Are You Changing Your Behavior to Match the New Tax Rules in Effect Now?
by TaxDoctor on August 10, 2018 at 1:55 pm
Many people don’t really think about their taxes until the snow is flying and the first document arrives in the mail. Why would you, right? Year in and year out people often get into a set of habits around getting things together for their preparer. That`s usually not a bad thing, but in a year like 2018 when so many things have changed we see on the horizon a sea of surprised faces when they find out their usual $1,200 refund is now a $500 balance owed to the IRS. Or their usual $1,000 tax bill is now $1,900. Of course, like any changes there will also be winners receiving happy surprises. But what side will you be on? If[…] The post Are You Changing Your Behavior to Match the New Tax Rules in Effect Now? appeared first on Tax What If Doctor. […]
Helping Clients Not Pay Tax on a Type of “Phantom Income”
by TaxDoctor on August 3, 2018 at 2:59 pm
First, let’s say upfront that a business that has sources of income and expenses and leaves 25% profit on the table is an awesome business! Example: A Plumber makes $400,000 a year and spends $300,000 a year on plumbing tools, trucks, repairs, staff, insurances, etc., and walks away with $100,000 at the end of the year that he can put in his pocket; great business! It would be rare that it’s that easy. More likely, he puts $60,000 in his pocket and sneaks a few personal expenses into his plumbing books. In a very rare case in the other direction, 50% in expenses and 50% profit, but he probably wouldn’t do that every year. That would be a “magic year” with no repairs to fleet vehicles, no staff turnover,[…] The post Helping Clients Not Pay Tax on a Type of “Phantom Income” appeared first on Tax What If Doctor. […]
Does the IRS Really Have “Yard Sales?” Yes, All The Time!
by TaxDoctor on July 27, 2018 at 1:48 pm
The tax code is much more fluid than the public is truly aware of and deductions and credits come and go all the time. Deductions like mileage for business owners change with the cost of gasoline, for instance, and can go up and down annually. Often, it is actual programs that come and go, like energy tax credits or being able to transfer an IRA to a charity directly without paying income tax but still satisfying RMD requirements. Often, these programs are temporary, and depending on whether the government believes that they have met their objectives, sometimes expire, or may become permanent. Capital Gains has remained on sale! It’s been changed over the years, but under the original Bush tax[…] The post Does the IRS Really Have “Yard Sales?” Yes, All The Time! appeared first on Tax What If Doctor. […]
Finish Line 2025 a Marathon for Tax Planners and Their Clients
by TaxDoctor on July 12, 2018 at 7:51 pm
The IRS just gave guidance that a nondeductible IRA may still in fact be converted into a Roth IRA. For those who didn’t know about that planning strategy in the past, at a certain level of income people were no longer allowed to deduct their IRA contributions. Many advisors thought that the rule was that the higher income earner could not open an IRA, which was incorrect. You simply lost the ability to deduct them. Why would I open an IRA that I could not deduct? It was still tax differed growth after it was opened, so a “tax differed annuity” that could be invested in any way an IRA could be. Later, with the creation of a Roth IRA[…] The post Finish Line 2025 a Marathon for Tax Planners and Their Clients appeared first on Tax What If Doctor. […]
Summer is the Time to Fix your Income Tax Problem!
by TaxDoctor on June 29, 2018 at 1:52 pm
In May, people will be filing there 2018 Tax Return in another 7 months with a recurring Moooooan and Grooooooan. Now is the time to take your preventative medicine and avoid the pain! We all form habits, we are human. We try to develop good ones to replace the bad ones and often we are successful but most successes don’t come without a coach, cheerleader or some kind of support. Tax Time is usually a time of regret over not being successful at last years promise to oneself, “I not going to pay this much again, I`m going to keep better records and search out a Tax plan or some professional help and get smarter about this!” Then summer comes[…] The post Summer is the Time to Fix your Income Tax Problem! appeared first on Tax What If Doctor. […]