch of payments will be sent by direct deposit. Additional batches of payments will be sent in the coming weeks by direct deposit and through the mail as a…

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1. Fewer workers may be hired. This would result in increased unemployment among the very workers the minimum wage is designed to help. Besides increasing our deficit, it also increases people’s dependency on the government. Workers then become idle and lose their work skills and habits. 2. The higher wage costs may be passed on…

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Large rental losses claimed by real estate professionals are an IRS red flag. Duh! Real estate pros must meet two tests to pass the passive activity loss rules and deduct their rental losses. They must 1) spend over half of their working time and 2) more than 750 hours a year materially participating in each…

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3 Questions Did you know that you get an 8% increase in your social security benefits for each year you delay claiming it past your full retirement age? Did you know that you can claim benefits based on your spouse’s work record? Did you know that you are NOT eligible for Medicare until you are…

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A business owner can legally hire their kids. It is a great way to build a work ethic and provide some spending money to your children. Its also a great way to get a tax deduction. This can move some of your taxable income to your kid’s lower tax rates. Your children can also invest…

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Is a business vacation an oxymoron? Not if you plan it properly! The trick is to sandwich your pleasure between your work. First you need to plan more workdays than days of pleasure. Sorry, no way around that if you want to write-off most of your trip. Your primary purpose must be for business therefore…

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