Wolfgang Tax and Consulting Services, The Bronx, NY (2026)

01/28/2024

Deductions are expenses that lower your taxable income, thereby decreasing your tax liability.

Here are some tax deductions self employed individuals need to think about when filing taxes

1) Health Insurance

2) Premium Tax Credit for the self employed

3) Individuals and Related Care Tax Credit

4) Retirement saving plan tax breaks for the self-employed.

5) Internet and Phone bills

6) Vehicle Used

7) Business Travel and Meals

8)Start up costs

9) Home office

10) Continuing Education

11) Retirement Savings

12) Self-Employment Tax

And many more when you file with us.

Send us a message to book an appointment

01/20/2024

Hi,

It’s tax season. Here are some tips to think about.

The tax code spans approximately 75,000 pages. Wealthy individuals leverage every page to their advantage, and you should too.

Here are some tax-saving strategies that can potentially save you thousands of dollars or more:

1. Utilize the Agusta tax rule (Section 280A):
- Rent out your home for up to 14 days annually without incurring taxes on the rental income.
- If you own a business, consider renting your home to your business for activities like team retreats, parties, or meetings, reducing your taxable income and generating tax-free rental income.

2. Business Expenses:
- As a business owner, you can claim deductions unique to business ownership, including education, health insurance premiums, internet and phone bills, home office costs, vehicle expenses, advertising expenses, supply expenses, travel expenses, and theft losses.

3. Section 179 Tax Deductions:
- Business owners can write off the entire cost of a vehicle used for work if the vehicle's weight exceeds 6000 pounds and the cost does not surpass $1,080,000.

4. Employ Your Children:
- Business owners can hire their children, paying them up to $13,850 annually tax-free and deducting it from taxable income, provided the child is under 18.

5. Consider States with $0 State Income Tax:
- Several states, including New Hampshire, South Dakota, Washington, Tennessee, Wyoming, Nevada, Florida, Alaska, and Texas, have no state income tax.

6. Retire a Millionaire through Roth IRA:
- Roth IRAs provide tax-free growth, enabling investments to grow and compound faster. Contributions are made with after-tax dollars, allowing tax-free withdrawals.

7. Leverage S-Corp Tax Advantage:
- S Corporations can help reduce self-employment taxes by allowing business owners to take a reasonable salary from the company's profits, minimizing the 15.3% self-employment tax.

7a. S-Corp Strategy Example:
- For instance, if you are the sole shareholder of an S Corp earning $100,000 annually, taking a salary of $50,000 and distributions of $50,000 means you only pay payroll taxes on the $50,000 salary, potentially saving thousands in taxes.

Feel free to message us if you need us to file your tax and add apply all of these strategies to earn you the largest refund possible.

07/18/2023

Deduction #11: IRA Contribution’s Deduction

Traditional Individual Retirement accounts, also known as IRA are exempt from taxes until the day you want to withdraw your money, meaning you don’t pay taxes on your IRA gains until the day you want to withdraw and you may even be entitled to a tax deduction each year, though the Internal Revenue Service (IRS) restrict tax deductions based on various factors, including but not limited to income and filing status.

Usually everyone is eligible for contribution to a traditional IRA, but not everyone is eligible for a tax deduction for those contributions.

You are not eligible for an IRA tax deduction if you or your spouse

“

1) contributes to an employer-sponsored retirement plan, such as a 401(k) or 403(b), and

2) your Modified Adjusted Gross Income (MAGI) exceeds annual limits (TurboTax and NerdWallet)”.

There are more to IRA contribution Deduction than what’s written here. If you need additional support figuring your IRA contribution deduction, feel free to reach out to us, we’re alway here to help.

Best,

07/14/2023

Deduction #10: Gambling Loss Deduction

If you’re a gambler, chances are, you may be able to deduct some of your lost if you itemize. But here’s the catch: you can only deduct your gambling loss if you win.

If you win, you may be able to deduct your expenses, but you cannot deduct more than your wins.

Gambling loss deduction is a little tricky, so it’s best to seek the advice of tax expert before writing it off.

Let us know if you need support with your taxes, we’re always there to help.

Best,

07/13/2023

Deduction #9: Mortgage Interest Deduction

If you’re a home owner, chances are, you pay interest on your homes. If so, you can reduce your taxable income by the amount of interest you paid on your mortgage.

Simply put, you can the mortgage interest you paid on your home if it’s purchase before December 16, 2017.

Again, the mortgage interest deduction cannot be claim on the standard deduction. You must itemize in order to deduct the mortgage interest deduction.

Remember to keep good record in case of an audit.

Here’s a list of the IRS’s description of what qualified as a mortgage Interest according to IRS Publication 936 and NerdWallet:

“

1) The property can be a house, co-op, apartment, condo, mobile home, house trailer or a houseboat.

2) The home has to be collateral for the loan.

3) The home must have sleeping, cooking and toilet facilities to count.

4) If you get a nontaxable housing allowance from the military or through the ministry, you can still deduct your home mortgage interest.

5) A mortgage that you get in order to “buy out” your ex’s half of the house in a divorce counts. “

Remember to keep good record of all forms and other documents pertaining to the mortgage interests you’re paying on your home.

Best,

07/12/2023

Deduction #8: Medical Expense Deduction

If you’re human, chances are, you got sick at least once and spend a lot on your medical expenses.

Worry not, you’ll be able to deduct some of your medical bills as long as you itemize.

Eligible medical expenses include but not limited to the following

“

1) Payments of fees to doctors, dentists, surgeons, chiropractors, psychiatrists, psychologists, and nontraditional medical practitioners.

2) Payments for inpatient hospital care or residential nursing home care, if the availability of medical care is the principal reason for being in the nursing home, including the cost of meals and lodging charged by the hospital or nursing home. If the availability of medical care isn't the principal reason for residence in the nursing home, the deduction is limited to that part of the cost that's for medical care.

3) Payments for acupuncture treatments or inpatient treatment at a center for alcohol or drug addiction; or for participation in a smoking-cessation program and for drugs to alleviate ni****ne withdrawal that require a prescription.

4) Payments to participate in a weight-loss program for a specific disease or diseases diagnosed by a physician, including obesity, but not ordinarily payments for diet food items or the payment of health club dues.

5) Payments for insulin and for drugs that require a prescription for its use by an individual.

6) Payments made for admission and transportation to a medical conference relating to a chronic illness of you, your spouse, or your dependent (if the costs are primarily for and essential to necessary medical care). However, you may not deduct the costs for meals and lodging while attending the medical conference.

7) Payments for false teeth, reading or prescription eyeglasses, contact lenses, hearing aids, crutches, wheelchairs, and for a guide dog or other service animal to assist a visually impaired or hearing disabled person, or a person with other physical disabilities.”

If you have further questions or need support figuring out whether your expense is eligible, feel free to contact us, we’ll be glad to help.

Best,

07/11/2023

Deduction # 7: Charitable donations deduction

Are you one of those individuals who always gives? Do you donate to your church or community?

If so, you may be able to deduct up to 60% of your adjusted gross income in charitable donations.

“ To qualify, the contribution must be:

1) a cash contribution;

2) made to a qualifying organization;

3) made during the calendar year 2020 [ or the year for which you’re filing your tax]”

Section 170(c) of the Internal Revenue Code defined “qualifying Organizations” as follows:

“

1) A state or United States possession (or political subdivision thereof), or the United States or the District of Columbia, if made exclusively for public purposes;

2) A community chest, corporation, trust, fund, or foundation, organized or created in the United States or its possessions, or under the laws of the United States, any state, the District of Columbia or any possession of the United States, and organized and operated exclusively for charitable, religious, educational, scientific, or literary purposes, or for the prevention of cruelty to children or animals;

3) A church, synagogue, or other religious organization;

4) A war veterans' organization or its post, auxiliary, trust, or foundation organized in the United States or its possessions;

5) A nonprofit volunteer fire company;

6) A civil defense organization created under federal, state, or local law (this includes unreimbursed expenses of civil defense volunteers that are directly connected with and solely attributable to their volunteer services);

7) A domestic fraternal society, operating under the lodge system, but only if the contribution is to be used exclusively for charitable purposes;

8) A nonprofit cemetery company if the funds are irrevocably dedicated to the perpetual care of the cemetery as a whole and not a particular lot or mausoleum crypt.”

Your charity must be made before the close of the previous year in order to be eligible for deduction.

Note: non-cash contributions are not deductible.

Best,

07/10/2023

Deduction #6: Earned Income Tax Credit

Are you a low income worker? If so, you maybe eligible for the earned income tax credit?

The earned income tax credit provides you with a tax break if you earned below a specific amount set by the IRS. The amount for the earned income tax credit ranges from $560 to $6935 and varies every year based on your filing status.

You must be working to claim the earned income credit. Unemployed individuals are not eligible for the earned income credit.

You may be eligible for the earned income tax credit if you meet the criteria listed below as per the IRS and Nerdwallet:

“

1) Your investment income must have been $10,300 or less in 2022. In 2023, it can't exceed $11,000.

2) You must have at least $1 of earned income (pensions and unemployment don't count).

3) You must not have to file Form 2555, Foreign Earned Income; or Form 2555-EZ, Foreign Earned Income Exclusion.

4) If you're claiming the EITC without any qualifying children, you must be at least 25 years old, but not older than 65. If you're claiming jointly without a child, only one spouse needs to meet the age requirement.

5) You can qualify for the EITC if you’re separated but still married. To do so, you can’t file a joint tax return and your child must live with you for more than half the year.

6) You also must not have lived with your spouse during the last six months, or you must have a separation agreement or decree.

7) There are special earned income credit rules for members of the military and the clergy, as well as for people who have disability income or who have children with disabilities.”

Again, we’re here to help if you need support determining your eligibility for the earned income credit. Just message us.

07/09/2023

Deduction #5: Adoption Credit

Have you adopted a child? If so, you may be eligible for the adoption credit.

The adoption credit allows you to deduct up to $14,890 per child from your taxable income as defined in section 21(d)(1) of the tax code.

Here are some of the expenses you can deduct from you taxable income as per the IRS section 21(d)(1) and the IRS website:

“
1) Reasonable and necessary adoption fees,

2) Court costs and attorney fees,

3) Traveling expenses (including amounts spent for meals and lodging while away from home), and

4) Other expenses that are directly related to and for the principal purpose of the legal adoption of an eligible child.

An expense may be a qualified adoption expense even if the expense is paid before an eligible child has been identified. For example, prospective adoptive parents who pay for a home study at the outset of an adoption effort may treat the fees as qualified adoption expenses.”

Adopting a child is huge responsibility and you deserve to be rewarded for your hard work, and as such, you must claim this credit.

If you need help figuring out whether or not you’re eligible for the adoption, feel free to message us right now. We’re always here to help.

Wolfgang Tax and Consulting Services

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