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Tax-Saving Tips - December 2019

Does No 1099 Mean No Deduction for You? Imagine this: you didn’t issue Form 1099s to your contractors. Now, the IRS is auditing your tax return, and the auditor claims you lose your deductions because you didn’t issue the Form 1099s. Is this correct?
No. IRS auditors often make this claim, but they are incorrect.
There is no provision in the federal tax law that denies you a deduction for labor expenses simply because you didn’t file the required Form 1099s. But the tax court has stated that the non-filing of required Form 1099s can cast doubt on the legitimacy of the deduction claimed.
As with any deduction claimed on the tax return, you have to keep sufficient records to substantiate the deduction amount. If you had filed Form 1099s, then this would have been solid documentation to help prove the expenses to the auditor.
But since you didn’t file Form 1099s, you need to provide ironclad documentation to prove the expenses, including some or all of the following:
·Bank statement transactio…

Tax Saving Tips - November 2019

2019 Year-End Strategy Edition

2019 Last-Minute Section 199A Strategies That Reduce Taxes Remember to consider your Section 199A deduction in your year-end tax planning.
If you don’t, you could end up with a big fat $0 for your deduction amount. We’ll review four year-end moves that (a) reduce your income taxes and (b) boost your Section 199A deduction at the same time.
First Things First
If your taxable income is above $160,700 (or $321,400 on a joint return), then your type of business, wages paid, and property can reduce and/or eliminate your Section 199A tax deduction.
If your deduction amount is less than 20 percent of your qualified business income (QBI), then consider using one or more of the strategies described below to increase your Section 199A deduction.
1. Harvest Capital Losses
Capital gains add to your taxable income, which is the income that
·determines your eligibility for the Section 199A tax deduction, ·sets the upper limit (ceiling) on the amount of your Section 199A tax d…