Do you want to jump start your child's retirement with a million dollar tax-free account?
Consider this.
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We Do Books™ Blog
Michael DiSabatino of We Do Books™ shares expert insights to help you unlock your business's full potential by delivering proven strategies for maximizing tax savings, streamlining operations, and driving sustainable growth.
The information provided on this site is for general informational purposes only and should not be construed as professional financial, tax, or legal advice. For advice tailored to your specific situation, we recommend consulting with a qualified professional. We Do Books is here to assist by calling 855-922-WeDo (9336)
The information provided on this site is for general informational purposes only and should not be construed as professional financial, tax, or legal advice. For advice tailored to your specific situation, we recommend consulting with a qualified professional. We Do Books is here to assist by calling 855-922-WeDo (9336)
Before taking action, talk to your tax adviser.
How many times have you seen this legal disclaimer?
Unfortunately, all too often taxpayers do not follow this advice and then must pay the price with an unnecessarily high tax bill.
Here are some of the most common situations that can save you money by seeking advice before you act:
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In late September, the Treasury Department presented a list of preliminarily-approved occupations that will qualify for the new federal tax-free tip income provision on 2025 tax returns.
Here is what you need to know.
Background
As part of the One Big Beautiful Bill Act (OBBBA), qualifying tip income will not be subject to federal income tax from 2025 through 2028. The benefit is limited to $25,000. There is an income limit of $150,000 for single filers and $300,000 for joint filers. (This income limit is modified adjusted gross income, including the tips.) The deduction amount is reduced (but not lower than zero) by $100 for each $1,000 in excess of these amounts.
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Fair market value (FMV) is the price that property would sell for on the open market. It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts.
Source: IRS Publication 561
This definition is the standard the IRS uses to determine if an item sold or donated by you is valued properly for income tax purposes. It's also a definition that's open to interpretation. If the IRS decides your FMV opinion is incorrect, you're not only subject to more taxes, but also penalties to boot.
Here are some tips to help defend your FMV in case of an audit.
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