AFS Blog
Learn how personal expenses may be partially deductible to your business
One of the best reasons to start a new business is to be able to move some of your personal expenses under your business umbrella and make them deductible. This is not an article about tax evasion. This is about using the tax code to your advantage to minimize the...
Claiming Business Expense Deductions Before You Are in Business
Business deductions are just that. They are expenses incurred in the operation of your business. The IRS says they have to be 'ordinary and necessary' for your business. The IRS doesn't define 'ordinary and necessary' well but common sense is a good guide. Think of it...
How Does the IRS Tax an LLC? It’s Up to YOU
When you file your taxes at the end of the year, you can file a sole proprietorship on a Schedule C, a C Corporation on a Form 1120, an S Corporation on a Form 1120S or a partnership on a Form 1065. There is no tax form for an LLC. If your business is registered...
BUSINESS OR HOBBY-WHY YOU SHOULD CARE
If the IRS determines that your business or investment activity is not conducted as a for-profit business, IRS Section 183 limits deductions to the amount of income from the activity. They will classify your activity as a hobby, and unlike a business, hobby losses...
TAXES ARE GOING UP
Now that we have the results of the elections, I think we can say with certainty that taxes will rise. Democrats now have thin control of the Senate and the House along with the Presidency which will allow Biden to pass at least some of his proposals. Here are some of...
Start Now to Cut your Self-Employment Taxes in 2021
If you earn your living as a contractor, you pay self-employment taxes on the profit your company makes. You could be a real estate agent, a builder, a car salesman, whatever. As a contractor, if you don't pay estimated taxes throughout the year, you're getting hit...
2020 Last-Minute Year-End Tax Strategies for Your Stock Portfolio – Part 5 of 5
This is the last in a series of year-end tax strategies for 2020. The previous 4 have been business related. This article relates to a personal tax reduction strategy. The basic idea here is to avoid the high taxes (up to 40.8% ) on short-term capital gains and...
2020 Last Minute Year-End Medical Plan Strategies – Part 4 of 5
If your business has less than 50 employees, it is a good idea to have a medical plan of some sort in place in your business. Most of the tax rules that apply to medical plans are straight forward when you have fewer than 50 employees. We will describe 6 opportunities...
2020 Last-Minute Year-End General Business Tax Deductions – Part 3 of 5
This article gives you 7 tax deduction strategies that you can easily implement before the end of 2020. Strategy 1 IRS regs contain a safe-harbor rule that allows cash basis taxpayers to prepay and deduct qualifying expenses up to 12 months in advance. That means your...
Year-End Business Tax Strategies for Marriage, Kids and Family – Part 2 of 5
In this article, you will find 5 year-end tax-deduction strategies that apply if you're getting married or divorced, have children who did or could work in your business, and/or have situations where you give money to relatives or friends. STRATEGY 1 Put your children...
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