Tax & Accounting Insights for Irvine, CA. Expert Guidance from Bharmal CPAs
Who Qualifies for Tax Credits?
We love tax credits because they help to reduce the taxes our client has to pay Uncle Sam. The two main types of credits that can reduce your tax bill is the refundable tax credit and the non-refundable tax credit. Before delving into this topic, let's describe these two credits. A refundable tax credit is a credit that can reduce [...]
Advice for First Time Home Buyers
Buying your first home is a major step. Make sure you’re ready by checking out NerdWallet’s list of things to think about: Know how much you can afford. Look at your finances so you can decide how big a down payment you can make and how much you can afford in mortgage costs. Check your credit. Make sure you have [...]
Ways to Make More of Your Property Tax Deduction
Tax reform put the screws to your state and local income tax deductions. Many states disliked that and have been putting together workarounds. But now the IRS is creating regulations to put an end on your state’s creative plans. In the absence of federal lawmakers changing their minds, your federal deductions for state income taxes face that $10,000 ceiling. But [...]
Hiring Your Children To Run Rental Properties
Have you considered hiring your children to work on your rental properties? If so, were you concerned when you did not see a line item for wages on Schedule E of your Form 1040? Don’t let that bother you. The IRS in its instructions explains that wages and other ordinary and necessary business expenses of the rental that are not [...]
Benefits of Partnering With Your Spouse Under New Tax Reform
Tax reform changed the rules of the game when choosing your best tax structure. In looking over the possibilities, we note that a properly structured spousal partnership could be your best choice. Here are the tax benefits to you: • Your spouse’s income is free from self-employment tax. • You and your spouse both still qualify for the new pass-through [...]
Business Income Deduction under Section 199A
As you likely know by now, the Tax Cuts and Jobs Act created a 20 percent tax deduction under new tax code Section 199A. The question for you: Will you reap any benefits from this new deduction? And the second question: If your qualifying for the 20 percent tax deduction looks bleak, what can you do now to create some [...]