When we think of taxes, we often think of income taxes. But for business owners, they also have to contend with payroll and/or self-employment taxes. These other taxes can be substantial for businesses and their owners. This is why Congres and taxpayers have devised several ways to avoid these taxes. The rules are nuanced enough… The post Limited Partners May be Subject to Self-Employment Tax appeared first on Houston Tax AttorneysMitchell Tax Law ..read more

While many taxpayers want to pay less in tax and there are legitimate ways to do so, some of the tax planning concepts that are frequently discussed miss the mark. The so-called Augusta rule is often one of them. Tax planners often cite this rule and provide tax savings estimates based on unreasonable assumptions. This… The post The Limited Augusta Rule for Self-Rentals appeared first on Houston Tax AttorneysMitchell Tax Law ..read more

Programs involving third-party vendors providing rewards, like hotels, airlines, and fuel companies, can amass substantial value over time. The term “substantial” is an understatement. “Massive” is more fitting. The tax law for these arrangements is not clear as it touches on concepts like trust funds, accounting methods, and redemption deductions. Given the size of the… The post Court Clarifies Tax Treatment of Loyalty Programs appeared first on Houston Tax AttorneysMitchell Tax Law ..read more

Many believe that once you elect an entity’s tax classification, you are locked into that choice for at least 5 years. Conventional wisdom says that the tax status cannot be changed within a 5-year or 60-month period. However, a recent IRS private letter ruling shows this is not necessarily the case. In PLR 202341001, the… The post Forget the 5-Year Rule – Change Entity Classification Early appeared first on Houston Tax AttorneysMitchell Tax Law ..read more

There have been several lawsuits filed against the IRS for unlawful disclosure of taxpayer information. These include a suit filed by President Biden’s son, a lawsuit filed by the IRS against IRS contractor Charles Edward Littlejohn for leaking taxpayer information to news outlets–which apparently included former President Trump’s tax returns and returns for many other… The post Think Twice Before Handing Records to the IRS appeared first on Houston Tax AttorneysMitchell Tax Law ..read more

Many people have experienced the pain of an investment gone wrong. You put money into a business, loan funds to a friend, or participate in a real estate venture, expecting strong returns. But instead of profits, you end up suffering losses when the deal unravels. It leaves you wondering – can I at least deduct… The post Breach of Contract as Theft Loss Tax Deduction appeared first on Houston Tax AttorneysMitchell Tax Law ..read more

Payroll taxes kill businesses. It is very easy to get behind, whether the business owner uses the funds to pay other expenses or due to a mistake. Once there is a payroll tax balance, it can be very difficult to catch up. The penalties and interest compound the problem. If you’re a business owner and… The post Start a New Business to Avoid Old Taxes appeared first on Houston Tax AttorneysMitchell Tax Law ..read more

Tax attorneys frequently come from an accounting background. This may seem like an unrelated skill, but it often plays a pivotal role in effective tax planning. The ability to navigate revenue and expenses and debits and credits not only ensures accurate financial reporting but also lays the foundation for strategic tax planning. Tax planning often… The post Accounting for Interest Deductions as a Tax Planning Option appeared first on Houston Tax AttorneysMitchell Tax Law ..read more

The concept of “judicial activism” refers to situations where judges do more than simply interpret existing laws. They venture into creating new laws or policies through their rulings. This encroaches on the legislative power of Congress, which creates the laws, and the executive agencies, which create policies to implement the law. This type of discretion… The post Avoid Late IRS Installment Agreements appeared first on Houston Tax AttorneysMitchell Tax Law ..read more

Our legal system allows people to move on from past obligations under certain circumstances. For example, people can discharge debts through bankruptcy, creditors have a limited amount of time to sue for unpaid debts, and even the IRS allows a fresh start for unpaid taxes. These laws strike a balance between allowing those who are… The post Can You Still Owe Taxes on a Loan That’s 10 Years Old? appeared first on Houston Tax AttorneysMitchell Tax Law ..read more