Howard Tax Prep LLC

06/01/2026

FROM $100K A YEAR TO $994 A MONTH: HOW SELF-EMPLOYED PEOPLE ACCIDENTALLY SABOTAGE THEIR OWN RETIREMENT.

A self-employed trucker made $100K+ a year for 20 years.
His Social Security check at 67? $612 a month. Not because he didn't work hard. Because he wrote off everything — and barely reported any profit for two decades. Social Security only counts what you report, not what you earned.

The tax strategy that saves you thousands today can cost you tens of thousands every single year in retirement. This is exactly what we see at Howard Tax Prep LLC — and it's exactly why we talk about it.
Full story in this week's edition of The Self-Employed Tax Files — link in the comments.

05/25/2026

If you're going to fix & flip properties, you need to provide your bookkeeper/account with the following AS YOU GET NEW PROPERTIES, NOT AT THE END OF THE YEAR. ALSO, YOU DON'T GET TO WRITE OFF THE EXPENSES UNTIL YOU SELL THE PROPERTY!

Your accoutant cannot properly track inventory (the house you purchased to fix and flip), WIP (work in progress, which are the expenses you incur holding and fixing the property) loan balances (for most this is the hardmoney loan, or credit card charges), or profit if they are receiving information 8 months later from screenshots, Cash App history, and “I think that was for Oak Street.” 😭

HERE’S WHAT YOU SHOULD BE PROVIDING IMMEDIATELY WHEN YOU BUY A PROPERTY:

• Property address
• Purchase contract
• Closing statement (HUD/CD/ALTA)
• Hard money loan documents
• Draw schedules/statements
• Scope of work or rehab budget
• Utility account information
• Insurance information
• Contractor invoices & receipts
• W-9s for contractors
• Permit receipts
• Security invoices (Dawgs, cameras, boarding, etc.)
• Which expenses belong to WHICH PROPERTY
• AGAIN, WHICH EXPENSES BELONG TO WHICH PROPERTY
• Bank statements & credit card statements monthly
• Any personal funds used for property expenses

And PLEASE stop mixing:
• personal expenses
• girlfriend accounts
• and property expenses together.

Fix & flip accounting is NOT regular bookkeeping. These properties are inventory. Rehab costs are typically capitalized to the balance sheet — not simply “expensed.”

The cleaner your records are:
✔ the faster your books get done
✔ the more accurate your profit is
✔ the easier tax season becomes
✔ the easier it is to get funding
✔ and the lower your cleanup bill will probably be.

Waiting until tax season to organize fix & flip records is one of the most expensive mistakes real estate investors make.

05/16/2026

REAL ESTATE INVESTORS & BUSINESS OWNERS: NOW is the time to start reviewing your finances if you want to lower your taxes NEXT year — not in April when it’s too late. You should also be reviewing ways to reduce your cash flow.

THINGS TO REDUCE YOUR TAX BILL IN 2027.

Real estate investors:

** Track mileage to properties, whether you are flipping or own rentals.
** Review depreciation schedules for missed depreciation opportunities.
** Get an itemized scope of work for repairs and improvements.

Real estate investors & Business Owners

** Track mileage to the bank for deposits, wires, withdrawals, etc.
** Track mileage to business dinners, conferences, continuing education courses, etc.
** Track the amount you’re spending on GAS! This year, the cost of gas added to the actual vehicle cost will certainly exceed the standard mileage deduction.
** You still need to track mileage; please don’t guess.
** Make sure to track repairs, insurance, car washes, registration, interest, etc.

Real estate investors & Business Owners

** You can pay a child who works in the business up to $16,100 free of FEDERAL taxes. This is a deduction for you, and potential retirement plan growth for your children (if you put the money into a Roth IRA).
** See the compliance issues in the next post to ensure you’re doing things correctly.

THINGS TO INCREASE CASH FLOW

Review food & meal spending

** Excessive restaurant spending destroys cash flow quickly.
** Eat a protein-packed breakfast to reduce the feeling of starvation.
** If you must dine out, USE THE APPS FOR DEALS. Many fast-food restaurants offer deals in their apps.
** Separate true business meals from personal spending.

Review subscriptions & recurring charges

** Cancel software, memberships, and services you no longer use.
** Small monthly charges add up fast.

Negotiate with vendors & lenders.

** Call and ask for a lower interest rate.
** Call vendors and ask about volume discounts.
** Ask about refinance options or hardship.
** Renegotiate recurring service contracts.
** Compare insurance policies and utility providers.

04/21/2026

The IRS sent a bill for $5,000 to a young family (married couple with young children). The IRS claimed income was missing, but that's all they said. What the IRS didn't say:

1.) We see that you have 1099 income, so this income should be reduced by your expenses.

2.) We see you attended school; you might qualify for a $2,500 education credit.

The truth is, this family doesn't owe the IRS a got-darn dime, but had they never questioned the bill and come to me, the IRS would have taken advantage of them! If you've received a bill from the IRS, and you don't understand it, or you need guidance on what to do, contact me for a tax correspondence review.

04/10/2026

"You can no longer charge any fee for processing, reviewing, or accepting a rental application. The only fee related to tenant screening that survives is a background check fee — and that one comes with strict conditions." Late fees were also addressed in the final bill.

** 5-day grace period: You cannot charge a late fee until rent is at least 5 days past due — the earliest you can charge is day 6.

** Cap on first $1,000 in rent: Late fees cannot exceed $10 on the first $1,000 in monthly rent.

** Cap above $1,000: Late fees cannot exceed 5% of any rent amount over $1,000.

** Cannot be used in eviction calculations: Late fees may not be included in the rent amount for purposes of eviction proceedings.

“You can no longer charge any fee for processing, reviewing, or accepting a rental application. The only fee related to tenant screening that survives is a background check fee — and that one…

03/27/2026

NOT READY TO FILE YET? Request an extension by texting the word EXTEND to 21000!

03/26/2026

Not all tax preparers are built the same. When your income hits $250,000 or more, your tax return stops being simple — and the mistakes get expensive. Here's what I deal with regularly that some accountants/tax preparers have never seen:

🔹 Alternative Minimum Tax (AMT) & AMT Credits — because the IRS created a entirely different tax system for high income earners.
🔹 Pro-Rata IRA issues — one wrong move on a Backdoor Roth and you've got a surprise tax bill.
🔹 Equity compensation (RSUs, ISOs, NQSOs) — each one is taxed differently, and timing is everything.
🔹 Passive activity loss limitations — your real estate losses may not be as deductible as you think.
🔹 Net Investment Income Tax (NIIT) — the 3.8% surtax most people don't see coming at $250K.
🔹 State residency & multi-state filing issues — working or living in multiple states is a whole situation.
🔹 Estimated tax penalties — because when you earn a lot, you owe a lot... quarterly.

If your household income is $250K+, you have portfolio income, and you're thinking of doing back door roth's, it might be time for a conversation.

Howard Tax Prep LLC — We Fix Tax Problems. 💚
📞 (855) 578-9854 | [email protected]

03/17/2026

This year, we're creating educational pieces for our that show them how their tax "refund" could have GROWN IN VALUE FOR THEM, instead of being loaned out INTEREST FREE to a government that doesn't give 2 shakes about where the taxpayer want the funds to go. When given an opportunity, you need to make the most of it!

02/09/2026

“Start-up expenses” are certain costs (money spent) you incur before a new business begins. In the case of a rental property business, these are costs incurred before you offer the property for rent.

In our South Loop of Chicago Tax Preparation office, and our Homewood, Il tax preparation office, we often encounter taxpayers who want to generate additional revenue without ha…

02/02/2026

LANDLORDS: It's imperative that you choose the right tax accountant to accurately prepare your taxes. Every year I have to fix DEPRECIATION on 8 out of 10 returns. In some cases, the client has to pay a state money they wouldn't have owed, simply because depreciation wasn't taken. You also have to be careful that you aren't allowing a preparer to commit FRAUD on your tax return. Here's a blog article that I wrote about the IRS coming back 27 years later to audit a return. "Twenty-seven years after those returns were filed, the IRS issued a notice of deficiency. Relying on the fraud exception in Section 6501(c)(1), the IRS bypassed the normal three-year statute of limitations. They asserted that Murrin owed:
$65,000 in back taxes
$13,000 in penalties
Over $250,000 in interest"

“Stephanie Murrin filed her 1993–1999 tax returns on time. There was no evidence that she personally intended to evade taxes. However, her preparer, Duane Howell, inserted false items on thos…