Toby Mathis and Jeff Webb of Anderson Advisors strive to provide educational and accurate answers to your tax questions to prevent or minimize fees from piling up. Do you have a tax question? Submit it to taxtuesday@andersonadvisors.
- If you sell a flip, can you put the gain into your residential mortgage and avoid the taxes? No, you take the gain to make principal payments that have no effect on taxation
- Is interest income from the performing notes considered ordinary income? Yes
- What is an opportunity zone? TCJA gives tax incentives and benefits to invest in economically disadvantaged areas in the country
- Can you deduct meals eaten at home while working from home? Technically, yes, if there’s a business purpose
- Will I be penalized for not making estimated tax payments quarterly? It depends, if you’re required to make estimated payments; penalties will be charged
- Personal property, if I transfer to an LLC, are there tax consequences? No, unless there’s a lot of debt against it
- Are premiums for long-term disability insurance deductible as a business expense in an LLC? Yes, they can be reimbursed, but they are limited to amount and C Corp
- What are the pros and cons of having a holding LLC? Not a huge tax impact on your bottom line, but can make it tough for others to take holding LLC from you
- What’s the best way to pay your child’s tuition, if you’re running a profitable business? Three code sections deal with tuition: 117A, 127, and 132D, but there are other options
- Are self-directed IRA fees tax-deductible? No, may prefer to have 401(k) over IRA
- Can I purchase and sell real estate without selling or dissolving the LLC? Yes
- Does a living trust provide liability protection? No, the purpose is to ease distribution of your estate upon your death; there’s instructions on who to give your belongings to
- How can I protect my house, if somebody slips and trips on my personal residence? There are ways to protect your house; some states have unlimited homestead exclusion
- If I fund my LLC checking account with funds from my self-directed IRA, do I earn income on the business or have to put profits back? There’s no benefit; goes back into IRA
- How can I write-off a car to an LLC or S Corp? Two choices: Actual expense or miles method, or company will own it
- Can I write-off income we pay our nanny from a business account? No, it’s a personal expense; will probably have to pay household employee taxes for nanny
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