What is the 20% QBI Tax Deduction?
In the tax world – and at Robert P. Russo, CPA – everyone is talking about QBI. QBI stands for qualified business income, and it’s the key to unlocking a 20% QBI tax deduction for certain business owners.
Saving for Education: Understanding 529 Plans
Many parents are looking for ways to save for their child’s education, and a 529 Plan is an excellent way to do so. Even better is that thanks to the passage of tax reform legislation in 2017, 529 plans are now available to parents wishing to save for their child’s K-12 education as well as college (two and four-year programs) or vocational school.
How to Maximize the Tax Benefits of Rental Property
Rent to Win: Understanding the Income and Tax Benefits of Rental Property
Have you thought about purchasing a rental property? Great! You have the opportunity to generate additional income, save for retirement, and improve your tax posture. To unlock the full income and tax benefits of rental property, it’s critical that you do the following 5 things first:
Deducting Medical and Dental Expenses
If you, your spouse, or your dependents had significant medical or dental costs in 2022, you may be able to deduct those expenses when you file your tax return this year. Here’s what you should know about medical and dental expenses and other benefits:
Employee Business Expense Deductions: Who Qualifies?
Before tax reform, an employee could deduct unreimbursed job expenses and other miscellaneous expenses that were more than two percent of adjusted gross income (AGI) as long as they itemized instead of taking the standard deduction. Starting in 2018, however, most taxpayers can no longer claim unreimbursed employee expenses as miscellaneous itemized deductions unless they are a qualified employee or eligible educator.
Small Business: Rent Expenses May Be Tax-deductible
If you’re a small business owner just starting out, you may not realize that some rent expenses may be deductible on your tax return. Here are some things small business owners should keep in mind when it comes to deducting rental expenses:
Good News: Most Rentals Qualify as Section 199A Businesses
The Tax Cuts and Jobs Act (TCJA) tax reform added new tax code Section 199A, which created a 20 percent tax deduction possibility for you if your rental property (a) has profits and (b) can qualify as a trade or business.
Tax FOMO: Are You Losing $1,000s in Tax Savings?
The Power of Hiring a CPA (And What Could Happen if You Don’t)
You know about FOMO or “fear of missing out” when it comes to skipping a good party. You should also have a very healthy fear of losing out on tax savings. How? By trusting anyone other than a qualified CPA to handle your taxes!
While we are a NYC-based CPA firm, our clients are national and international.
IRS “Safe Harbor” for Section 199A Rental Properties
Safe harbor! It sounds wonderful.
Obviously, you are going to be comfortable in a safe harbor. And if you said you don’t want comfort, you might be thought of as a little loony.
You may sense that we are not jumping with joy about this new safe harbor for Section 199A rental property. It’s true; our joy quotient is a little low on this safe harbor because of the work involved.
Our feeling is that you did this work, so your property is a trade or business with no safe harbor needed. Of course, the safe harbor gives you comfort, so we need to examine what’s involved.
With the new safe harbor, the IRS thinks it is your new friend when it comes to claiming the Section 199A 20 percent tax deduction on your rental real estate profits.
Standard vs. Itemized Deductions
When completing a tax return, taxpayers have two options: take the standard deduction or itemize their deductions. Most taxpayers use the option that gives them the lowest overall tax. Due to all the tax law changes in recent years, including increases to the standard deduction, that means taking the standard deduction – but not always. Let’s look at a few details about these two options.