Do you have houses or apartments you rent out?. Remember, under the passive loss rules, you can deduct a maximum of $25,000 of rental losses against your other income. This amount starts to phase out between $100,000 and $150,000 of adjusted gross income. You can, however, deduct rental losses against other passive income (except publically traded partnership passive losses-it is partnership by partnership).
Brian’s Tax Musings
Well, after another day of doing my civic duty on the jury, my wife and I decided (actually I decided, she decided to go along with me after finding there was nothing else on) to watch “The Blob” that we had recorded last October on our DVR. You know, the 1958 thriller (?) starring Steve McQueen, a bunch of other people and a bowl of jello. He freezes the blob at the end with 30 fire extinguishers, stopped it but didn’t kill it, and the air force drops the blobsicle on the north pole. Well, watching this classic, I was thinking, hmmm, similar to the IRS and the government; starts out small, eats everything (and everyone) for lunch, keeps growing, impossible to destroy and terrifies everyone it comes in contact with it. A good tax preparer can be the fire extinguisher and stops it from eating all your tax dollars and then, even though we can’t kill it, we can contain it and drop it on the north pole (okay, no analogy is perfect-sorry.)Maybe I should change my tagline from “You can count on us to count for you” to ‘We are your fire extinguisher for your IRS Blobs” (no, not enough [...]
Brian’s Tax Musings
If you are a sole proprietor and you hire your kids under 18, you save social security, medicare, SDI and unemployment taxes. If you become a single member LLC, you are treated as a separate entity, not a parent, and lose this savings. As a separate entity, your business has no children, so you have to take out all payroll taxes. This can cost you a lot of money in taxes (Around 18% of wages).