Tax knowledge in a simplified format designed for ordinary humans to understand.
The Tax Geek is an Enrolled Agent with over ten years tax preparation experience. He has also taught continuing education classes for other tax professionals.
Note: This channel is for educational and informational purposes. It is not intended to render tax advice for specific situations. If you have concerns about your individual tax situation, please engage a qualified tax professional.
Question, what if my losses for 2022 -$9000 and i made Capital Gain in 2023 +$10000 What version will be correct? a. $10000-$9000 (losses from 2022) = $1000 Taxable income b. $10000-$3000 (maximum deduct) = Taxable $7000 and $6000 losses will carry over to 2024? chatGPT says i should be able to combine my carry losses with gain without any limitations...
It seems like A is the correct calculations. Also Investopedia got an example: "Realized Losses and Recognized Gains Another category is recognized gains. Although all capital gains realized in a given year must be reported for that year, there are some limits on the amount of capital losses that may be declared in a given year in some cases. Again, while any loss can ultimately be netted against any capital gain realized in the same tax year, only $3,000 of capital loss can be deducted against earned or other types of income in a given year. 1 For example, say that Frank realized a capital gain of $10,000. He also realized a capital loss of $30,000. He will be apply $10,000 of his loss against his gain, but can only deduct an additional $3,000 of his loss against his other income for that year. Then, he can deduct the remaining $17,000 ($20,000 - $3,000) of his capital loss in $3,000 increments from income every year from then on until the entire amount has been deducted. However, if he realizes another capital gain in a future year before he has exhausted this amount, then he can deduct the total remaining loss against that gain. So, say he deducts $3,000 of that $17,000 loss in each of the next two years and then realizes a $20,000 capital gain. Frank can then deduct the remaining $11,000 of loss ($17,000 - $6,000) from that capital gain, leaving a taxable gain of only $9,000."
As long as you have a tax liability (which is the number on line 16 of your form 1040, you can take advantage of the credit to lower that figure and increase your refund.
I just registered an LLC with my state. I do not have confirmation from the state, nor do I have an EIN yet. When will my 90 days to file a BOIR begin? What is considered the "date of formation?" Thank you
When you receive your confirmation from the state, that is considered your date of formation. You will have 90 days from that date to comply with BOIR.
Thanks. My question is if I bought 100 shares at $100 and another 100 shares at $90 within 30 days, and then sold them at $95 together to break even for 0 gain or loss. Then is it qualified as wash sale for the first 100 shares which actually is a loss?
The loss on the first lot of shares you purchased would be a "wash sale." For tax purposes, the $500 loss on the sale of the first lot of securities would be disregarded and you would have a $500 recognized short-term gain.
Thanks. Good video. Question: I just purchased a home to rent out and I’ve paid a moving company to move some furniture from my existing place to the rental property. Are those expenses deductible? If so, which line item on Schedule E? If they’re are not immediately deductible, can I at least include them in the cost basis for furniture and take depreciation on them over time?
Technically, any expenses you incur before you place the property into service are added to the basis of the property. That said, you probably wouldn’t get into trouble if you deducted the cost in the current year if you place the property into service soon after you purchased it. As for depreciating the furniture itself, the depreciable basis of the furniture is its fair market value as of the date you converted it, and depreciated under 5 year MACRS.
@@TheTaxGeek just a follow up if you don’t mind ….when you say add the cost to the basis of the property in one of your options, I assume you mean to the home basis(to be depreciated over 27.5 years) as opposed to the basis of the furniture, with the shorter depreciation schedule? Or maybe either one is acceptable?
Can I take the credit if I move to a second home already purchased that were upgraded with energy efficient products? I will become personal residence next week of second home which was purchased three years ago.
Im curious, what is the benefit of removing form 8880, if it will be matched anyway from the IRS to their employer plan or IRA. Sounds like just some extra strings attached. But doesnt really affect the bottom line for the IRS in any tangible way. (All that said, I didnt read the provision so this opion is really an uNqualified one 😅)
The biggest problem with the "Saver's Credit" is that it's limited to tax liability. Many taxpayers have income low enough to claim the credit, but their low taxable income doesn't generate enough tax to be able to take the full Credit. I believe that the "Saver's Match" removes that limitation, giving most taxpayers more, but, by depositing the match into a retirement account (a) helps lower income people save for retirement and (b) cuts down on potential fraudulent Savers Match claims.
@@TheTaxGeek That is a good rational, especially when you mentioned about the potential to reduce fraudulent claims. That makes way more sense now, thanks!
SECURE 2.0 UPDATE: Rolling unused 529 funds into a Roth IRA for the beneficiary has 2 limitations: (a) the account must be at least 15 years old, and (b) the maximum that can be rolled over is $35,000
Hi The Tax Geek, love your videos. What resources/websites do you recommend for staying abreast on the latest and most accurate tax information? Thanks!
Just about every topic I cover lists resources and information in the description. Most of my information comes directly from the IRS, but I do back it up from outside sources, mainly investopedia.com and nerdwallet.com. Both sites are regularly updated with language that's simpler to follow than the IRS. You'll often see headlines in the mainstream media, but these stories often lack context and don't give the entire story. Major tax preparation sites such as hrblock.com and turbotax.com also provide useful and up-to-date information. Just remember that all commercial websites are trying to sell you something, which is why I double check with the IRS. Thanks for watching!
Thanks so much for this info. Any clue on when to check box 3B? This LLC that is taxed as a Partnership has one US person and 3 others that are foreigners, with no ITIN yet. Should we check box 3b? I'm not 100% sure. BTW love how you explain everything!
I am a Sterilize processing Technician,and I drive 50 minutes to my work everyday is that mileage deductible?I need help.I’m not tracking my mileage because I don’t know if it’s mileage deductible
Yes, you can, but they cannot be the qualifying child of another taxpayer. My video on claiming dependents ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-kXdSK0LHhq8.html helps to clarify this.
@@TheTaxGeek thank you, I have one more question, if a TP has taken loan for qualifying children or relative for a student education in a bank can he able to claim deduction for the loan (1098-E) or taxpayer only can able to claim for his own children,spouse and him/herself alone?
In your professional experience with individuals that have receive a form 1099-SSA, are they well informed about the taxable consequences of the benefits? If not than who should be better at informing them, the SSA or tax prefessionals generally? Awesome video as usual!
No, the vast majority of taxpayers have no idea why and how their Social Security benefits are taxed. In fact, a lot of Tax Professionals don't know a sufficient amount about it to properly explain it to their clients. It's really not the job of the SSA to explain this; only note that some benefits may be subject to taxation. It's actually up to the IRS and Tax Professionals to provide this education, BUT, because the computation is complex and involved, such education is hard to do.
The trust is not included in the BOI reporting for the corporation/LLC. However, if the trust owns more than 25% of the entity, the trust itself has a BOIR.
As a sole proprietorship with just an EIN would you need to file for a BOIR? Also, if you register for a DBA with the state do you have to file for a BOIR???
Only if you have created an entity, such as an LLC or Corporation, is there a BOIR requirement. There is no requirement for simply having a DBA registered with the state or local government.
Oh wow. Standard mileage is completely useless then because the commute can a huge portion of the mileage. If I’m already paying around 30 cents per mile to drive my truck, then add insurance, repairs, etc., I’m at 40 -50 cents per mile. I’ll just keep it simple and deduct my expenses. Thank you for the video.
Even if you claim actual expenses for the vehicle, you still have to track business v. personal mileage. That creates the fraction of your actual expenses you can deduct.
@@TheTaxGeek hey there. Thank you for responding. My question would be is the “commute” portion always to be accounted for as personal travel? Even when you’re not using the standard mileage rate?
Arizona is a community property state and your income, deductions, withholdings, and credits (except EIC) are shared 50-50. IRS rulings and procedures are very complex, as are the community property laws of each of the nine states that are community property states. It's usually best to consult with a qualified Tax Professional in your community to make sure everything is submitted properly.
Good video. What do you do regarding receiving a partial distribution from a will of a deceased sister? The amount is 50k. Is it taxable on both Massachusetts state tax and IRS also. Thanks in advance. Love your show and just subscribed with Like.
Well, it depends. If the estate is passing through to you income that would have been taxable to the decedent then it would be taxable to you.. If it's taxable, the income will be reported to you on either a Schedule K-1 or a 1099R. A straight money or property inheritance is not taxable to you. If it's taxable to the Federal government, it most likely is taxable to Massachusetts. Although I don't know the detailed ins and outs of Massachusetts income tax. For more information on how death affects taxes, you might want to check out this video: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-pIi_kohV8uI.html