538 tagged with "Tax"
Tax strategies, planning, and compliance for individuals and businesses
The Standard Deduction Is Now Permanent: How OBBBA Reshapes the Itemize-vs-Standard Decision for 2026
How the One Big Beautiful Bill Act made the doubled standard deduction permanent, raised the SALT cap to $40,000, added a 0.5% AGI charitable floor, and stacked a $6,000 senior bonus deduction — with concrete math for the 2026 itemize-versus-standard decision.
Section 1235 Capital Gains Treatment for Patent Sales: How Inventors Convert Royalty Income Into Long-Term Capital Gain
Section 1235 lets individual inventors and qualifying early investors treat a patent sale as long-term capital gain — even without a one-year holding period — if they transfer all substantial rights. This guide explains who qualifies as a holder, why the rule survived the TCJA carve-out for self-created intangibles, and how to draft the transfer so the IRS sees a sale rather than a royalty license.
Section 139 Disaster Relief Payments: Tax-Free Employer Aid After Federally Declared Disasters
Section 139 lets employers pay employees tax-free aid after a federally declared disaster — no FICA, no W-2 reporting, no 1099, and fully deductible to the employer. The guide covers qualifying expenses, the disaster definition, the documentation that survives an audit, and a worked $54,000 example.
Section 25C Energy Efficient Home Improvement Credit: A Final-Year Filing Guide Before the OBBBA Sunset
Section 25C's 30% federal credit for heat pumps, insulation, windows, and other home efficiency upgrades ends with the OBBBA sunset on December 31, 2025, making the 2025 return the last chance to claim up to $3,200 per household — provided you supply a valid 4-character QMID on Form 5695.
Section 267 Explained: Related-Party Loss Disallowance and the Matching Rule
Section 267 disallows losses on sales between related parties and defers deductions on accrued payments to related cash-basis payees. A practical guide to who counts as related, how constructive ownership works, the 267(d) gain offset, the 2.5-month payment safe harbor, and the bookkeeping habits that keep family businesses and partnerships audit-ready.
Section 514 UDFI Demystified: How Nonprofits, Foundations, and Self-Directed IRAs Get Taxed on Borrowed-Money Investments
How Section 514 of the Internal Revenue Code taxes leveraged investments held by 501(c)(3) organizations, private foundations, and self-directed IRAs — including the debt/basis percentage calculation, Form 990-T mechanics, the 12-month look-back on sale, and the Section 514(c)(9) real estate exception for schools and pension trusts.
Section 988 Foreign Currency Transactions: A Tax Guide for Importers, Exporters, and Remote Workers
Section 988 of the Internal Revenue Code makes foreign-exchange gains and losses ordinary, not capital. Importers, exporters, and remote workers paid in euros or pounds get full ordinary-loss deductions with no $3,000 cap, a same-day election to convert forward-contract gains to capital, and a $200 per-transaction de minimis exception for personal travel currency.
Repair or Capitalize? A Plain-English Guide to the Section 263(a)-3 Tangible Property Rules for Small Businesses
How the IRS Section 263(a)-3 tangible property regulations decide what small businesses can deduct now versus capitalize over decades — with the three safe harbors ($2,500/$5,000 de minimis, the small taxpayer building rule, and routine maintenance), the BRA test, and the unit-of-property trap that drives most mistakes.
The 2026 W-4 Multiple Jobs Trap: How Two-Earner Households Stop Owing a Surprise Tax Bill Every April
When two spouses each fill out a default W-4, their employers withhold as if each job were the household's only income — causing systematic under-withholding. Step 2 of the 2026 W-4 closes that gap with three options: the checkbox, the Multiple Jobs Worksheet, and the IRS Tax Withholding Estimator.
Barter Transactions: How to Record Trades and Report Them to the IRS
Every barter trade creates taxable income equal to the fair market value of what you receive. Record it as a paired sale and expense through a barter clearing account, then report it on Schedule C—including 15.3% self-employment tax—and watch for Form 1099-B from barter exchanges.
Are Business Credit Card Rewards Taxable? How to Record Cash Back, Points, and Bonuses
For most businesses, credit card cash back and points are non-taxable rebates, not income—but a bonus with no spending requirement is taxable. Spending rewards also reduce your deductible expenses, so record them as a contra-expense to keep deductions accurate.
Collection Due Process Hearings: How a 30-Day Letter Stands Between Your Small Business and an IRS Bank Levy
A timely Form 12153 filed within 30 days of IRS Letter 3172 or LT11/L-1058 triggers a Collection Due Process hearing under IRC Sections 6320 and 6330 — suspending levy action, preserving Tax Court appeal rights, and giving small business owners a statutory chance to negotiate installment agreements, lien withdrawal, innocent spouse relief, or offers in compromise before the IRS drains the operating account.