02-18-21 IRS behind in Processing 11 million 2019 returns!

A group of Republicans on the House Ways and Means Oversight Subcommittee sent a letter Wednesday 02.18.21 to IRS Commissioner Charles Rettig complaining about the backlog of approximately 11 million unprocessed tax returns from the 2019 tax year. The backlog of unprocessed mail from the pandemic has created a ripple effect that’s continuing into this year’s tax-filing […]

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IRS Commissioner-BACKLOG of UNOPENED

November 20, 2020 Currently, the IRS has approximately three million pieces of mail and one million returns that remain unprocessed, IRS Commissioner Charles “Chuck” Rettig said. The IRS mail backlog is down from where it sat at over five million last month. Testifying before the House Ways and Means Oversight Subcommittee on November 20, Rettig […]

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SUB S OWNERSHIP CHANGE

If a shareholder terminates his or her interest in an S corporation during the tax year, the S corporation, with the consent of all affected shareholders (including those whose interest is terminated), may elect to allocate income and expenses, etc., as if the corporation’s tax year consisted of 2 separate tax years, the first of which ends […]

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2018 20% Pass-through Deduction

MUCH CONFUSION NOW! In general the new tax law allows self-employed and owners of pass-through entities (partnerships and S Corps) to deduct 20% of “qualified business income“. The law is COMPLEX with limitations, exceptions and undefined terms. Needs to define “qualified business income” more clearly.  Specified service entities are subject to high income limitations.  There […]

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2015 Depreciation FINALLY DECIDED!

Protecting Americans from Tax Hikes Act of 2015 Bonus first-year Depreciation — Qualified property placed in service between 1/01/15 and 12/31/19 is allowed first-year bonus depreciation. The bonus depreciation percentage is 50% for property placed in service between 2015 and 2017, 40% for property placed in service during 2018 and 30% for property placed in service […]

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Rental property placed in Service

We are buying a new build vacation rental home.  We’ve paid the deposit and the home will be ready in early March. I assume the mortgage interest is deductible (and not the full mortgage payment) in which case I would expect the yield to be circa $1k pm after all deductions.  YOU ARE CORRECT, only the […]

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Distributions from Sub S – Income?

This example shows why distributions are not income. DISTRIBUTIONS ARE NOT INCOME YOU ARE TAXED ON THE PROFITS OF THE COMPANY WHETHER YOU TAKE A DISTRIBUION OR NOT. Example 1: Let’s say you alone start a new company and you put in $10k. The first year the company makes a profit of $100k.  That makes […]

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