- Guide to Capital Gains Taxes on Commercial Properties
Capital gains tax on commercial property depends on several factors. Factors include how long the property was held and the taxpayer’s income level. When a commercial property is sold for more than its original cost basis, the profit, or capital gain, is subject to taxation. Knowing how these gains are calculated can help you identify… read more…
- Kamala Harris Supports Tax on Unrealized Capital Gains: What It Means for Wealthy Households
The Kamala Harris campaign has made one of its first concrete policy proposals this week with a tax plan. The centerpiece of the plan is a series of high-end tax increases on corporations and wealthy households worth approximately $5 trillion over 10 years. Specifically, Harris has proposed enacting the tax increases detailed in President Biden’s… read more…
- States With Tax Breaks for Renters: Do You Qualify?
It is rare to get meaningful tax relief as a renter. Homeowners can get significant tax advantages, most notably in the form of the mortgage interest deduction and the capital gains exemption, both of which are available to all households regardless of circumstance. This is less common for renters. There are no federal tax breaks for… read more…
- What to Know About Form 8889 for HSAs
If you’ve made contributions to or taken distributions from a health savings account (HSA), the IRS requires you to report it on your yearly taxes. That’s where Form 8889 comes in. It details contributions, distributions and potential tax deductions so you can report all HSA-related activities to remain compliant as well as optimize your tax… read more…
- What Is the 2025 Federal Solar Tax Credit?
The Federal Solar Tax Credit, also known as the Investment Tax Credit (ITC), provides an up to 30% tax credit for the costs of adopting solar energy in the United States. The credit applies to new solar photovoltaic (PV) systems and expansions of existing ones, reducing the overall installation cost by nearly a third. This… read more…
- How an Employee Stock Purchase Plan (ESPP) Is Taxed
One common question from employees with employee stock purchase plans is if there’s an employee stock purchase plan tax. While you’ll typically owe taxes based on the profits when you sell those shares later on, when and how much you’ll owe will be based on the specific nature of your plan. Under a qualified employee… read more…
- Are Employee Stock Purchase Plans (ESPP) Pre-Tax?
Employee stock purchase plans (ESPPs) are benefits offered by companies to help employees invest in company stock at a discount. These plans are designed to encourage ownership and align employee interests with those of the company. Understanding the tax treatment of ESPP contributions can help employees make the most of this benefit. Specifically, many may… read more…
- 4 Tax Benefits of Using an LLC for Your Rental Property
Forming a limited liability company (LLC) can be a smart move for real estate investors seeking both tax benefits and legal protection. LLCs offer pass-through taxation, allowing profits to flow directly to your personal tax return and potentially reducing your overall tax burden. Investors may also qualify for a special tax deduction available to LLCs.… read more…
- What Are the Tax Consequences of Inheriting a CD?
If you inherit or leave a certificate of deposit (CD), some taxes may apply. The CD’s principal passes without income tax, but any interest earned after death is taxed as ordinary income to the heir. Federal estate tax only applies if the estate exceeds the exemption, and there is no federal inheritance tax, though some… read more…
- How Capital Gains Tax on Home Sales Works
Selling a home can be a significant financial milestone, but it also comes with important tax implications that homeowners need to understand. One of the key considerations is the capital gains tax on home sales, which can affect the profit you make from selling your property. Essentially, capital gains tax is levied on the profit… read more…
- Can Short-Term Capital Losses Offset Long-Term Capital Gains?
Understanding this aspect of tax strategy is crucial for investors looking to optimize their financial outcomes. In essence, the IRS allows taxpayers to use capital losses to offset capital gains, which can potentially reduce the amount of tax owed. Short-term capital losses, which occur when an asset is sold at a loss within a year… read more…
- Are Health Insurance Premiums Tax Deductible When You Retire?
As you transition into retirement, understanding the financial implications of your health insurance premiums becomes increasingly important. One common question that arises is whether these premiums are tax deductible. The answer can significantly impact your financial planning and tax strategy during your golden years. Generally, health insurance premiums can be deductible if you itemize your… read more…
- I’m Going to Get $3,300 per Month From Social Security. How Can I Reduce My Taxes?
Approximately 40% of households pay taxes on their Social Security benefits, according to the Social Security Administration. If you do owe taxes on your benefits, managing them effectively could save you a lot of money. If you need help planning for Social Security or taxes in retirement, consider working with a financial advisor. However, there… read more…
- What Are the Tax Implications for Withdrawing From Your IRA?
Managing your retirement savings effectively requires understanding the tax implications of withdrawing money from an individual retirement account (IRA). IRAs, whether traditional or Roth, offer unique tax advantages that can significantly impact long-term savings. However, understanding how withdrawals are taxed, the conditions under which penalties apply and the strategic maneuvers available to minimize financial strain… read more…
- How to Report Foreign Gifts With Form 3520
The IRS has clear guidelines and specific thresholds that dictate when and how U.S. persons (citizens, resident aliens or domestic trusts) must report gifts from foreign entities. With penalties for non-compliance potentially reaching staggering amounts, understanding these rules is not just a matter of financial literacy but of fiscal responsibility. If you receive a gift… read more…
- I’m Selling My House and Netting $480k. Can I Avoid Taxes While Downsizing for Retirement?
In most cases, when selling your primary residence you can exclude $500,000 of the gain if you file as a married couple. If that’s your situation, and you meet conditions to have the gain qualify as a long-term capital gain, you likely won’t owe any tax. If you file singly while still meeting long-term capital… read more…
- How to Avoid Overpaying Your Taxes
Getting a tax refund can seem like a financial windfall, but it means you’ve overpaid your taxes and given the government an interest-free loan. While some taxpayers prefer to receive a lump sum refund, others view tax overpayments as a missed opportunity to have their money work for them. That’s because the extra money paid… read more…
- What Are the Imputed Interest Tax Rules?
Imputed interest rules can turn what seems like a simple act of generosity into a taxable event. These IRS regulations require interest to be calculated and reported on certain transactions, even when no interest is formally charged. The goal is to ensure fair taxation on arrangements involving deferred payments or below-market interest rates. Because tax… read more…
- 1031 Exchange Rules in California
Selling an underperforming asset and buying a similarly priced, more promising investment is a logical business move – but what about the taxes on the sale? If you’re an investor in California, concerns might arise over the taxes you’ll owe for selling an investment property. Fortunately, the 1031 exchange rules from the federal government allow… read more…
- What Is a Gift Loan and How Does It Work?
A gift loan is essentially a loan with an interest rate well below the market average, or even no interest at all, which can be a strategic way to support family members financially or for estate planning purposes. As beneficial as these loans may appear, with their potential tax benefits and flexible repayment options, they… read more…
- How to Set Up a Payment Plan for Taxes You Owe
When an individual or business owes taxes to the Internal Revenue Service (IRS), settling the entire amount in a single payment may not be financially feasible. In such cases, a tax payment plan can offer a viable solution. This arrangement with the IRS allows taxpayers to pay their due taxes over an agreed period, easing… read more…
- How to Report a Backdoor Roth IRA With Form 8606
A backdoor Roth IRA typically offers high-income earners a workaround to contribute directly to a Roth IRA when their earnings are above IRS income limits. This strategy could allow you to take advantage of tax-free growth and withdrawals in retirement. Reporting a backdoor Roth IRA contribution on your taxes is relatively straightforward. But doing it… read more…
- What Is Net Investment Income and How Is It Taxed?
Net investment income (NII) is defined as the profit gained from investments after deducting certain related expenses. This includes various forms of income such as interest, dividends, rental income and capital gains. It’s essential to know not just what comprises NII, but also how it’s calculated and the tax implications it carries, especially for those… read more…
- Understanding Form 8606 for IRA Taxes
If you use an IRA to save for retirement, IRS Form 8606 might be an important part of tax season. Specifically, this is the form on which you report nondeductible contributions to an IRA. It is also used to track distributions for households that have made nondeductible contributions, early distributions from Roth IRAs, and conversions… read more…
- 9 Common Tax Mistakes and How to Avoid Them
The more money you make, the higher your tax liability could be. And making a mistake in your filing can end up costing you more in fees and penalties. Here’s a roundup of common tax mistakes that could cost you money this tax season. A financial advisor who specializes in tax planning could also help… read more…