For most married couples, filing jointly costs less, because filing separately shuts off the education credits and the student loan interest deduction and shrinks Roth IRA room. Filing separately can win in narrow cases: large medical bills on a lower…
The streamlined filing compliance procedures let a taxpayer whose failure to report foreign accounts was non-willful file three years of returns and six years of FBARs. If you meet the non-residency test the miscellaneous offshore penalty is nothing; if you…
The extended tax deadline of October 15, 2026 only moves the date to file your 2025 return. Tax owed was still due April 15, so interest, compounded daily at 6% and then 7%, and the 0.5% monthly late-payment penalty have…
A short-term rental averages seven days or less per guest stay, which takes it outside the passive rental rules. If you also materially participate, its loss may offset wages. A long-term rental is passive by default: losses generally offset only…
A foreign mutual fund is almost always a PFIC — 75% or more of its gross income is passive, or 50% or more of its assets are. Without a QEF or mark-to-market election, gain is taxed as ordinary income at…
Trader tax status is a facts-and-circumstances test: you must seek daily trading profits, substantially and with continuity. It moves your trading expenses to Schedule C. It does not lift the $3,000 capital loss cap or the wash sale rule —…
Choosing a business entity comes down to two questions. State law decides liability protection, and the IRS classification decides tax. Sole proprietors and partners pay self-employment tax on all profit, S corporation owners pay payroll tax only on a reasonable…
A partner who sells an interest has a gain equal to cash received plus debt relieved, less outside basis. Most of it is capital gain under section 741, but the share tied to receivables, inventory and recapture is ordinary under…
A SEP IRA gives a sole proprietor about 20% of net earnings from self-employment. A solo 401(k) gives the same 20% plus an elective deferral of up to $24,500 for 2026 — so it puts away more at every income…
A Roth conversion is taxed at your marginal rate, so the planning move is to convert only up to the top of the bracket you are already in. For 2026 the 12% band ends at $100,800 of taxable income on…
