What You Will Learn This guide covers what creates a Section 179 carryover, the rules that govern it, how to report it on Form 4562, how it interacts with the QBI deduction, and what happens to it when your business structure changes. Section 179 is one of the most powerful tools in the tax code…
An IRS audit notice is stressful under any circumstances. When you open the letter and realize you cannot locate the receipts they are asking about, the stress compounds immediately. What happens next, and how bad can it get? The answer depends on several factors: the type of audit, what the IRS is questioning, and how…
If your business has employees, Form 941 is one of the most important recurring tax obligations you have. Filed four times a year, it reports the federal income tax you withheld from employee wages plus your share of Social Security and Medicare taxes. Get it right and it is a routine administrative task. Get it…
Every tax season, millions of investors, partners, and S corporation shareholders open their mailboxes and find a Schedule K-1 waiting for them. For many people, this form triggers one immediate reaction: confusion. If you have ever stared at a K-1 and wondered what Box 2 actually means, why some income is labeled passive, and some…
The delicate balance of drawing a salary and minimizing taxes can feel overwhelming for business owners. If you’re running an S-Corp, understanding S-Corp reasonable compensation is vital. In this blog, you’ll learn what reasonable compensation means. You’ll also discover why it matters for your business and potential IRS consequences. Get ready to take charge of…
Making more money is usually a reason to celebrate. However, if you are a high earner, making more money can sometimes come with a surprise from the government. This surprise is called the Net Investment Income Tax, or NIIT for short. Some people call it a 3.8 tax surcharge. It is an extra bill you…
The Foreign Earned Income Exclusion (FEIE) is one of the most valuable tools for U.S. citizens living and working abroad. It allows qualifying individuals to exclude a certain amount of their foreign earnings from U.S. federal income taxes, potentially saving thousands of dollars each year. However, it’s important to understand its history, requirements, and limitations…
Tax policies are never static. They evolve as governments respond to economic changes, global events, and shifts in political priorities. As a business owner, freelancer, or individual taxpayer, it’s important to stay updated on how current events can influence tax policies and practices. Recent years have seen a number of significant changes, from stimulus checks…
When Sarah first opened her coffee shop, all she could think about was making the perfect cup of coffee. She didn’t think much about taxes—until, well, tax season hit. Like many entrepreneurs, she thought she could just “wing it.” Spoiler alert: That didn’t quite work out. Taxes turned out to be a lot more complicated…
Tipping is a major source of income for many service industry workers, but tips are currently subject to federal income tax. Both Donald Trump and Kamala Harris have recently proposed plans to eliminate taxes on tips, offering relief to workers who rely on gratuities. These proposals aim to give workers the chance to keep more…
