David Roof, CPA

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Capital Gains vs Income TaxesNot all income is taxed the same.Income taxes apply to the money you earn from working — li...
03/04/2026

Capital Gains vs Income Taxes

Not all income is taxed the same.

Income taxes apply to the money you earn from working — like W-2 wages, bonuses, or business income.

Capital gains taxes apply when you sell an asset for a profit — like stocks, real estate, or cryptocurrency:

One key rule to remember:
If you hold an investment longer than one year, it may qualify for lower long-term capital gains tax rates.
That simple timing difference can save a lot in taxes.

Did you know…Short-term capital gains are taxed just like your regular income.That means if you sell an investment you’v...
03/02/2026

Did you know…

Short-term capital gains are taxed just like your regular income.

That means if you sell an investment you’ve held for less than a year, the profit gets taxed at your normal tax rate — the same rate as your paycheck.

But if you hold it for more than one year?

It’s taxed at long-term capital gains rates — which are usually lower.

Selling too quickly could cost you more than you think.
Before you hit “sell,” make sure you know how long you’ve held it.

Timing matters.

If you made money on Venmo, PayPal, Etsy, DoorDash, freelance work, or any other platform — it counts.Even if you didn’t...
03/01/2026

If you made money on Venmo, PayPal, Etsy, DoorDash, freelance work, or any other platform — it counts.

Even if you didn’t receive a 1099 yet.

Even if it was “just a little extra.”
Even if you already spent it.

1099 income = taxable income.

The mistake I see most?

People don’t set anything aside… and April becomes painful.

A good rule of thumb:

Set aside 20–30% of your side income for taxes.
Side income is great.

Just make sure you’re planning for it.

If you’ve started a side hustle this year and haven’t adjusted yet, now is the time.

The most expensive word in taxes?“Later.”“I’ll deal with it later.”“I’ll fix my withholding later.”“I’ll set aside money...
02/26/2026

The most expensive word in taxes?

“Later.”

“I’ll deal with it later.”
“I’ll fix my withholding later.”
“I’ll set aside money later.”
“I’ll respond to that IRS letter later.”

Later usually turns into:
• Penalties
• Interest
• Stress
• Bigger problems

Small tax issues are usually manageable.
Ignored tax issues rarely stay small.

If something has been sitting on your desk (or in your inbox), this is your sign to handle it.

Why consider a Roth IRA?A Roth IRA isn’t about a tax break today — it’s about tax-free income later.Here’s why many peop...
02/20/2026

Why consider a Roth IRA?

A Roth IRA isn’t about a tax break today — it’s about tax-free income later.

Here’s why many people love it:
• Your money grows tax-free
• Withdrawals in retirement are tax-free
• No required minimum distributions
• Great option if you’re in a lower tax bracket now

You pay the tax now… so you don’t have to later.

It’s especially powerful for younger earners, those expecting higher income in the future, or anyone who wants tax diversification in retirement.

If you’re not sure whether a Roth makes sense for you, it’s worth running the numbers. The right strategy depends on your full picture.

Let’s talk about something that happens more than people admit…You file your tax return.And you can’t pay all of it.Firs...
02/18/2026

Let’s talk about something that happens more than people admit…

You file your tax return.
And you can’t pay all of it.

First — take a breath.
Second — do NOT ignore it.

Here’s what you should do:

• File the return anyway.
The failure-to-file penalty is worse than the failure-to-pay penalty.

• Pay what you can.
Even a partial payment reduces penalties and interest.

• Set up a payment plan.
The IRS offers installment agreements. It’s usually easier than people think.

• Adjust your withholding or estimates for this year.
Owing once is frustrating. Owing every year is preventable.

Now here’s what NOT to do:

• Don’t avoid filing.
• Don’t stick the letter in a drawer.
• Don’t drain retirement accounts in a panic.
• Don’t put it all on a high-interest credit card without understanding your options.

The IRS wants communication. They get concerned when they hear nothing.

If you’re in this situation, you’re not alone — and there are structured ways to handle it without making it worse.

Thinking about becoming an S-Corporation? Here’s how it actually works:First — you don’t “become” an S-Corp by itself.Yo...
02/17/2026

Thinking about becoming an S-Corporation? Here’s how it actually works:

First — you don’t “become” an S-Corp by itself.

You:

Form an LLC or Corporation

Elect S-Corp status with the IRS (Form 2553)

Run payroll for yourself

File an S-Corp tax return (Form 1120-S)

Why do people do it?

✔ Potential self-employment tax savings
✔ More structured compensation
✔ Professional credibility

But it’s not for everyone.
You need consistent profit and the ability to pay yourself a reasonable salary.

If your business is growing, it might be time to look at it.

Biggest mistake I see when someone moves to an S Corporation?They stop paying themselves payroll.Somewhere along the way...
02/16/2026

Biggest mistake I see when someone moves to an S Corporation?

They stop paying themselves payroll.

Somewhere along the way they heard,
“S Corps save you on self-employment tax.”
That’s only half the story.

Yes — S Corps can reduce self-employment tax.
But only after you pay yourself a reasonable salary.
If you:
• Take all the profit as distributions
• Run no payroll
• Or pay yourself something unrealistically low

You’re asking for IRS attention.
An S Corp isn’t a magic tax button.

It’s a structure that has rules.

Before you elect S Corp status, make sure:
✔ The profit supports payroll
✔ The salary is reasonable for what you do
✔ You’re actually saving money after payroll costs

Sometimes it makes sense.
Sometimes it doesn’t.
The key is running the numbers first.

The Biggest Mistake I See on Schedule C…Mixing personal and business expenses.If it’s not ordinary and necessary for you...
02/12/2026

The Biggest Mistake I See on Schedule C…

Mixing personal and business expenses.

If it’s not ordinary and necessary for your business, it does NOT belong on Schedule C.

That Amazon order? That Target receipt? That dinner out?

If you can’t confidently explain how it directly relates to your business, it’s probably not deductible.

Schedule C isn’t a “see what sticks” form.

It’s a profit-and-loss statement for your business.
Blurring the line between personal and business:
• Raises audit risk
• Overstates expenses
• Creates messy bookkeeping
• Can cost you penalties later

The fix?

Separate bank account.
Separate credit card.
Clean records.

Your business deserves to be treated like a business.
Need help cleaning up your Schedule C? Let’s talk.

Clergy Housing Allowance 101A housing allowance can be one of the biggest tax benefits available to ministers — but only...
02/10/2026

Clergy Housing Allowance 101

A housing allowance can be one of the biggest tax benefits available to ministers — but only if it’s done correctly.

✔️ Must be approved in advance
✔️ Must be reasonable
✔️ Limited to actual housing costs or fair rental value
✔️ Excluded from federal income tax
❌ Still subject to self-employment tax

Miss one step, and the IRS won’t be impressed.

If you’re clergy (or a church paying clergy), this is not a “set it and forget it” situation. A little planning goes a long way.

“Can I deduct that?”Here’s my favorite rule of thumb 👇If it’s a business expense and you could look an IRS agent in the ...
02/10/2026

“Can I deduct that?”
Here’s my favorite rule of thumb 👇

If it’s a business expense and you could look an IRS agent in the eye and say it out loud without giggling…

✔️ Probably deductible

Personal expenses dressed up as “business”?

❌ That’s how audits get spicy

When in doubt, ask before you deduct.
Your future self will thank you.

Address

21 S Broadway Street SW
Clear Lake, SD
57201

Opening Hours

Tuesday 8am - 4pm
Wednesday 8am - 4pm
Thursday 8am - 4pm
Friday 8am - 1pm

Telephone

+13157415412

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