ROTH IRA’S

The Pros and Cons Roth IRAs do not give the taxpayer a tax deduction for the year contributions is made. So why would you want to invest your retirement savings in a Roth? One reason is that all distributions taken out after 5 years of setting up a Roth and after the taxpayer reaches age…

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LOSS DEDUCTIONS For Profit or a Hobby?

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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WHAT BUSINESS MEALS ARE 100% DEDUCTIBLE FOR 2021 AND 2022

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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NOT ALL APRIL DEADLINES WERE MOVED BACK TO MAY

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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BETTER SAFE THAN SORRY; FILE EARLY!

(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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THIRD ROUND OF ECONOMIC IMPACT PAYMENTS

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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WHY WOULD ANYONE ARGUE AGAINST a HIGHER MINIMUM WAGE?

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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Rental Losses

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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