Think Outside the Tax Box

College tuition continues to climb, and for many families, financial aid can make or break their ability to afford their child’s higher education dreams. What most don’t realize is that their tax return — filed long before students even begin applying for college — plays a major role in determining how much financial aid they’ll receive. This is where you come in. Tax professionals and financial planners are uniquely positioned to help clients qualify for more college financial aid. But only if you know what to look for. Listen in to learn more!This podcast is meant for entertainment purposes only. For the more thorough, complete, and accurately written version of this article which includes citations, visit us at http://www.tottb.tax

Tax rules are generally designed with a purpose in mind. Most rules serve to define the tax base and tax rates. Many others serve to serve a behavioral purpose to encourage or discourage certain activities. The focus of this podcast stems from tax rules that are a combination of favoring certain activity such as generation of capital gains, and a limitation on such gains for certain taxpayers, such as the so-called “hot assets” rule for partners under IRC Section 751, Unrealized Receivables and Inventory Items. While Section 751 has been in the tax law for decades, a new application of it was raised by both the IRS and California FTB. This podcast summarizes Rawat, TC Memo 2023-14, rev’d, No. 23-1142 (DC Cir., 2024), and FTB Legal Ruling 2022-02, and offers observations on their relevance to tax research and practice.This podcast is meant for entertainment purposes only. For the more thorough, complete, and accurately written version of this article which includes citations, visit us at http://www.tottb.tax

Looking to cut down on self-employment taxes on your partnership income? Converting your partnership into an S corporation might be the answer.If you currently run your business as a partnership or an LLC taxed as a partnership, you’re probably familiar with the sting of self-employment taxes. Unlike shareholder-employees of an S corporation, who only pay Social Security and Medicare taxes on their salaries, partners typically get hit with self-employment taxes on their entire share of the business’s net income. That can add up fast.By transitioning to an S corporation, you can restructure how you take your income—splitting it between salary and profit distributions. The big advantage? Those profit distributions are not subject to self-employment tax, potentially saving you thousands each year.So, if reducing your tax burden sounds appealing, listen in as we break down how a tax-free Section 351 incorporation works and what you need to know before making the move.This podcast is meant for entertainment purposes only. For the more thorough, complete, and accurately written version of this article which includes citations, visit us at http://www.tottb.tax

With the rising cost of higher education and greater reliance on student loans, taxpayers are looking for every opportunity to ease the financial burden of earning a degree. Fortunately, several higher education tax benefits are available to help offset the high cost of tuition, student loans and other education-related expenses. However, certain eligibility requirements — such as income limits and tax filing status — often trip up taxpayers along the way. Understanding the nuances of these tax benefits for higher education can ensure your clients take full advantage of available tax savings. Listen in to learn more!This podcast is meant for entertainment purposes only. For the more thorough, complete, and accurately written version of this article which includes citations, visit us at http://www.tottb.tax

The IRS is ramping up scrutiny of high-net-worth individuals and businesses, increasing audit rates by over 50% for those earning above $10 million. Recent IRS initiatives backed by Inflation Reduction Act funding have intensified enforcement on wealthy taxpayers, large partnerships, real estate investors, and tech businesses. IRS agents are digging deeper during audits and expecting taxpayers to produce more documentation to support every position on their returns. To help clients navigate this environment, tax planners must take proactive steps to bolster documentation and audit readiness.Listen in as we go over ten authoritative strategies, complete with industry examples, IRS policy references, and best practices, to prepare for the increased IRS focus on documentation!This podcast is meant for entertainment purposes only. For the more thorough, complete, and accurately written version of this article which includes citations, visit us at http://www.tottb.tax

Late afternoon on the Friday before New Year’s Eve, the Treasury released another 115 pages of Digital Asset Regulations, along with a 13 page notice for good measure. As we’ve discussed previously on TOTTB, the last set of regs punted on a number of more complex crypto issues. This most recent release is all about one of those issues, Decentralized Finance, better known as “DeFi.” What is DeFi? What is CeFi? What does all this mean for tax planning? Listen in as we break it all down in this latest episode.This podcast is meant for entertainment purposes only. For the more thorough, complete, and accurately written version of this article which includes citations, visit us at http://www.tottb.tax

Historic buildings make a beautiful location for doing business. Unfortunately, many of them may seem out of the price range of small business owners. But, that’s not necessarily the case! The state and federal governments have an interest in preserving these properties, and they are willing to give you tax credits for buying and restoring a historic building. Listen in to learn how you can help your clients with this great tax benefit!This podcast is meant for entertainment purposes only. For the more thorough, complete, and accurately written version of this article which includes citations, visit us at http://www.tottb.tax

Is student loan forgiveness taxable? Yes. No. Maybe. Sometimes. It primarily depends on the student loan forgiveness program. But like everything else with student loans, there are a number of other factors at play. Why make it easy when you can thoroughly confuse taxpayers, federal student loan servicers and financial planners for years to come? Listen in to learn when student loan forgiveness might be tax-free and how to prepare your clients for taxable loan forgiveness.This podcast is meant for entertainment purposes only. For the more thorough, complete, and accurately written version of this article which includes citations, visit us at http://www.tottb.tax

There are a few tax rules new for 2025 that may catch some individuals and their tax advisers by surprise. These changes have not received lots of attention either because they are overshadowed by related changes that are more significant, or they were enacted a few years back with a future effective date that arrives in 2025. This article covers changes for 2025 that you will want to be sure to share with clients to avoid surprises at a later date.From the article by Annette Nellen, CPA, CGMA, Esq. posted on 01-15-25.This podcast is meant for entertainment purposes only. For the more thorough, complete, and accurately written version of this article which includes citations, visit us at http://www.tottb.tax

There are roughly 42.7 million federal student loan borrowers as of Q4 2024, creating an opportunity to provide additional insight to your clients beyond tax preparation. By leveraging certain tax and repayment strategies, you can help your clients reduce their tax liability and lower their student loan payments in one strategic swoop. Listen in to learn how...Created from the Caitlin See, MPA article posted 12-15-24This podcast is meant for entertainment purposes only. For the more thorough, complete, and accurately written version of this article which includes citations, visit us at http://www.tottb.tax