Passelli Accounting Services, LLC

10/27/2026

Royal Palm Beach, Wellington, and Loxahatchee Tax Payers - Tax-loss harvesting season is here, and this is the rule people get wrong most often.

The idea is sound: sell a position at a loss, use the loss against gains, and keep your portfolio roughly where you want it. Losses offset capital gains without limit, then up to $3,000 of ordinary income, with the rest carrying forward indefinitely.

The wash sale rule disallows the loss if you buy a substantially identical security within 30 days — and that's 30 days before the sale as well as 30 days after. A 61-day window with the sale in the middle. Buying a position in early December and selling a different lot of it at a loss two weeks later can trip it.

Two details that cause real problems:

It crosses accounts. A purchase in your IRA, or in a spouse's account, can disallow a loss taken in your taxable account. Automatic dividend reinvestment is a frequent and invisible culprit.

A disallowed loss isn't gone — it's added to the basis of the replacement shares. But it's deferred, which defeats the point of the harvest.

One more thing: as the law currently stands, the wash sale rule applies to securities and not to digital assets, though legislation to change that has been proposed. Worth confirming before relying on it.

10/26/2026

https://www.youtube.com/watch?v=Z1Mb1Ggi6E0

Florida Amendment 3 is on the ballot November 3, 2026, and it needs...

10/26/2026

Royal Palm Beach, Wellington, and Loxahatchee Tax Payers - Reasonable compensation is among the most frequently examined S corporation issues, and it's one of the few you cannot fix after December 31.

The structure is familiar. An S corporation owner who works in the business takes part of the profit as W-2 wages, subject to payroll tax, and the rest as a distribution, which isn't. The incentive to keep the salary low is obvious, which is exactly why it draws attention.

What the IRS weighs: your duties and time, your training and experience, what comparable businesses pay for comparable work, and the relationship between compensation and distributions. There's no safe percentage. The 60/40 and 50/50 rules of thumb circulating online are not law.

The timing issue is what matters right now. Wages have to run through payroll, with withholding and a W-2. You can't retroactively characterize a December distribution as salary when you prepare the return in March. If the salary for 2026 is too low, the remaining payroll runs are where it gets corrected.

If reclassified, the exposure is employment taxes, penalties and interest — and it tends to open the earlier years too.

Two minutes with your year-to-date payroll report will tell you whether this is a conversation.

10/25/2026

Royal Palm Beach, Wellington, and Loxahatchee Tax Payers - A Roth conversion is one of the few tax moves where the timing matters as much as the decision, and the window is open now.

The idea is simple: move money from a traditional IRA to a Roth, pay tax on it at today's rate, and never pay tax on it again. It makes sense when your current rate is lower than the rate you expect later.

Why Q4: you can finally see the year. By October you know roughly what your income is, which means you can convert a specific amount — enough to fill the bracket you're in without spilling into the next one. In January you're guessing.

Who should look hardest: anyone in a gap year. Retired but not yet taking Social Security, between jobs, a business that had an off year, or the window after retirement and before RMDs begin. Those years don't come back.

The complications that need checking first:

Conversion income raises AGI, which can trigger IRMAA surcharges two years later, push you over the ACA subsidy cliff, or phase out the senior deduction. Converting pre-tax IRA money when you also have after-tax basis invokes the pro-rata rule. And paying the tax from the IRA itself defeats much of the benefit.

This is a modeling exercise, not a rule of thumb.

10/24/2026

Royal Palm Beach, Wellington, and Loxahatchee Tax Payers - If you're taking required minimum distributions and you give to charity, the order of operations changes the tax.

The common approach: take the RMD, deposit it, then write a check to charity and deduct it. The problem is that the distribution lands in your adjusted gross income first. You may get a deduction back, but only if you itemize — and now only to the extent your giving clears the new 0.5% of AGI floor.

The alternative is a qualified charitable distribution. The custodian sends the money directly from the IRA to the charity. It satisfies your RMD, and it never enters AGI at all.

That distinction is the whole point. AGI drives Medicare IRMAA surcharges, the taxable portion of Social Security, the new senior deduction phase-out, and the ACA premium tax credit for anyone not yet on Medicare. Keeping $20,000 out of AGI protects all of those simultaneously. A deduction does not.

The mechanics that trip people: the funds must go directly from custodian to charity, the recipient must be a qualifying public charity — donor-advised funds don't count — and you need the acknowledgment letter.

RMDs are due December 31. Custodians get slow in late December, so this is a November conversation.

10/23/2026

Royal Palm Beach, Wellington, and Loxahatchee Tax Payers - This is the misclassification conversation, and year-end is when it gets expensive.

Whether a worker is an employee or an independent contractor is determined by the relationship, not by the form you issue or the agreement you both signed. The IRS looks at three categories of evidence:

Behavioral control — do you direct when, where and how the work gets done? Financial control — who supplies tools, who can realize a profit or loss, is the worker available to the market? Relationship — are there benefits, is the arrangement ongoing, is the work core to your business?

No single factor decides it, and a signed independent contractor agreement doesn't settle it.

Why it matters: if a worker is reclassified, the exposure includes the employer share of F**A, federal unemployment tax, withholding that should have been collected, and penalties. For a business with several workers in the same role, it multiplies.

Two things to do before year-end. Review anyone who has been on a 1099 for an extended period doing work that looks like a core function. And if you have real doubt, understand that voluntary correction programs generally offer better outcomes than being found out.

A worker who looks like an employee to everyone except your bookkeeping is the one to look at first.

10/19/2026

https://fredpassellicpa.substack.com/p/when-to-meet-with-your-cpa-and-what?utm_campaign=post&utm_medium=web

April is when your return gets filed. October and November are when it actually gets decided. Here’s the calendar, and the agenda, that turns tax season from a report card into a plan.

10/18/2026

https://youtu.be/HCO5LkRBe-c?is=3u-3bcXUHSAwd7W_

What is a cost segregation study — and why are real estate investor...

10/15/2026

Royal Palm Beach, Wellington, and Loxahatchee Taxpayers -

The new deduction allows up to $10,000 a year of interest on a loan used to buy a qualifying personal-use vehicle, and you don't have to itemize to claim it.

The qualifications are where it narrows:

The vehicle must be new — used purchases don't qualify. The loan must be secured by the vehicle. The use must be personal rather than business. And the vehicle must have undergone final assembly in the United States, which is a fact about the specific vehicle rather than the brand. Plenty of foreign nameplates qualify and plenty of domestic ones don't.

Check the VIN before you sign, not after.

The timing point most people miss: auto loan interest is front-loaded. You pay far more of it in years one and two than in years four and five. The deduction runs through 2028, so a vehicle financed in 2026 captures it during the highest-interest years of the loan. One financed in 2028 largely won't.

The deduction also phases out at higher income levels, so it isn't universal.

If a vehicle purchase was already on the horizon, the assembly location and the timing are both worth confirming first.