There has been a great deal of activity in tax development across America as a response to the Coronavirus. Tax policy has dominated the headlines for the last year, notwithstanding the prior years across America.
In order to stay updated, we have partnered with Mark Kohler, tax expert to bring them to tax professionals online. Mark J. Kohler is a CPA, Attorney, co-host of the Radio Show “Refresh Your Wealth” and author of the new book “The Business Owner’s Guide to Financial Freedom- What Wall Street isn’t Telling You” and, “The Tax and Legal Playbook- Game Changing Solutions For Your Small Business Questions”. He is also a partner at the law firm Kyler Kohler Ostermiller & Sorensen, LLP and the accounting firm K&E CPAs, LLP.
Course Number 1 - 2020 Real Estate Losses and 1031 Exchanges
Mid April 2020, the IRS issued Notice 2020-23 (that updates Notice 2020-18, “Additional Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic”) to further extend filing deadlines. If the requested actions are handled within the timeline, sellers who initiated 1031 Exchanges prior to April 1, 2020 will have time to identify their replacement properties and complete their exchange.
The 1031 Exchange has two very important actions a seller must take, with each of these actions noted as a “Specified Time Sensitive Action.” These include:
1.) Within 45 days of the sale of the property the Seller must identify a replacement property.
2.) Within 180 days of the sale the Seller must purchase the replacement property.
It is important to note that the IRS has extended the Specified Time Sensitive Action deadlines in areas affected by natural disasters and it is likely that additional guidance will be issued regarding 1031 Exchange deadlines in the near future.
Course Number 2 - 2020 Health Care Update, HSA’s, Expense Strategies and More
With a health savings account, the money you contribute doesn't have to be used up year after year. The point of an HSA is to put in more money than you think you'll need in a given year so that you can invest the excess and grow it into a larger sum. And if you carry that sum with you into retirement, you'll have a means of paying your healthcare expenses during your senior years.
But as is the case with other tax-advantaged savings plans, the rules surrounding HSAs can shift from year to year, especially this year. One of the shifts in rules that Mark Kohler will discuss in the course relate to FSA’s limitations.
Health Flexible Spending Arrangements (FSAs) Limitation
Salary reduction contributions to your health FSA for 2019 are limited to $2,700 a year. This inflation adjusted amount is listed in Revenue Procedure 2018-57, section 3.17. To be considered an HSA-qualified HDHP, a health plan must meet several tests: it must have a deductible above a certain minimum level, it must also limit total annual out-of-pocket expenditures for covered benefits to no more than a certain maximum level, and it can provide only preventive care services and (for plan years beginning on or before December 31, 2021) tele health services before the deductible is met.
In 2020, HSA-qualified HDHPs must have a minimum deductible of $1,400 for self - only coverage and $2,800 for family coverage and an annual limit on out-of-pocket expenditures for covered benefits that does not exceed $6,900 and $13,800, respectively. In 2021, HSA-qualified HDHPs must have a minimum deductible of $1,400 for self-only coverage and $2,800 for family coverage and an annual limit on out-of-pocket expenditures for covered benefits that does not exceed $7,000 and $14,000, respectively. These amounts are adjusted for inflation (rounded to the nearest $50) annually.
Mark Kohler will break down step by step what this means for your clients so you can offer the best advice possible.
Course Number 3 - 2020 Advanced Retirement Account Strategies
While working, the primary goal with any investment is usually to accumulate retirement savings. As your clients start to transition into retirement, they may need to start spending their investments. This can be an emotionally difficult transition especially now with the Coronavirus and all the uncertainty it has brought for this segment of the population.
Social Security is the foundation of retirement income for most Americans. For about half of American seniors, Social Security provides at least 50% of their income. It even provides 90% of income for a quarter of seniors. That being said, for most Americans, Social Security won’t provide enough retirement income.
We will also go through tax proven recommendations that are available so as to derive maximum value for your clients, in this course with Mark Kohler.
Asset Protection for Rentals
There are many ways to protect an asset. Insurance, limited liability, titling and protection through debt are just a few ways of ensuring that your property is covered. With limited liability, LLC for rental property can protect your personal assets from potential lawsuits. With limited liability, debtors can’t come for your home to compensate for the issues arising in your business. The corporation pays for its expenses. You can also buy a house with an LLC and rent it to yourself to minimize financial risks. This strategy will limit the chances of personal real estate asset seizure.
The titling of your home can also be a great protection strategy. Debt however is one of the most affordable ways to protect your real estate property. With debt, the available equity is insignificant. The low income might discourage creditors from coming after your property.
The real estate industry faces numerous threats as interest percentages rise across the States. This course will offer strategies in the form of IRS based recommendations on how you can protect your asset and your personal residence.
Course Number 4 - 2020 Business Tax Strategies Part 2
The hardest hit businesses in America by Covid 19 were the small business sector. Your local florist, dentist, and pet shop have all been struggling despite the generous tax policies that have been drawn up to keep these businesses afloat. Under the Government’s COVID-19 stimulus package, the instant asset write-off threshold was increased from $30,000 per asset to $150,000 per asset, and extended to businesses with an aggregated annual turnover of less than $500 million.
This measure applies to all purchases made from 12 March 2020 to 30 June 2020 where the asset is used or installed ready for use by 30 June 2020. Small businesses with an aggregated turnover of less than $10 million can also claim deductions for pre-paid expenses which includes lease payments, insurance and rent. These are expenses that crippled many of these businesses and almost brought them to their feet. Stay in the know on the latest that is available for your SME clients as this course will be especially relevant for tax professionals with small companies doing business across America.
Partnerships Do’s and Donts
Having a partner who complements your business skills can skyrocket your earning potential or curtail your business growth. According to Mark Kohler, if you are considering entering into a partnership, or are already in one, there are critical issues to address if you want to succeed. Drafting a written partnership agreement, an exit strategy, and sign off from your lawyer can save you an expensive mistake down the road.
There are many legalities to consider, such as the issue of joint and several liabilities. Having a proper legal structure will limit the extent of the liability for both parties. An LLC covers most of this and covers the investment as well. This is why having a proper legal structure for the partnership is critical.
In order to pay a fair amount on taxes, you will need to figure out how to reinvest money into the business depending on the kind of business you run.
The partnership between Phil Knight and Bill Bowerman at the Blue Ribbon Company created the giant that we all know as Nike today. One of the first things they did before they started trading together was to see a lawyer. Together, they figured out how to distribute their cash. At the time, it all went into stock and inventory. And they succeeded. NIKE revenue for the quarter ending May 31, 2020 was $6.31 billion dollars.
Travel Write Offs
As long as you are actually conducting business in a city other than the one you live in, there are multiple business expenses that generally qualify as tax-deductible. Transportation, meals and lodging all qualify. The IRS will let you deduct dining expenses, within reason.
According to the IRS website, the deduction for business meals is generally limited to 50 percent of the cost. It gets better, any expenses you incur that are necessary for your business trip, like registration for an event, renting equipment for a presentation, or dry cleaning and laundry for your business apparel, all qualify for tax deduction.
All of these courses are included in our Unlimited Access Package. This bundle of online modules is everything you need to build your tax business. These modules are led by CPA, attorney, best-selling author and radio show host Mark Kohler. Mark has built a successful tax business that experienced on average a 30% growth rate year over year and is now one of the most successful firms in the country.
At My Tax Courses Online, we are excited to be bringing you the very latest in tax development so that your business and your clients flourish, especially in this environment.
Sign up today and keep an eye out for critical updates on the different webinars we will be hosting regularly.