Eliot Thomas and Jeff Webb of Anderson Advisors talk about how to maximize tax deductions for your home office and answer more of your tax questions. Submit your tax question to taxtuesday@andersonadvisors.

Highlights/Topics:

I have an S corporation. Can I institute a health reimbursement account (HRA) plan? Yes, you can have an HRA and an S Corp. The problem is that you cannot benefit 5% shareholders. An HRA can only be for the employees of the company.

Can a real estate professional status be claimed year to year with yearly gaps on any years that you may not qualify? Yes, this is an annual test. So, you must re-attain real estate professional status every year or possibly experience passive losses.

If I personally fund my small business, can I deduct all the monies I put into the business from my business taxes? It depends on the type of business and how it is structured. Basically, you are contributing money to your business. So, even if it's a pass through, if it's a corporation, it's not a deduction, but an investment.

What expenses can/must be kept/recorded in order to get tax reductions or deductions for a home office? All of them, including your utilities, water, trash removal, HOA fees, gas/electric power, property taxes, cleaning expenses, and mortgage interest. Keep any records around those items. Also, calculate for the depreciation to that area.

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Resources:

1031 Exchange

https://www.irs.gov/pub/irs-news/fs-08-18.pdf

26 US Code Section 721 Exchange

https://www.law.cornell.edu/uscode/text/26/721

Aggregation Election

https://www.eisneramper.com/irc-section-199a-aggregation-election-0919/

26 US Code Section 1244

https://www.law.cornell.edu/uscode/text/26/1244

Wash-Sale Rule

https://www.investopedia.com/terms/w/washsalerule.asp

Turo

https://turo.com/

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https://andersonadvisors.com/

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