Popular Tax Strategies

• Augusta Rule (14-Day Home Rental Rule):
  • IRC Section 280A(g) – Disallowance of Certain Expenses in Connection With Business Use of Home, Rental of Vacation Homes, Etc.
  • IRS Publication 527, Residential Rental Property: https://www.irs.gov/publications/p527 (While this focuses on regular rentals, it has some relevant information.)
• Auto Lease (Business Vehicle Expenses/Deductions):
  • IRC Section 280F – Limitations on depreciation for luxury automobiles; limitation where certain property used for personal purposes
  • IRS Publication 463, Travel, Gift, and Car Expenses: https://www.irs.gov/publications/p463
• Charity (Charitable Contributions):
  • IRC Section 170 – Charitable, etc., contributions and gifts
  • IRS Publication 526, Charitable Contributions: https://www.irs.gov/publications/p526
• Hiring Your Kids (Employing Family Members):
  • IRS Publication 15 (Circular E), Employer’s Tax Guide: https://www.irs.gov/publications/p15
  • There is no single publication on this topic. Relevant information is spread across various publications dealing with employment taxes and dependent rules.
• Company Type (Choice of Business Entity):
  • IRS Publication 334, Tax Guide for Small Business: https://www.irs.gov/publications/p334
  • IRS Publication 541, Partnerships: https://www.irs.gov/publications/p541
  • IRS Publication 542, Corporations: https://www.irs.gov/publications/p542
• Missing Deductions (Identifying Overlooked Deductible Expenses):
  • IRS Publication 535, Business Expenses: https://www.irs.gov/publications/p535
• Defined Benefit (Defined Benefit Retirement Plans):
  • IRC Section 401 – Qualified pension, profit-sharing, and stock bonus plans
  • IRS Publication 560, Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans): https://www.irs.gov/publications/p560
• Estimated Tax Payments:
  • IRC Section 6654 – Failure by individual to pay estimated income tax
  • IRS Publication 505, Tax Withholding and Estimated Tax: https://www.irs.gov/publications/p505
  • Form 1040-ES, Estimated Tax for Individuals
• Expense Acceleration:
  • IRC Section 162 – Trade or business expenses
  • IRS Publication 535, Business Expenses: https://www.irs.gov/publications/p535
• Health Savings (Health Savings Accounts – HSAs):
  • IRC Section 223 – Health savings accounts
  • IRS Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans: https://www.irs.gov/publications/p969
• Home Office Accountable Plan:
  • IRC Section 280A – Disallowance of Certain Expenses in Connection With Business Use of Home, Rental of Vacation Homes, Etc.
  • IRS Publication 463, Travel, Gift, and Car Expenses (for accountable plan rules): https://www.irs.gov/publications/p463
  • IRS Publication 587, Business Use of Your Home: https://www.irs.gov/publications/p587
• Income Deferment:
  • IRC Section 451 – General rule for taxable year of inclusion
  • IRC Section 453 – Installment method
  • IRS Publication 538, Accounting Periods and Methods: https://www.irs.gov/publications/p538
• Married Filing Jointly vs. Married Filing Separately:
  • IRS Publication 17, Your Federal Income Tax: https://www.irs.gov/publications/p17
  • IRS Publication 501, Dependents, Standard Deduction, and Filing Information: https://www.irs.gov/publications/p501
• QBI Salary Maximizer (Qualified Business Income Deduction and Salary Planning):
  • IRC Section 199A – Qualified business income
  • IRS Publication 535, Business Expenses: https://www.irs.gov/publications/p535
  • IRS Notice 2019-07 (Provides guidance on the QBI deduction): Search on IRS.gov for this Notice.
• 401(k) Plans (including Solo 401(k)s):
  • IRC Section 401 – Qualified pension, profit-sharing, and stock bonus plans
  • IRS Publication 560, Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans): https://www.irs.gov/publications/p560
• S Corporation Election:
  • IRC Subchapter S (Sections 1361-1379)
  • IRS Publication 589, Tax Information for S Corporations: [invalid URL removed]
  • Form 2553, Election by a Small Business Corporation
• Section 179 Expense (Section 179 Expensing):
  • IRC Section 179 – Election to expense certain depreciable business assets
  • IRS Publication 946, How to Depreciate Property: https://www.irs.gov/publications/p946
  • Form 4562, Depreciation and Amortization
• SEP IRA (Simplified Employee Pension IRA):
  • IRC Section 408(k) – Simplified employee pensions
  • IRS Publication 560, Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans): https://www.irs.gov/publications/p560
• Traditional and Roth IRA:
  • IRC Section 408 – Individual retirement accounts
  • IRS Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs): https://www.irs.gov/publications/p590a
  • IRS Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs): https://www.irs.gov/publications/p590b

More Tax Strategies to Consider

Business Start-Up Costs:

• IRC Section 195 – Start-up expenditures
• IRS Publication 535, Business Expenses: https://www.irs.gov/publications/p535
• This covers the deduction and amortization of business start-up and organizational costs. It’s important to differentiate between start-up costs (incurred before the business begins operating) and business expenses (incurred after the business begins operating).

Business Insurance Deductions:

• IRC Section 162 – Trade or business expenses
• IRS Publication 535, Business Expenses: https://www.irs.gov/publications/p535
• Many types of business insurance premiums are deductible, including general liability, professional liability, business interruption, and workers’ compensation insurance. Health insurance premiums for self-employed individuals are also deductible (with certain limitations).

Home Office Deduction (Simplified Method):

• IRC Section 280A – Disallowance of Certain Expenses in Connection With Business Use of Home, Rental of Vacation Homes, Etc.
• IRS Publication 587, Business Use of Your Home: https://www.irs.gov/publications/p587
• While you already have the “Accountable Plan” for home office, it’s worth noting the simplified method as a separate strategy. It offers an easier calculation for the home office deduction, using a standard rate per square foot.

Inventory Management (LIFO/FIFO):

• IRC Sections 471 and 472 – General rule for inventories; Last-in, first-out inventories
• IRS Publication 334, Tax Guide for Small Business: https://www.irs.gov/publications/p334
• The choice between Last-In, First-Out (LIFO) and First-In, First-Out (FIFO) inventory accounting methods can significantly impact taxable income, especially during periods of inflation. LIFO can often result in lower taxable income during inflationary times.

Business Travel Deductions:

• IRC Section 162 – Trade or business expenses
• IRS Publication 463, Travel, Gift, and Car Expenses: https://www.irs.gov/publications/p463
• This includes deductions for transportation, lodging, meals (subject to limitations), and other expenses incurred while traveling for business purposes.

Business Entertainment (Limited):

• IRC Section 274 – Disallowance of certain entertainment, etc., expenses
• IRS Publication 463, Travel, Gift, and Car Expenses: https://www.irs.gov/publications/p463
• While entertainment expenses are generally not deductible, there are limited exceptions, such as business meals (subject to limitations and substantiation requirements).

Research and Development (R&D) Tax Credit:

• IRC Section 41 – Credit for increasing research activities
• IRS Form 6765, Credit for Increasing Research Activities
• This credit is available for businesses that incur qualifying research and development expenses. It can be a significant benefit for businesses in technology, manufacturing, and other innovative industries.

State and Local Tax (SALT) Deductibility (Limited):

• IRC Section 164 – Taxes
• This is more relevant for itemizing individuals. There is a $10,000 limit for individuals on the deduction for state and local taxes, this includes property tax and state income tax or sales tax.

Qualified Opportunity Zones:

• IRC Sections 1400Z-1 and 1400Z-2
• Investing in Qualified Opportunity Funds (QOFs) that invest in designated low-income communities can provide tax benefits, including deferral, reduction, or elimination of capital gains taxes. This is a more complex strategy and requires careful consideration.

Net Operating Losses (NOLs):

• IRC Section 172 – Net operating loss deduction
• IRS Publication 536, Net Operating Losses (NOLs) for Individuals, Estates, and Trusts
• If a business incurs a net operating loss, it can generally be carried forward to future years to offset taxable income. This can help reduce tax liability in subsequent years.

Remember to consult with a qualified tax advisor for personalized guidance tailored to your specific situation. Tax laws are complex and can change. Using these resources as a starting point for your research will be very helpful.