Sarah_cpa

Interest on construction loans for rental properties is deductible if the property is intended for income generation. You can claim the interest as a rental expense during the construction period, but only if the property is ultimately used for rental purposes. Be sure to maintain detailed records, including loan agreements, and proof of intent to use the property for rental purposes. It's important to ensure that the interest is tied to the rental aspect and not for personal use of the property or loan proceeds. Documentation such as invoices and records of payments should be organized and k

Traditional IRA contributions are tax-deductible if you meet income and eligibility requirements set by the IRS. The amount you can deduct depends on your filing status, income, and whether you or your spouse participate in a workplace retirement plan. For example, if you’re a single filer with income below the phase-out threshold, you can deduct the full contribution amount. Contributions to Roth IRAs, however, are not deductible. It's important to maintain records of your contributions to ensure they are properly reflected on your tax filings. Keep all documentation in case you need to refe

State government charges, such as fees paid to the Secretary of State for business registration or annual reports, are deductible as business expenses. These charges are considered necessary and ordinary expenses for maintaining or establishing a business. Ensure that the fees are directly related to your business operations, whether for setting up a new business or maintaining an existing one. Keep receipts or payment confirmations as part of your tax records for compliance with IRS regulations. If your business involves maintaining a legal status or filing annual reports, these fees are a s

Rent for a home office is deductible based on the percentage of your home used exclusively for business. To calculate this, measure the square footage of your office space and divide it by the total square footage of your home to determine the percentage. For example, if your office takes up 10% of your home, you can deduct 10% of the total rent payments. The space must be used exclusively and regularly for business activities, and not for personal use. It's essential to maintain proper documentation, including a floor plan, lease agreements, and measurements to substantiate the deduction. Th

Tax planning services are deductible if they are directly related to your business. For example, fees paid to a CPA for creating a tax strategy, estimating quarterly taxes, or advising on business-related financial matters qualify as deductible business expenses. These services must pertain to business activities and should not involve personal tax matters. Keep clear records of invoices, descriptions of the services rendered, and any correspondence regarding the planning services. Personal tax planning fees are generally not deductible under current tax laws, so ensure you differentiate betw

The amount of rent deductible for a home office is based on the percentage of your home’s square footage dedicated to business use. For example, if your home office occupies 15% of your home, you can deduct 15% of your total rent payments. The space must be used exclusively and regularly for business activities, according to IRS rules. Accurate documentation, such as lease agreements and measurements of the office space, is necessary to substantiate this deduction. This ensures compliance with IRS requirements and helps to maximize your deduction. Additionally, keeping records will protect yo

Cash withdrawals for rent payments can be deducted if the rent is for a home office or business space. Ensure you have proper documentation to substantiate the deduction, including a signed lease agreement and receipts or acknowledgments from the landlord. Cash payments should be well-documented, as they can be harder to trace compared to other payment methods like checks or electronic transfers. Without clear proof of payment, the IRS may disallow the deduction, so it’s critical to maintain thorough records. For better compliance, it's advisable to use traceable payment methods for business-

Home-based trading activities can be deductible if they qualify as a business under IRS guidelines. To claim these deductions, you must demonstrate that your trading activities are substantial, frequent, and intended to generate a profit. Deductible expenses could include costs related to a home office, trading software, internet services, and other expenses directly tied to trading. Keep detailed records of these expenses to substantiate your claims. The IRS closely scrutinizes home-based trading deductions, so it is crucial to maintain comprehensive documentation, including transaction logs