tax

1 2 3 7

Understanding Sales Tax in the Post-Wayfair World

If your business operates in two or more taxing jurisdictions, the Supreme Court’s decision in South Dakota v. Wayfair applies to you.

In June 2018, the U.S. Supreme Court decided South Dakota v. Wayfair. Since then, businesses that operate in two or more of the nation’s 10,000-plus tax jurisdictions have been struggling to understand what they need to do to comply with the new definition of economic nexus. Wayfair affects all businesses, from strictly online sellers to manufacturers and wholesalers to brick-and-mortar retailers.

The Court’s ruling was vastly different from its 1992 ruling in Quill Corp. v. North Dakota, which found that sales tax did not have to be collected unless the company had a physical presence in the state. Then again, Quill was decided when the Internet was in its infancy.

Understanding Wayfair

Wayfair did not expressly state a threshold for collecting sales tax, but the South Dakota statute in the case stipulates that any out-of-state business that makes $100,000 in sales or that has 200 or more sales in South Dakota must collect sales tax. Although that is a good guideline, businesses need to remember that not all jurisdictions follow it: some are higher and others are lower.

This creates problems for businesses for a number of reasons, including the following:

  • Business registration. Every state has different rules about how businesses must register as taxing entities. In some states, it is enough to register at the state level, whereas in others, the business needs to register at the county and municipality level as well. Some jurisdictions may ask businesses to prove they do or do not meet its thresholds. Noncompliance with these requests can lead to steep penalties. Other jurisdictions have voluntary disclosure programs that can help limit exposure.
  • Goods and service exemptions. There is no one standard for taxing goods and services. For example, clothing is not taxed in New Jersey, but in New York, a neighboring state, the only clothing that costs more than $110 is taxed. There is a never-ending list of discrepancies between jurisdictions, and this list can change quickly.
  • Other factors. Your business may need to rethink its operations. For example, is your inventory stored in another jurisdiction?
  • Effective dates. Just as there is no universal list of which goods and services are taxed, there is no one list of effective dates. A new effective date takes effect every time a jurisdiction decides to tax a good or service, exempt one from taxation or impose a new dollar limit.

Analyzing Exposure

The Wayfair ruling is not going away, so businesses need to take several steps to analyze their exposure. Businesses need to:

  • perform a detailed analysis of the business’s annual sales and number of transactions in every jurisdiction in which it operates;
  • determine which goods and services are taxable in each of those jurisdictions;
  • figure out when and where to register, what penalties it may incur and whether registering will make it subject to other taxes, such as franchise taxes; and
  • determine how it will manage sales tax compliance going forward.

Businesses don’t need to do this on their own. Contact us today for professional help in figuring out your business’s sales tax responsibilities.

Expertly navigate the labyrinth of the tax code 23 tax saving tips for doctors

Quick Tips for Tax Savings: Physician Edition

Doctors offer critical services to the community through prevention and treatment of health issues that can lead to patients needing Home Care Assistance. However, getting the necessary education and experience can be challenging – both physically and financially. In an effort to make life a bit easier for physicians, lawmakers have put together a variety of programs to reduce tax liability for doctors. Maximizing these opportunities in combination with other tax-reduction strategies can dramatically increase the rewards of working as a healthcare provider. The Amazon Best Selling book, The Great Tax Escape, includes in-depth information on taking advantage of these tax savings techniques. Learn how to get a free copy of The Great Tax Escape here.

Small Changes Add Up to Big Savings

It may not be possible to implement all available tax savings strategies at once, but making small changes in managing your practice quickly adds up. Over time, continue to add layers of savings by implementing additional strategies. Before long, you will see your tax bill go down, even when your income is going up. These are just a few of the tips you will learn more about in The Great Tax Escape.

The Case for Specialized Financial Professionals

Free and low-cost budgeting and financial planning tools are great for those with basic financial situations. However, your position as a practicing physician is too complex for these platforms. Enlist a team of professionals with specific experience in tax issues that affect health care providers. Not only will they help you save your money more effectively – they will also assist you in planning major purchases to minimize tax expenses. Long-term, you are likely to realize a significant return on this investment.

Common Deductions You Probably Aren’t Maximizing

Though you are already aware of many deductions available to you, it is likely that you are not yet getting the maximum tax savings you are entitled to. For example, continuing education expenses, depreciation of your medical equipment, and student loan interest are frequently underreported on physicians’ tax returns. Your Certified Tax Coach can guide you through the nuances of these deductions, as well as the specific opportunities available to medical professionals.

The Benefits of Better Record-Keeping

Whether you work for yourself or you are employed by a larger healthcare organization, you are always moving at a rapid pace. For many physicians, that means letting the little things slide. While you always meticulously update your patients’ records, you are probably less careful about recording your expenses. Over the course of a year, these small charges add up, and you could be missing out on significant tax savings for want of a few receipts. Make financial record-keeping a priority, and you will notice a difference in your year-end tax bill.

Be Ready for Retirement

Paying off your student loans often takes precedence over saving for retirement – especially when you are just starting out in your career. However, contributing to your retirement accounts now has across-the-board benefits for your current and future financial state. The funds you deposit are given special tax-advantaged status, and when you contribute regularly over a long period of time, you are better able to ride out the ups and downs of the market.

For more information on tax-saving opportunities specifically impacting physicians, visit our consultation form for your copy of The Great Tax Escape.

…from the Team of Professional at RE-MMAP We are just a click or call away. www.re-mmap.com and phone # (561-623-0241).v

Are There Deductions for Mortgage Loan Points?

Are There Deductions for Mortgage Loan Points

 

You just bought a house and paid one “point” on your home loan and also you just remodeled with the best plumber https://alldrainserviceplumbing.com/24-hour-emergency-plumber/. A point, which is the interest lenders charge up front, is 1% of the mortgage loan amount. If you itemize your income tax deductions, points are deductible. For the best deal, this mortgage branch opportunity has changed everything. You can check out BranchRight.com.

What is a personal loan? A personal loan is money you can borrow from a financial institution like a bank, credit union, or online lender. Once approved for a loan, you’ll make monthly payments to pay it back in full, plus interest. FHA loans are available for single family and multifamily homes with mortgage broker. The loan terms and interest rates vary based on the lender and your credit report, click here to learn more about online payday loansMoreira Team is here to help you make the refinancing process easier. Our qualified mortgage lenders will assist you every step of the process to ensure you make the right choice based on your needs and budget.

 

First Time Around

Points paid for a mortgage on a primary residence are generally deductible in the year they are paid — if certain conditions are met. Check the personal loans from baltimoresun.com to find the best deal for you and your mortgage arrangement. For example, your mortgage must be secured by the home being purchased, the points must not exceed the number generally charged in your area, and the points must be paid from separate funds, not rolled into the mortgage.

 

Second Time Around

If you refinance and use some of the new mortgages with the help or personal Money lenders to make home improvements, as long as payment is separate, points paid on the portion of the loan that finances the improvements can also be deducted in the year they are paid.

 

To learn more about tax rules and regulations, visit 2ndchanceauto.com to get expert advisory in your loan for the new car or  house. Our knowledgeable and trained staff is here to help.

…from the Team of Professional at Top Brokers Hub. We are just a click or call away and our experienced and trained staff will take care of you.

How Refinancing Your Home Affects Your Taxes

As the real estate market improves and mortgage rates remain low, many homeowners are considering refinancing their home mortgages. Following are some of the general tax rules for deducting the charges associated with refinancing. Check out this hybrid ria platform to ensure your financial future and success.

 

Interest

 

Interest on a refinanced loan will be deductible to the extent the loan refinances up to $1 million of home acquisition debt, plus up to $100,000 of home equity debt (limits are $500,000/$50,000 for married taxpayers filing separately). Home acquisition debt is a mortgage loan used to buy, build, or substantially improve a first or second home. Home equity debt is generally any other debt secured by a first or second home.

 

These limits, however, operate separately. For example, if a couple had $300,000 remaining in principal on their original mortgage loans canada, and then refinanced that debt with a new $450,000 mortgage, they would be able to deduct the interest on only $400,000 ($300,000 plus $100,000). Interest on the remaining $50,000 would be nondeductible because that portion is in excess of the combined limits.

 

Points

 

Points paid for the refinancing of a loan that does not exceed the above limits are deductible over the life of the loan. However, any points paid in connection with the portion of a mortgage used to finance home improvements may be deductible in the year of the refinancing.

 

Penalties and Fees

 

Generally, a prepayment fee paid on the old mortgage is considered a payment of interest on that mortgage and, therefore, is deductible in the year it is paid. Most of the times getting an extra loan or re-finance your debts will eventually become worse than the initial point, if you need to pay for debts quickly contact this life settlement broker for instant cash.

 

However, other fees, such as those for credit reports, appraisals, and loan origination, are not deductible.

 

For more help with individual or business taxes, connect with us today. Our team can help you with all your tax issues, large and small.

…from the Team of Professional at RE-MMAP We are just a click or call away. www.re-mmap.com and phone # (561-623-0241).

Is it Time for a Home Equity Loan?

Unlike the interest on consumer loans, home equity loan interest is tax deductible if certain requirements are met. Thinking of capitalizing on the equity in your home? Here are a few factors to weigh. Get a personal loan offer online.

 

TAX CONSIDERATIONS

The interest you pay on a home equity loan of up to $100,000 ($50,000 if you are married filing separately) which is secured by your home generally qualifies as an itemized deduction. But there are other considerations, like what does a home reversion scheme do and what are their benefits?

 

Asking Zmarta Lainaa rahaa, a loan and mortgage professional, it’s clear that, to find out whether a home equity loan is your best financing option, you must compare the effective after-tax interest rate on the home equity loan with the interest rate available on consumer loans. To calculate a home equity loan’s effective after-tax interest rate, subtract your marginal income-tax rate (your tax bracket) from 100% and multiply the result by the home equity loan’s interest rate, but you need to consider your credit.

A bad credit won’t work, but you can still check for the low-interest loans even with bad credit, interested? check it out and get the loan you need for you home.

 

Example. If your marginal income-tax rate is 25% and you can secure an 8% home equity loan rate, the effective after-tax interest rate of the loan will be 6% (100% – 25% = 75%; 8% ´ 75% = 6%). Thus, if the lowest consumer loan interest rate available to you is higher than 6%, the home equity loan may be the better choice.

 

OTHER CONSIDERATIONS

Remember that you will need to pay off the home equity loan when you sell your home or opt out for a reverse mortgage loan solution. So before you go through the trouble and expense of getting a loan, consider how long you plan to live in your current home. And while home equity loans can be a tax-smart financing option, you should also consider the risks associated with pledging your home as collateral if you become unable to make the loan payments. There may also be some costs associated with obtaining a home equity loan.

For more help with individual or business taxes, connect with us today. Our team can help you with all your tax issues, large and small.

…from the Team of Professional at RE-MMAP We are just a click or call away. www.re-mmap.com and phone # (561-623-0241).

Taxes and Selling Inherited Property – What You Need to Know

Sooner or later, you may decide to sell property you inherited from a parent or other loved one. Whether the property is an investment, an antique, land, or something else, the sale may result in a taxable gain or loss. But how that gain or loss is calculated may surprise you.

Your Basis

When you sell property you purchased, you generally figure gain or loss by comparing the amount you receive in the sale transaction with your cost basis (as adjusted for certain items, such as depreciation). Inherited property is treated differently. Instead of cost, your basis in inherited property is generally its fair market value on the date of death. Get advise with  (or an alternate valuation date elected by the estate’s executor, generally six months after the date of death).

These basis rules can greatly simplify matters, since old cost information can be difficult, if not impossible, to track down. Perhaps even more important, the ability to substitute a “stepped up” basis for the property’s cost can save you federal income taxes. Why? Because any increase in the property’s value that occurred before the date of death won’t be subject to capital gains tax. Follow the property management tips for winter, winter property management tips, they may prove very helpful.

For example: Assume your Uncle Harold left you stock he bought in 1986 for $5,000. At the time of his death, the shares were worth $45,000, and you recently sold them for $48,000. Your basis for purposes of calculating your capital gain is stepped up to $45,000. Because of the step-up, your capital gain on the sale is just $3,000 ($48,000 sale proceeds less $45,000 basis). The $40,000 increase in the value of the shares during your Uncle Harold’s lifetime is not subject to capital gains tax.

What happens if a property’s value on the date of death is less than its original purchase price? Instead of a step-up in basis, the basis must be lowered to the date-of-death value.

Holding Period

Capital gains resulting from the disposition of inherited property automatically qualify for long-term capital gain treatment, regardless of how long you or the decedent owned the property. This presents a potential income tax advantage, since long-term capital gain is taxed at a lower rate than short-term capital gain.

Be cautious if you inherited property from someone who died in 2010 since, depending on the situation, different tax basis rules might apply.

 

…from the Team of Professional at RE-MMAP We are just a click or call away. www.re-mmap.com and phone # (561-623-0241).

Understanding Tax Breaks for Moving

Everybody likes tax breaks. For many taxpayers, the tax break they get on the gain from selling a home is one of the most valuable of all. If you’re thinking the time is right to put your house on the market and it has appreciated in value, make sure your gain will qualify for the home-sale gain exclusion and Get More Info before you make your move.

 

Good Deal

 

Here’s how the home-sale gain exclusion works: If you make a profit when you sell your principal residence, all or part of your gain may be tax-free. Eligible individual filers may exclude up to $250,000 of gain from their income; married couples filing jointly may exclude up to $500,000 of gain.

 

Ownership and Use Tests

 

In general, this tax break is available only once every two years. To qualify, you generally must have owned and used the home as your principal residence for at least two years (a total of 24 full months or 730 days) during the five-year period ending on the date of the sale. The ownership and use periods don’t necessarily have to coincide.

 

Only one spouse must pass the ownership test, although neither spouse may have excluded gain from a previous home sale during the two-year period ending on the sale date. As for the use test, both spouses must pass it. Note that short, temporary absences count as periods of use. So, for example, a three-week vacation tour of Europe would count as time spent in your principal residence.

 

Reduced Exclusion Possible

 

If you don’t meet the requirements for the full $250,000/$500,000 exclusion, you might qualify for a reduced exclusion under certain circumstances: if you have to sell your home because of a change in employment, you move for health reasons, or there are other qualifying”unforeseen circumstances.” The amount of the reduced exclusion is based on the portion of the two-year use and ownership periods you satisfy.

 

Call us today for more tips on how to ensure you’re following business best practices, and let us help you keep your company in the black.

 

…from the Team of Professional at RE-MMAP We are just a click or call away. www.re-mmap.com and phone # (561-623-0241).

Understanding the Tax Ramifications of Investing in Rental Real Estate

Investing in residential rental properties raises various tax issues that can be somewhat confusing, especially if you are not a real estate professional. Some of the more important issues rental property investors will want to be aware of are discussed below.

Rental Losses

Currently, the owner of a residential rental property may depreciate the building over a 27½-year period. For example, a property acquired for $200,000 could generate a depreciation deduction of as much as $7,273 per year. Additional depreciation deductions may be available for furnishings provided with the rental property. When large depreciation deductions are added to other rental expenses, it’s not uncommon for a rental activity to generate a tax loss. The question then becomes whether that loss is deductible.

$25,000 Loss Limitation

The tax law generally treats real estate rental losses as “passive” and therefore available only for offsetting any passive income an individual taxpayer may have. However, a limited exception is available where an individual holds at least a 10% ownership interest in the property and “actively participates” in the rental activity. In this situation, up to $25,000 of passive rental losses may be used to offset nonpassive income, such as wages from a job. (The $25,000 loss allowance phases out with modified adjusted gross income between $100,000 and $150,000.) Passive activity losses that are not currently deductible are carried forward to future tax years.

What constitutes active participation? The IRS describes it as “participating in making management decisions or arranging for others to provide services (such as repairs) in a significant and bona fidesense.” Examples of such management decisions provided by the IRS include approving tenants and deciding on rental terms.

Selling the Property

The gain realized on the sale of residential rental property held for investment is generally taxed as a capital gain. If the gain is long term, it is taxed at a favorable capital gains rate. However, the IRS requires that any allowable depreciation be “recaptured” and taxed at a 25% maximum rate rather than the 15% (or 20%) long-term capital gains rate that generally applies. Find out how to find property managers in Aventura and to protect your investment and valued property.

Exclusion of Gain

The tax law has a generous exclusion for gain from the sale of a principal residence. Generally, taxpayers may exclude up to $250,000 ($500,000 for certain joint filers) of their gain, provided they have owned and used the property as a principal residence for two out of the five years preceding the sale.

After the exclusion was enacted, some landlords moved into their properties and established the properties as their principal residences to make use of the home sale exclusion. However, Congress subsequently changed the rules for sales completed after 2008. Under the current rules, the gain will be taxable to the extent the property was not used as the taxpayer’s principal residence after 2008.

This rule can be a trap for the unwary. For example, a couple might buy a vacation home and rent the property out to help finance the purchase. Later, upon retirement, the couple may turn the vacation home into their principal residence. If the home is subsequently sold, all or part of any gain on the sale could be taxable under the above-described rule.

…from the Team of Professional at RE-MMAP We are just a click or call away. www.re-mmap.com and phone # (561-623-0241).

Want to Defer Capital Gains – Use a Property Swap

If you are fortunate enough to own real estate that has appreciated substantially, you may be hesitant to sell the property and reinvest in another property because of the taxes you’d have to pay on your profit. Instead of selling, you might want to consider a “like-kind exchange.”

A like-kind exchange is a property swap. When all tax law requirements are met, a like-kind exchange allows you to defer your gain for tax purposes.

An Example

Pete exchanges a tract of land worth $500,000 for a building, also appraised at $500,000. He originally paid $300,000 for the land and he made no improvements to it. Because the deal is structured as a like-kind exchange, Pete’s $200,000 gain on the land ($500,000 value minus $300,000 cost) is tax-deferred.

Tax-deferred doesn’t mean tax-free. For tax purposes, Pete’s cost basis in the building he acquired in the exchange is $300,000, the same as his cost basis in the land he gave up. So, if Pete were to turn around and sell the building for $500,000, he’d have to report a taxable gain of $200,000 at that time.

Which Assets Qualify?

The like-kind exchange strategy is available for investment property and property used in a trade or business. Real estate has to be exchanged for real estate, and personal property for personal property. Inventory and shares of stock aren’t eligible for like-kind exchange treatment, and various other restrictions apply.

Making a Deal

A like-kind exchange can be accomplished when properties are not of equal value. Typically, the owner of the less valuable property turns over enough cash (or other assets) to even out the exchange. Or one owner might agree to assume the other’s debt. Note that transactions involving cash, additional assets, and debt relief are not completely tax deferred.

Other variations on the basic like-kind exchange are possible. For example, it’s possible to structure an exchange that isn’t simultaneous. Or more than two property owners can be involved in the deal.

In the right situation, a like-kind exchange can be a significant tax-saving opportunity. We’d be happy to discuss it with you, so give us a call today to discuss your personal situation.

…from the Team of Professional at RE-MMAP We are just a click or call away. www.re-mmap.com and phone # (561-623-0241).

What You Need to Know Before You Rent Your Vacation Home

Renting out a second home can help defray the cost of owning and maintaining the property. And there may be valuable tax benefits from the rental arrangement as well. Here are some things to think about if you are going to rent out a vacation property.

 

Two Week Rule

 

Your rental income won’t be taxable as long as you limit the number of rental days to 14 or fewer each year. In this situation, you won’t be able to deduct your rental expenses (other than property taxes and qualifying mortgage interest).

 

More Than 14 Rental Days

 

Once you exceed 14 rental days, all rental income becomes taxable to you. But you may deduct various rental expenses. There are different limits on rental deductions depending on your personal use of the home.

 

  • All expenses associated with renting out the property, such as utilities and maintenance, are potentially deductible if you limit personal use of the home to no more than the greater of (1) 10% of the total number of days the home is rented or (2) 14 days. However, if there’s a rental loss, the tax law’s passive activity rules may limit your loss deduction.

 

  • Where personal use exceeds the 10% or 14-day threshold, your tax deductions for rental expenses generally will be limited to the amount of rental income you collect. No loss is allowed.

 

To learn more about vacation homes and taxes, give us a call today. Our knowledgeable and trained staff is here to help.

 

…from the Team of Professional at RE-MMAP We are just a click or call away. www.re-mmap.com and phone # (561-623-0241).

1 2 3 7