Professional Tax Services at Knob Creek - Richard C Crain, CPA

07/31/2026

🛍️ TENNESSEE’S 2026 SALES TAX-FREE WEEKEND IS HERE! 🎒📚

Tennessee’s annual sales tax holiday begins Friday, July 31, at 12:01 a.m. and continues through Sunday, August 2, at 11:59 p.m.

During the weekend, you can purchase these qualifying items without paying state or local sales tax:

👕 Clothing priced at $100 or less per item
✏️ School and art supplies priced at $100 or less per item
💻 Computers and tablets priced at $1,500 or less per item

Qualifying purchases can be made in stores or online, but the items must be purchased for personal use rather than business use.

Common tax-free items include shirts, pants, shoes, dresses, backpacks, binders, crayons, paper, pens, pencils, computers, and tablets. Items such as jewelry, handbags, cell phones, printer supplies, separately purchased computer software, and sports or recreational equipment generally remain taxable.

Take advantage of the opportunity to save nearly 10% on many back-to-school essentials!

07/07/2026

Trump Accounts: What Every Parent and Business Owner Should Know

Trump Accounts are here, and they open up a smart new way to build wealth for the kids in your life. Here is a plain English rundown from our team.

A Trump Account is a starter retirement account for a child under age 18. The money grows tax deferred and is invested in a U.S. stock index fund. Think of it as an IRA that gets a very early start, sometimes on the day a child is born. To open one, the child needs a Social Security number.

Here is the part that gets people excited. If your child is a U.S. citizen born between January 1, 2025 and December 31, 2028, the federal government will drop a one time $1,000 into the account for you. You do have to open the account and make the election, and you need to be able to claim the child as a dependent for the child tax credit. That is free seed money, so if you have a little one who qualifies, this alone is worth acting on.

Families, grandparents, and friends can add up to $5,000 per year per child combined. Those contributions are made with after tax dollars, so they are not deductible, but the growth is tax deferred until the child is grown. The $5,000 limit starts adjusting for cost of living in 2027. The money generally stays put until January 1 of the year the child turns 18, and after that it is treated like a regular traditional IRA.

Strategies for Individuals and Families

Start early and let time do the heavy lifting. A dollar invested for 18 years has a lot of compounding ahead of it. Even modest yearly contributions can grow into a meaningful head start on retirement or life.

Grab the free money first. If you have a child born in the 2025 through 2028 window, open the account and claim the $1,000 seed. There is no reason to leave that on the table.

Turn birthdays and holidays into investments. Grandparents and relatives who want to give something lasting can contribute toward the $5,000 limit instead of buying one more toy that gets forgotten by spring.

Use it alongside a 529 plan, not instead of one. A 529 is still the better tool for college costs because those withdrawals can be tax-free for education. A Trump Account is more of a long-term retirement head start. Many families will want both, each doing the job it does best.

The Michael and Susan Dell Foundation pledged $250 per child to roughly 25 million children, about $6.25 billion in total. The target group is kids under age 10 who were born before 2025, meaning children who miss the federal $1,000 seed because they were born outside the 2025 through 2028 window, and eligibility is limited to ZIP codes where median family income is below roughly $150,000.

SpaceX President Gwynne Shotwell and her husband announced they are donating stock in the newly public company to fund Trump Accounts for more than two million children, focused on kids ages 11 to 17 in lower-income areas, especially near their home in central Texas.

Strategies for Business Owners

This is where it gets interesting for our business clients. An employer can set up a Trump Account Contribution Program and put up to $2,500 per year into the account of an employee or the employee's child. That contribution is not counted as taxable income to the employee, and it is a deductible expense for the business. It does count against the child's $5,000 annual limit.

Picture an S corporation that offers $2,500 a year toward each employee's kids. That is a powerful recruiting and retention benefit that most competitors are not offering yet. It tells your team you are investing in their families, and it does it with pre-tax dollars rather than a raise that gets taxed away.

If you are an S corporation owner, remember that you are an employee of your own company too, so a properly designed program can direct that $2,500 toward your own child's account. The catch is that the program generally has to be offered fairly across your workforce and not just to owners, so the design matters. That is exactly the kind of thing we help you set up correctly.

One note worth keeping in mind. The $2,500 employer limit is per employee, no matter how many children that employee has. So the benefit is capped per worker, not per kid.

06/09/2026

How One-Owner Businesses Win with the New 50% Childcare Credit

Beginning in 2026, the One Big Beautiful Bill Act increases the employer childcare credit for small businesses to 50 percent of qualified expenses, up to $600,000 per year. Even one-owner businesses can benefit—and the savings are substantial.

If you operate as a sole proprietor, you cannot claim the credit for your own childcare because you are not an employee. But if you hire your spouse as a legitimate W-2 employee, your business qualifies.

For example, on $20,000 in childcare expenses, the 50 percent credit results in a $10,000 dollar-for-dollar tax reduction. The remaining $10,000 is deductible, producing additional tax savings. After your spouse pays tax on the wages, the household comes out thousands of dollars ahead.

Solo S corporation owner-employees also win. Although a more-than-5-percent owner must include the childcare benefit in W-2 wages, the combination of the 50 percent credit plus the deduction outweighs taxes paid on wage inclusion, resulting in thousands in savings.

The key driver is the 50 percent credit. When paired with a deduction for the remaining expense, the math is strongly favorable, despite the benefit being taxable.

06/09/2026

Brutal IRS Trap Wipes Out Goodwill Clothing Deductions

If you donate clothing or household goods to charity, there’s an IRS trap you need to know about.

In a recent Tax Court case, a taxpayer lost a $6,760 charitable deduction—not because the donations were improper, but because his documentation failed to meet strict technical requirements. The court didn’t question his generosity. It denied the deduction because the receipts and Form 8283 were incomplete.

Here’s the key issue: For non-cash donations over $250, you must obtain a contemporaneous written acknowledgment from the charity. For donations over $500, you must also maintain detailed records showing what you donated, when you acquired the items, and their cost or basis. Form 8283 must be completed accurately, including donation dates and fair market values.

Generic receipts that say “miscellaneous household items” are not enough. And once an audit begins, you cannot fix missing documentation afterward. The deduction is simply lost.

The safest approach is proactive. Before donating, prepare a detailed list of items, including descriptions and estimated values; take photographs; and provide the list to the charity so it can reference the list in its acknowledgment. Keep all supporting records with your tax files.

The bottom line: Good intentions are not sufficient. With charitable deductions, documentation is everything.

05/29/2026

If you've had a child in 2025 or 2026, then this applies to you. Trump accounts are live, and you download the official app to obtain the $1,000 per child or to contribute more if you want to. https://trumpaccounts.gov/ If you used our office to file your 2025 tax return then form 4547 has already been filed for your child born in 2025.

Trump Accounts provide eligible American children with tax-advantaged investment accounts courtesy of President Donald J. Trump.

01/12/2026

New Tax Law Changes You Need to Know About

We are your accounting and tax solution. We have the knowledge and experience to serve a wide variety of individuals and businesses. Whatever your need is, message or call us and we will dedicate ourselves to finding the best solution.

01/07/2026

This is the most serious thing concerning 2026 tax returns, the ones you will file in 2027! Plan ahead, or perish!

The impact of the ACA cliff returning in 2026:

A married couple with no dependents (age 64) covered by a Marketplace plan (in TN):

With a household income (MAGI) of $84,600, their Premium Tax Credit is $2,076/mo. = $24,912/yr.

But with an income of $84,601, their Premium Tax Credit is $0.

Yes, a $1 increase in income triggers a $24,912 increase in their health insurance premiums.

This type of situation will be an ugly surprise when taxpayers file in early 2027. Would anyone be excited about writing the IRS an unexpected $25,000 check on 4/15/2027? No! So plan ahead accordingly!

*(This cliff could go away if Congress renews favorable ACA rules that have been in place the last 5 years.)

01/06/2026

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