Deductions

A confident man in an inner-city urban plaza with large buildings in the background.

Are You a Tax-Favored Real Estate Professional?

The general rule for federal income tax is that rental real estate losses are passive activity losses (PALs). An individual taxpayer can generally deduct PALs only to the extent of passive income from other sources, if any. For example, if you have positive taxable income from other rental properties, that generally counts as passive income. You can use PALs to offset passive income from other sources, which amounts to being able to deduct them currently.

Read more

Tax Deduction for Classic or Antique Cars Used in Business

Question

I enjoy your articles on the dollars-and-cents aspects of buying antique furniture for use in a business.

Could you give an example of buying an antique or a classic car versus a new car as a business-use vehicle? Let’s say a 1972 Pontiac GTO versus a 2019 Lexus GS.

Read more

Tax Tips Image: Neatly stacked pennies in an ascending line. Russo CPA Tax Tips 2023

Fringe Benefit Deductions Change and Affect Business

The Tax Cuts and Jobs Act included a number of tax law changes that affect small businesses, such as deductions for fringe benefits, which can affect both a business’s bottom line and its employees’ deductions. Here’s a summary of what these are:

Read more

How a Business Owner’s Home Office Can Result in Tax Deductions

As a business owner, you may be eligible to claim home office tax deductions that will reduce your taxable income. However, it’s crucial to understand the IRS rules to ensure compliance and avoid potential IRS audit risks. There are two methods for claiming this tax break: the actual expense method and the simplified method. Here are answers to frequently asked questions about the tax break.

Read more

It May Not Be Too Late to Reduce Your 2024 Taxes

If you’re preparing to file your 2024 federal income tax return and your tax bill is higher than you’d expected or your tax refund is smaller than you’d hoped, there might still be an opportunity to change it. If you qualify, you can make a deductible contribution to a traditional IRA until the filing date of April 15, 2025, and benefit from the tax savings on your 2024 return.

Read more