Jamie | The Tax Reduction Network

Laid Off or About To Retire

Washington DC-.- It’s even worse than we thought! Our President , Congress and the IRS are after your money, in bigger ways than ever. We all know taxes are going to skyrocket to pay for even more government bailouts of failing health insurers, the $34 trillion dollar deficit and $200 trillion in unfunded entitlements and of course runaway congressional spending. But no one was ready for the full scale assault headed our way from our leaders in Washington D.C.

Everything You Own Will Be affected By The Tax Cuts And Jobs Act, and Bidenonomics!

You know the economy is a real mess. 95 Million people have quit looking for work! Out of control government spending, a massive and unchecked federal deficit politicians more concerned about getting re-elected than doing what is best for our country! And to be fair to the present administration they inherited a lot of problems. But rather than cutting spending and reducing tax rates they are planning massive tax increases on everyone. No matter what your income bracket, or your age, or net worth, everything you own will be fair game.

New Tax Hikes Only On The Wealthy Sound Good on Paper Until They Affect Your Family Too!

While it sounds good to “soak the rich”, the reality is that any time this was attempted by congress, the result was even higher unemployment and lower standards of living. Think about the “Carter Years”. He raised taxes and the economy went down the tubes! We are truly headed that way to help pay for the new “afforable health-care” not to mention paying down all the government debt the Treasury is issuing daily! You work over half the year now to pay all your taxes, but what if you lose your job because your employers’ taxes go through the roof and they have to send more money to Washington so you’re out of work. Just ask the 12 million hard-working Americans that this has already happened too! What sounds good on the 6 p.m. news tonight and putting people back to work NOW are two different things.

How To Actually Grow Wealthy Despite Congress

Tax reform means opportunity. And with the new tax law changes there are literally dozens of new legal ways to reduce your income tax liability. The problem is you won’t get that information from watching TV, or listening to your tax payer bailed out

banker, or any ”traditional” sources of help. What You Need Now Is Real Clear Tax & Financial Advice.

New Legal Tax Reduction & Financial Strategies To Help you Keep More of What You Earn!

Because we feel so strongly about helping people gain financial independence in these troubling financial times we have put together a free report that we believe is a must read for all taxpayers. This report will give you insight into how to prosper during this new era of skyrocketing tax increases, and out of control government spending that we all know are coming.

*The Best Ways To Cut Your Taxes Now under the current administration and Congress , before and after 2024 presidential elections!
*How To Save $170,000 in taxes over the next ten years
*What you must do now to avoid paying taxes on social security income (You or a loved one must find out how simple this is, to legally avoid paying these taxes now, which are truly a hardship for retirees)
*How to reduce the cost of your Medicare premiums set to increase by 52% !
*Exposing the cruel retirement hoax. Your company and the government will not take care of you. Discover the truth about your retirement years, and the secrets you must know now so you won’t run out of money!
*The number one essential ingredient, that everyone must have in their financial life, to assure the best chance of success. This technique has been used by wealthy for decades. Learn how to apply this regardless of your situation!
*The startling secret of how to stop worrying about financial meltdowns, and have real peace of mind.
*Why you must start NOW, to get all the tax reduction strategies working together to save you money!
*How to take full advantage of The Tax Cuts and Jobs Act Before Congress Realizes What They Have Done! And lots more! It could be repealed after 2025!

Free Report Reveals Tax & Financial Strategies You Must Use Now!

Just click the link to receive this tax saving information.

free report

Real Clear Tax Advice

Tax Credits for Electric Vehicles: The Latest from the IRS

The IRS recently issued new guidance on electric vehicles (EVs). There are four ways you can potentially benefit from a federal tax credit for an EV you place in service in 2023 or later:

Purchase an EV, and claim the clean vehicle credit.
Lease an EV, and benefit from the lessor’s EV discount
Purchase a used EV that qualifies for the used EV tax credit.
Purchase an EV for business use, and claim the new commercial clean vehicle tax credit.

The new clean vehicle credit is available through 2032, with a maximum credit of $7,500.

To qualify for the clean vehicle credit, you must meet specific criteria, including income limits, vehicle price caps, and domestic assembly requirements. The credit amount for vehicles delivered on or after April 18, 2023, depends on the vehicle meeting critical minerals sourcing and/or battery components sourcing requirements.

If you can’t find an EV that qualifies for the credit or your income is too high, you can lease an EV from a leasing company that can claim up to a $7,500 commercial clean vehicle tax credit. The leasing company may then pass on all or part of the credit to you through reduced leasing costs.

For used EV purchases, you can earn a credit of up to $4,000, but you must buy the vehicle from a dealer and meet the law’s income caps and other restrictions.

Finally, if you purchase an EV for business use, you can qualify for the commercial clean vehicle tax credit, which is not subject to critical minerals or battery components rules, making it easier to qualify for this credit starting April 18, 2023.

To claim an EV credit, the seller must complete a seller’s report and provide a copy to you and the IRS. For the clean vehicle credit, you will file IRS Form 8936; for the commercial clean vehicle credit, you will file IRS Form 8936-A.

Using Family Loans to Secure Better Home Loan Interest Rates

Here’s some information on how you can help a family member buy a home by making a loan to them while ensuring that you and the family member benefit from a tax-smart loan structure.

With the current national average interest rates for 30-year and 15-year fixed-rate mortgages at 6.81 percent and 6.13 percent, respectively, family loans can offer a much more attractive alternative. By charging the Applicable Federal Rate (AFR) as interest, you can give the borrower a good deal without giving yourself a tax headache.

The IRS issues new AFRs for term loans every month. The rates for April 2023 are as follows:

Short-term loan (three years or less): 4.86 percent
Mid-term loan (over three years but not more than nine years): 4.15 percent
Long-term loan (over nine years): 4.02 percent

Charging at least the AFR for a term loan to a family member allows you to avoid federal income tax and federal gift tax complications.

But if you charge less than the AFR, you may need to navigate some tax complications. Two tax-law exceptions, the $10,000 and $100,000 loopholes, can help you avoid these complications, although they may not be suitable for all home loans.

It is crucial to document the loan with a written promissory note and secure it with the borrower’s home for them to claim deductions for qualified residence interest expenses. Make sure the borrower signs the note and that the note includes details such as the interest rate, a schedule of interest and principal payments, and any security or collateral for the loan.

In conclusion, family loans can provide homebuyers with better interest rates than commercial lenders offer, especially if family members charge the AFR. Remember to consider the loan terms and tax consequences when structuring the loan.

Basic Estate Planning

You need an estate plan, regardless of whether or not you are among the ultra-rich. As recent news has shown, even those who have won the lottery or have substantial wealth can fall victim to poor estate planning.

While federal estate taxes may not concern you, you need a will to have your wishes honored after your death. Without a will, state law dictates the distribution of your assets, which may not align with your intentions. Additionally, if you have minor children, a will allows you to name a guardian to care for them in the event of your untimely passing.

Your heirs will want to avoid probate because it can be a costly and time-consuming legal process. A living trust gives you a valuable tool to avoid probate. By transferring legal ownership of your assets to the trust, you can ensure that your beneficiaries receive them without suffering through probate.

You can amend your living trust as circumstances change, providing flexibility and control over your assets.

It is also essential to keep your beneficiary designations up-to-date, as they take precedence over wills and living trusts regarding asset distribution.

Additionally, if your estate will suffer from federal or state death taxes, you should plan to minimize your exposure.

Estate planning is not a one-time event but a process that you should review and update regularly to accommodate life changes and fluctuations in estate and death tax rules. It is recommended that you check your estate plan annually to ensure it aligns with your wishes and circumstances.

One Ugly Rule for S Corp Owners Deducting Health Insurance

When your S corporation covers or reimburses your more-than-2-percent-shareholder-employee health insurance expenses, it classifies the payments as box 1 W-2 wages but not box 3 or box 5 wages.

When calculating the amount eligible for the Form 1040 self-employed health insurance deduction, you must use your Medicare wages (listed in box 5 of Form W-2) as your “earned income” rather than the amount reported in box 1.

Here are two examples that show you the impact of this rule:

Ted’s S corporation pays him $0 in cash wages and reimburses him $18,000 for health insurance. His W-2 shows $18,000 as box 1 wages and $0 as box 3 and box 5 wages. Although Ted has $18,000 in taxable wage income from the corporation’s reimbursement of his health insurance, his Form 1040 self-employed health insurance deduction is $0 due to his lack of Medicare wages.
Janet’s corporation pays her $107,000 in cash wages and reimburses her $22,000 for health insurance. Janet’s W-2 from her S corporation shows box 1 wages of $129,000, box 3 wages of $107,000, and box 5 wages of $107,000. The IRS allows her Form 1040 self-employed health insurance deduction of $22,000 because her Medicare wages exceed the insurance cost.

To avoid unfavorable tax outcomes, ensure that your S corporation reports Medicare wages (box 5) equal to or greater than the health insurance costs paid or reimbursed.