The standard refundable credit is $30 for Single taxpayers and $40 for Married Couples. I’m assuming that most tax software programs are like our Lacerte and are automatically claiming this; but according to IRS, many of those folks doing their returns by hand are forgetting to enter it.

Q:

Subject: Thank you

 

Thank you for your great article. We were about to from an S corp because all professionals we meet advised us so. After reading your article, we changed our mind. My wife has an online business with gross income arround 70000 a year. It is basically a one man’s side job and we use our home as office. If we form a C Corp, do we still get the benefit of home office deduction such as mortgate, house repaire/maintanence, utility, etc? Perhaps, we can even use a more aggressive formula to take the benefit? It would be great if you could mention this in your article.

 

Regards,

A:

Leasing a home office to a C corp has long been a very easy way to pull money out of the corp without having to pay any of the payroll taxes that would be required for salaries and avoid the double taxation of dividends.

Any experienced tax pro who understands the power of using C corps can help you set up a good strategy to minimize your taxes via this and the several other similar techniques.

Good luck.

Kerry Kerstetter

Generator Blog had a link to this site, where you can create your own personalized US one and ten dollar bills.

It took me less than a minute to make these:

One Dollar Bill

Ten Dollar Bill

Some day, IRS just may have to adapt to the new fangled definitions of marriage that many people are trying to force onto society.

After linking to this article a few days ago on the ways to reduce taxes on the sale of a small corporation under Sections 1045 and 1202, I was curious to see how well these topics were covered in my main reference sources.

TheTaxBook has good coverage of these on Page 18–9  

QuickFinders online has them covered in their Small Business and Tax Planning For Small Business Handbooks.

Tax Coach Software doesn’t appear to have any coverage of these.  I will be writing to the authors to ask them to consider adding it to their growing list of tax planning modules.

When you’re married, IRS doesn’t consider either spouse to be a Head of Household.