Taylor, Miles & Associates, P.A.

06/18/2026

Your business may have a valuable opportunity to claim larger deductions or refunds for research and experimentation (R&E) expenses.

Starting in 2022, businesses had to amortize domestic R&E costs over five years rather than deducting them immediately. This rule created cash-flow problems for many businesses that developed new products, improved processes, wrote custom software, or conducted experiments to advance their operations.

Recent tax law changes now restore more favorable treatment of domestic research expenses, effective in 2025. In many cases, you may deduct these costs in full in the year you pay or incur them. (Foreign research expenses still generally must be amortized over 15 years.)

The new rules may also help you recover deductions from 2022, 2023, and 2024. Depending on your situation, you may have several options.

You may choose to retain prior-year costs on their existing amortization schedule and use the new full-expensing rules from now on. This approach is simple but may delay tax benefits.

Alternatively, you may deduct your remaining unamortized 2022-2024 domestic research expenses in 2025, or split the deduction between 2025 and 2026. This option may provide a significant current deduction.

Certain small businesses may have a third option: amending 2022, 2023, and 2024 returns to claim full deductions retroactively. This option may generate refunds, but it comes with strict deadlines—generally the earlier of July 6, 2026, or the expiration of the statute of limitations for the affected return. If a year is already closed, this option may produce unfavorable results.

The best path depends on your business size, filing history, income, and prior research deductions as well as whether you claimed research credits.

06/04/2026

Donating non-cash property to charity can provide a valuable tax deduction. In many cases, you may deduct the property’s fair market value on the date of the donation. However, the IRS closely scrutinizes these deductions because of past abuses involving inflated valuations.

If you claim a charitable deduction of more than $5,000 for a single item—or for multiple similar items of property—you must comply with strict IRS substantiation rules. Failure to follow these rules can cause the IRS to completely deny your deduction, even if the donation itself was legitimate.

To protect your deduction, you generally must complete three steps:

1. Obtain a written acknowledgment from the charity describing the donated property and confirming whether you received anything in return.
2. Obtain a qualified appraisal from an independent qualified appraiser.
3. File IRS Form 8283 with your tax return, including signatures from both the appraiser and the charity.

The appraisal requirement often creates the most problems. The appraisal must be completed no earlier than 60 days before the donation and no later than the due date of your tax return, including extensions. You cannot use an old appraisal or an insurance appraisal.

The appraiser must have appropriate education and experience valuing the specific type of property involved and must regularly perform paid appraisals. The appraiser also must remain independent.

Importantly, these appraisal rules also apply to digital assets such as Bitcoin and other cryptocurrencies, even though they trade on public exchanges.

The IRS may impose substantial penalties for inflated appraisals, including penalties of 20 percent of the resulting tax underpayment, or even 40 percent in serious cases.

05/26/2026

Here’s a valuable tax strategy, commonly known as the Augusta rule, that can help you generate tax-free income while claiming a legitimate business deduction.

If you own a business structured as an S corporation, a C corporation, or a partnership, you may rent your personal residence to your business for up to 14 days per year. When this is done correctly, the results are highly favorable: your business deducts the full rental expense while you personally receive the rental income tax-free.

For example, if your home rents for $1,500 per day and your business rents it for 14 days, your business can claim a $21,000 deduction. That deduction reduces business income, and in the case of an S corporation or a partnership, it reduces income that flows through to you.

On your personal tax return, you report the $21,000 as taxable income, then subtract it under the 14-day rule, so your net result is zero tax on the $21,000.

While tax law supports this strategy, proper ex*****on is critical. You must follow several key rules, including:

• Rent for a business purpose. The rental must be for legitimate business use, such as meetings, planning sessions, or employee events.
• Avoid entertainment use. Most entertainment expenses are not deductible, so the rental should not be for entertainment purposes.
• Charge fair market rent. You must charge a reasonable rental rate supported by documentation, such as comparable market data or an appraisal.
• Document the business activities. Keep detailed records of meeting agendas, attendees, and business activities to substantiate the deduction.

Failure to meet these requirements—particularly proving fair rental value and business use—can result in the IRS disallowing the entire deduction.
**Consult with your CPA before taking advantage of this tax strategy.

05/18/2026

Has the time come for you to dissolve or leave a partnership? Below are 3 different scenarios that may fit your situation. Always meet with your CPA before making any decisions.

As you consider winding down your partnership, here’s a concise overview of what you might expect under three typical scenarios of partnership dissolution.

Scenario 1: One Partner Buys Out the Others

If one partner buys out the others and continues the business, the exiting partners will likely recognize a capital gain or loss on the sale of their partnership interests. For the remaining partner, the assets acquired become the basis for their new business structure, whether that continues as a sole proprietorship or a different entity form.

Scenario 2: Partnership Liquidation with Asset Sale

Should the partnership decide to liquidate by selling all assets and distributing cash, each partner must report their share of any gains or losses passed through on Schedule K-1. It’s essential to consider how these gains might be taxed, whether as long-term capital gains or ordinary income, depending on the asset type and the depreciation recapture rules.

Scenario 3: Partnership Distributes All Assets to Partners

The most complex scenario involves the partnership distributing all assets directly to the partners. This approach can lead to varied tax outcomes based on the type of assets distributed and each partner’s basis in the partnership. Gains may arise if the distribution includes “hot assets” such as appreciated inventory or receivables.

General Considerations

• Tax forms. Regardless of the scenario, you must file a final partnership tax return (IRS Form 1065) and issue a final Schedule K-1 to each partner.
• State taxes. Be aware of any state tax obligations that might arise from these transactions.
• Passive losses. When you liquidate the partnership, any suspended passive losses may become deductible.

Next Steps

Given the complexity of these scenarios, especially with variations in asset distribution and individual partner circumstances, I strongly advise scheduling a consultation with us. We can provide a detailed analysis tailored to your situation to ensure you manage the dissolution process as efficiently as possible while minimizing your tax liabilities.

05/07/2026

Our firm has seen an influx of clients receiving IRS letters, so we wanted to address some of the common concerns we are seeing.
It is important to note that the IRS announced on March 25, 2025, that they would start phasing out issuing paper checks. According to the executive order the phase out process started September 30, 2025.

The IRS letter CP53E that is currently being issued by the IRS is directly connected to the phaseout of paper refund checks. This notice is a legitimate correspondence from the IRS, and you should not ignore it. If you do not respond to this IRS letter, there may be a delay in receiving your refund (6 weeks or longer). You cannot call the IRS to update banking information; you must do that within your online account.

The IRS letter CP5071 or 5071C is a legitimate letter also. This correspondence is to confirm your identity and that you did in fact file the return. The fastest and safest way to respond is by going to your online account or going to the website IRS.gov/verifyreturn. If you fail to respond to this notice the IRS will not process your return or issue your refund.

For both correspondences it is recommended that you create an account with the IRS on their website IRS.gov, so that you can check your account directly and avoid scams.

For more information on this topic and much more please visit the IRS website IRS.gov.
https://www.irs.gov/individuals/understanding-your-cp53e-notice
https://www.irs.gov/individuals/understanding-your-cp5071-series-notice

You got a CP5071, 5071C or CP5071F because a tax return was filed under your Social Security number (SSN) or individual tax identification number (ITIN). Verify your return to prevent identity theft.

04/21/2026

Many business owners overlook a powerful strategy that allows them to pay family members, reduce taxes, and avoid payroll taxes altogether.

You likely know the traditional approach: hire your child and put them on payroll. That strategy works well for younger children in a sole proprietorship. But once your child turns 18—or if you operate as a corporation—payroll taxes usually apply.

In the right situation, a lesser-known alternative offers a better outcome.

You can hire a family member for a “one-time project” instead of ongoing work. This structure allows you to deduct the payment at your higher tax rate while your family member reports the income at a much lower rate—often with little or no tax liability.

For example, you might pay your college-age child to design a website, create marketing materials, or complete a facility upgrade. If you structure the work as a true one-time project—not a continuous or recurring one—the income avoids employee status and thus payroll taxes for both you and the child. It also avoids 1099 independent contractor status and thus self-employment taxes for the child.

This approach can generate meaningful savings. In one scenario, a $23,225 payment produced over $7,800 in net family tax savings.

To make this strategy work, you must follow several key rules:

• Define a clear, one-time project with a specific scope.
• Pay a reasonable, fixed amount upon completion of the project.
• Avoid hourly wages or ongoing tasks.
• Maintain simple documentation and proof of completion.
• Ensure the arrangement supports proper worker classification.

This strategy depends heavily on proper structure and ex*****on. If you treat the work as ongoing employment, you risk having your child or other family member classified as an employee or a 1099 independent contractor.

When done correctly, this approach efficiently shifts income, minimizes taxes, and keeps compliance simple.

**Always consult with your CPA.

04/04/2026

Wishing peace, love and happiness and a blessed Easter weekend from our TMA family to yours. He is Risen 💛

03/27/2026

South Carolina Department of Revenue (SCDOR) has extended the tax filing date April 15th, 2026, until October 15th, 2026. Here is what you need to know and exactly what this means.
-You do not need to do anything to get the extension, it is automatic for the state of South Carolina.
-This extension of time to file your return is ONLY for the state of South Carolina. This does not include your federal return or other states. If you need to file with another state, you will need to see what changes, if any that state has made individually.
-This extension of time is for filling your return, it DOES NOT extend your time to pay. You will need to pay at least 90% of your tax liability by April 15th. You can easily make your payment on MyDORWAY by visiting their website dor.sc.gov/pay and select individual income tax payment.
-SCDOR will provide additional information when available, including guidance for individuals who have already filed their state return.
-SCDOR will publish additional guidance and updates on their website and social media.
-If you do not have a tax liability for 2025 and expect a refund you do not need to do anything except file your return by October 15th.
Please be mindful of the information shared across different social media platforms by individuals, as information can be misconstrued.
SC.GOV website
https://dor.sc.gov/news/scdor-statement-income-tax-conformity-april-15-filing-deadline-extended-sc-returns
MyDORWAY website
https://dor.sc.gov/mydorway

03/19/2026

Here’s an idea: how about transforming your next vacation into business travel?

With careful planning, your transportation to any destination could be fully deductible. This includes airfare—even first-class—luxury hotel stays, and cruise expenses. If you can tie your travel to business purposes, you can enjoy substantial tax savings, depending on your tax bracket.

Two Main Types of Deductible Expenses

Transportation. If your trip within the U.S. primarily serves business purposes, you can deduct 100 percent of your transportation costs. But if the trip is mainly personal, you cannot deduct transportation.

Living expenses. While on a business trip, you can deduct lodging and meal costs on your business days but not on personal days.

Five Essential Rules for Deductibility

To ensure your travel expenses qualify as business deductions, consider these guidelines:

• Profit motive. You should expect the trip to contribute to your business’s profitability.
• Overnight stay. Only trips that require you to stay overnight qualify.
• “For only” test. Ask yourself if a rational businessperson would undertake the trip solely for business reasons.
• Primary purpose test. The primary reason for your travel must be business-related, with the majority of your days spent on business activities.
• Record-keeping. Documenting your trip’s business purpose, expenses, and activities is crucial.

Real-Life Success Stories

Numerous taxpayers have successfully deducted their travel expenses by adhering to these principles. For instance, corporate meetings held in attractive locations with substantial business discussions and activities have been fully deductible. Similarly, traveling to expand business operations or attending conventions relevant to your business qualify.

Avoid Common Pitfalls

However, trips primarily for entertainment or lacking a clear business purpose have led to denied deductions. Establishing and documenting a legitimate business rationale for your travel is essential.

Take Action

Before planning your next trip, consider how you might integrate business purposes. Whether you are attending a seminar relevant to your industry or meeting with potential clients, these activities could significantly reduce travel costs through tax deductions.

02/25/2026

It's that time of year to vote for best accountant and best accounting firm! Both of our CPA's, Lori Miles and Dawn Mayers were nominated for best accountant, and Taylor, Miles & Associates, P.A. was nominated for best accounting firm. Please vote daily to help support our CPA's and our firm. You can vote by clicking on the link below or go to the Summerville Journal Scene website.

https://www.postandcourier.com/journal-scene/readerschoice/ #/gallery?group=538695