How to Get the IRS to Pre-Approve Your Taxes

It might seem odd, but it is possible to get the IRS to give you a straight-forward and binding answer to ambiguous tax positions in advance. How does this happen, you ask? The answer is through an IRS private letter ruling. IRS private letter rulings provide many benefits, but they are not easy to obtain. … Continue reading “How to Get the IRS to Pre-Approve Your Taxes”

The Five Key IRS Rules of Taxation for Lawsuit Settlements

Coming out on the winning side of a lawsuit as a plaintiff can be a gratifying feeling, especially if there is a financial settlement involved. There is likely a sense of both relief and vindication. Unfortunately, far too often people are in for a shock when they realize that they must pay taxes on the … Continue reading “The Five Key IRS Rules of Taxation for Lawsuit Settlements”

3 Big Tax Issues to Look Out for in Your Estate Plan

There are three big tax issues that can derail an otherwise well-executed estate plan. These include Family Limited Partnerships, Revocable Trust Swap Powers and Trust Situs. Below we explore the pitfalls with each issue. Fixing FLPs Family Limited Partnerships (FLP) are often created to hold investments or business assets in order to leverage a valuation … Continue reading “3 Big Tax Issues to Look Out for in Your Estate Plan”

Why Some People Are Afraid of the Hobby Loss Rules

Many tax advisors are very cautious when it comes to claiming hobby losses – and some would argue overly so. This conservative view stems from the impression that the taxpayer usually loses when challenged by the IRS. While technically true that the odds aren’t in your favor of winning a challenge, the overall risk often … Continue reading “Why Some People Are Afraid of the Hobby Loss Rules”

When Saving for Retirement in Taxable Account Is a Good Idea

Most people associate saving for retirement with tax deferred or non-taxable accounts: 401(k)s, 403(b)s, Traditional IRAs, Roth IRAs, etc. The tax benefits of these types of retirement accounts give individuals advantages over simply investing in a regular taxable brokerage account.   Savings for retirement in a standard taxable account can also have its place – … Continue reading “When Saving for Retirement in Taxable Account Is a Good Idea”

HSA Accounts and Their Incredible Long-term Benefits

Pretty much everyone has heard about 401(k) plans, but beyond these – Health Savings Accounts (HSAs) also can be great retirement vehicles. HSAs are tax-advantaged savings accounts for those with high-deductible health plans (HDHPs). The idea is that since those with HDHPs generally have lower premiums but higher out-of-pocket expenses, they need a way to … Continue reading “HSA Accounts and Their Incredible Long-term Benefits”

Trump Tax Law Makes Now the Perfect Time for the Roth Conversion Retirement Trick

Converting a traditional IRA to a Roth IRA takes some fortitude and faith in the future numbers because this change can accelerate your tax bill. The current market and tax rate cuts from President Trump’s plan, however, are creating an environment ripe for conversions and making the move much more palatable. Together, these two factors … Continue reading “Trump Tax Law Makes Now the Perfect Time for the Roth Conversion Retirement Trick”

When Is A Loan Not A Loan?

With the sweeping new tax legislation in 2018 capturing everyone’s attention, other changes have taken a back seat. There were several Tax Court cases in 2018 that rendered important decisions impacting how things work – one of which was Povolny Group, Inc. v. Commissioner, T.C. Memo 2018-37. The Povolny Group decision centers on a common issue … Continue reading “When Is A Loan Not A Loan?”

 

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