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Renting a Home to a Relative

Jun 15, 2018, 10:00 AM

If you rent a home to a relative who (1) uses it as his or her principal residence (that is, not just as a second or vacation home) for the year, and (2) it is rented at fair rental rate (not at a discount), then no limitations apply. You can deduct all the normal rental expenses, even if they result in a rental loss for the year. If you have a loss, however, it is a "passive" loss, which may be subject to a different set of limitations.
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Casey Peterson, Ltd. wins Top Wealth Advisory Firm award.

Jun 5, 2018, 4:00 PM

Rapid City, SD, May 23, 2018 – Local CPA firm, Casey Peterson, Ltd. has been awarded the 2017 Top Wealth Advisory Firm from HK Financial Services (HKFS). Casey Peterson, Ltd. earned this award by helping clients with wealth management planning. Casey Peterson, Ltd. works closely with HKFS to provide independent and objective financial services to their clients. Congratulations, Casey Peterson, Ltd.
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Is your worker an independent contractor or employee?

May 29, 2018, 2:45 PM

The question of whether a worker is an independent contractor or employee for federal income and employment tax purposes is a complex one. It is intensely factual, and the stakes can be very high. If a worker is an employee, the company must withhold federal income and payroll taxes, pay the employer's share of FICA taxes on the wages plus FUTA tax, and often provide the worker with fringe benefits it makes available to other employees. There may be state tax obligations as well. These obligations do not apply for a worker who is an independent contractor. The business sends the independent contractor a Form 1099-MISC for the year showing the amount paid to the contractor (if the amount is $600 or more), and that is it. Who is an “employee?” There is no uniform definition of the term.
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IRS's Voluntary Classification Settlement Program for Misclassified Workers.

May 21, 2018, 10:45 AM

The IRS offers an employment tax settlement program called the Voluntary Classification Settlement Program (VCSP). This program allows employers to reclassify as employees those workers they have erroneously treated as independent contractors. The program has generous payment terms, and participants get relief from employment tax audits for previous years. Here are the details.
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Work Opportunity Credit

May 14, 2018, 12:45 PM

Employers can qualify for a tax credit known as the work opportunity tax credit that is worth as much as $2,400 for each eligible employee ($4,800, $5,600 and $9,600 for certain veterans and $9,000 for "long-term family assistance recipients"). The credit is generally limited to eligible employees who began work for the employer before Jan. 1, 2020. The credit, calculated as described below, is available on an elective basis for employers hiring individuals from one or more of nine targeted groups.
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Commuting Expenses to Temporary Job Locations.

May 9, 2018, 7:45 AM

Did you know that you can deduct "commuting" expenses between your home and temporary job locations? Daily transportation costs between your home and a regular work location are nondeductible commuting expenses. However, you may be able to deduct costs of going to and from your home and a temporary (not regular) job location.
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Tax Cuts and Jobs Act Puts $10,000 Aggregate Limit on State and Local Tax Deduction

Feb 21, 2018, 12:45 PM

The Tax Cuts and Jobs Act (TCJA) places new limits on individuals’ itemized deductions of non-business taxes. For tax years 2018 through 2025, the TCJA limits the aggregate deduction for state and local real property taxes; state and local personal property taxes, state and local, and foreign income, war profits, and excess profits taxes; and general sales taxes (if elected) for any tax year to $10,000 ($5,000 for married filing separately).
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Tax Reform: Whether home mortgage interest and home equity loan interest are deductible under the new law.

Feb 12, 2018, 8:00 AM

Under the pre-Act rules, you could deduct interest on up to a total of $1 million of mortgage debt used to acquire your principal residence and a second home, i.e., acquisition debt. For a married taxpayer filing separately, the limit was $500,000. You could also deduct interest on home equity debt, i.e., other debt secured by the qualifying homes. Qualifying home equity debt was limited to the lesser of $100,000 ($50,000 for a married taxpayer filing separately), or the taxpayer's equity in the home or homes (the excess of the value of the home over the acquisition debt). The funds obtained via a home equity loan did not have to be used to acquire or improve the homes. So you could use home equity debt to pay for education, travel, health care, etc.
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Tax Reform: New treatment of alimony under the new tax law.

Feb 8, 2018, 8:00 AM

The Tax Cuts and Jobs Act (the Act) has made changes to the tax treatment of alimony that you will be interested in. These changes take effect for divorce agreements and legal separation agreements executed after 2018. Current rules. Under the current rules, an individual who pays alimony or separate maintenance may deduct an amount equal to the alimony or separate maintenance payments paid during the year as an "above-the-line" deduction. (An "above-the-line" deduction, i.e., a deduction that a taxpayer need not itemize deductions to claim, is more valuable for the taxpayer than an itemized deduction.) And, under current rules, alimony and separate maintenance payments are taxable to the recipient spouse (includible in that spouse's gross income).
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