Today's Tax Strategy Pulse
Grantor Trust Distributions Shift Tax Burden to Beneficiaries
A 67‑year‑old grantor runs a revocable trust that generates roughly $300,000 of income each year. By distributing that income annually, the trust can claim a deduction on Form 1041, moving the tax liability to the children’s personal returns, while capital gains may still be taxed at the trust level.
Washington Vs. California: A Tax Comparison for Founders and Investors
Washington’s new ESSB 6346 law, effective 2028, imposes a 9.9% income tax on household income above $1 million, ending its zero‑tax reputation for high earners. California still taxes all income at a progressive rate topping 13.3%, including wages, capital gains and QSBS gains. The structural differences mean Washington’s effective rate can be as low as 3.3% for a $1.5 million earner, while California’s blended rate exceeds 11%. Key divergences also exist in QSBS treatment, capital‑gains taxation, real‑estate gains, and estate taxes.
Washington's New Income Tax and Pass-Through Business Income: S-Corps, LLCs, and Partnerships
Washington enacted a 9.9% state income tax (ESSB 6346) that applies to individuals, including income passed through from S‑corporations, LLCs, and partnerships. The law permits pass‑through entities to elect to pay the tax at the entity level, converting the state...
Fidelity Flags the Roth IRA Loophole High Earners Need
Fidelity outlines a backdoor Roth IRA conversion that lets high‑income earners bypass the IRS’s contribution limits. For 2025, direct Roth contributions phase out above $150,000 (single) and $236,000 (joint), but the two‑step process—nondeductible traditional IRA contribution followed by a swift...
Washington's New Income Tax: The Marriage Penalty Explained
Washington’s new 9.9% state income tax provides a $1 million standard deduction per household, not per individual. Consequently, married or domestic‑partner couples share a single deduction, creating a marriage penalty that can reach $99,000 annually for comparable earners. The penalty also...
Washington's New Income Tax and Remote Workers: Who Owes What?
Washington will launch a 9.9% personal income tax on Jan. 1, 2028, using a dual‑track residency test that hinges on domicile and physical presence. Residents—defined by domicile or a 183‑day presence test—must allocate all income to the state, subject to a...
Tax‑aware Timing Crucial when Bonus and Equity Vest Together
Stack a big bonus + equity vest in the same year and watch how fast taxes eat into decisions you didn’t plan. Most people aren't just asking about returns, they are asking about better tax-aware timing.
Disability Trust Deduction Stumbles Over Obsolete Cross‑References
Qualified Disability Trusts get a $5,300 deduction in 2026 under §642(b)(2)(C)(i), tied to §151(d). But both provisions rely on outdated cross-references to former §68(b)—repealed and replaced by OB3/OBBBA—raising questions about how these rules apply today.
How Washington's New 9.9% Income Tax Applies to Stock Options and RSUs
Washington’s ESSB 6346 imposes a 9.9% income tax on household earnings above $1 million starting January 1, 2028. The tax is calculated from federal adjusted gross income, meaning equity compensation can push employees over the threshold in a single year. Incentive Stock Options...
Almost a Fifth of Employers Won’t Adjust Salary Sacrifice Post-2029
Research from Everywhen shows that 48% of UK employers currently offer salary‑sacrifice pension schemes, but 18% have no plans to adjust these arrangements when the government caps the National Insurance exemption at £2,000 a year from April 2029. The cap aims...
Your Accountant Is Right. Stop Investing in Residential. Buy Your Building.
Small business owners are urged to replace rental expenses with ownership of commercial real estate. By leveraging SBA 504 or 7(a) financing, they can acquire a building with as little as 10% down and benefit from long‑term fixed rates. Owner‑occupied...
Perplexity Launches Computer for Taxes to Draft, Review, and Optimize U.S. Federal Tax Returns Using Loadable AI Tax Modules
Perplexity has expanded its Computer AI platform with dedicated tax modules that can automatically draft U.S. federal tax returns on official IRS forms, review professionally prepared returns for errors, and create custom tools for complex scenarios such as rental portfolio...
The OBBBA Improved the Treatment of Investment—But There’s Still Work to Do
The One Big Beautiful Bill Act (OBBBA) makes key expensing provisions permanent, allowing companies to immediately write off equipment, machinery, and domestic R&D costs. It also expands Section 179 for small businesses and adds a temporary expensing rule for new manufacturing...
Kwong Decision Opens Refund Claims for Penalties, Interest
“…the Kwong decision suggests that taxpayers should reevaluate penalties and interest previously paid and consider filing refund claims targeting those amounts, even when the underlying tax liability itself is not in dispute.” Kwong Opens New Path for COVID-19 Refunds https://t.co/6OGToPBe1j...
Britain’s Innovators Backed with Around £100m of New Investment
The UK government has launched a £100 million (≈ $127 million) annual investment boost by expanding the Enterprise Management Incentives (EMI) scheme and doubling limits for the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT). The reforms quadruple EMI’s asset ceiling to...
Wisconsin Lets Couples File Separately Federally, Jointly Statewise
I was today years old when I learned there is a state out there that allows you to file separately at the federal level and jointly at the state level. Thanks, Wisconsin. Your married physicians seeking PSLF really appreciate you. #TaxTwitter
Does QSBS Avoid Washington’s New 9.9% Income Tax? (Yes — For Now)
Washington’s ESSB 6346, effective 2028, imposes a 9.9% income tax on household AGI above $1 million. Because Section 1202 excludes qualifying small‑business stock gains from federal gross income, those gains never enter AGI and thus escape the state tax. The article illustrates...
Gift Business Shares to Cut Estate Tax Liability
Entrepreneurs whose businesses grow substantially over time can end up with an asset worth many millions of dollars, creating a potential 'problem' of exceeding the estate tax exemption amount. https://t.co/15oEYyCXLW In this guest post, Anna Pfaehler, CFP, AEP, a Partner and Wealth...
Ontario Budget 2026 What It Means for Business Owners and Investors
Ontario’s 2026 budget cuts the small‑business corporate tax rate from 3.2% to 2.2% effective July 1, 2026. It also reduces the non‑eligible dividend tax credit to 1.9863%, raising the combined tax on such dividends to 48.89% starting 2027. A temporary HST new‑housing...
Roberts & Holland's Ezra Dyckman on REIT JV Compliance Complexities
At Nareit’s REITwise 2026 conference, Roberts & Holland partner Ezra Dyckman warned REITs about hidden tax pitfalls in operating‑partnership transactions. He explained that “disguised sale” rules can turn OP‑paid costs into taxable cash, creating unexpected tax bills and debt‑capacity issues. Dyckman...
QSBS Stacking: How to Multiply the $15M Exclusion with Trusts and Family Gifts
Qualified Small Business Stock (QSBS) under Section 1202 allows a $15 million exclusion per taxpayer per issuer, but founders can multiply this benefit through "stacking" strategies. By allocating shares to spouses, adult children, and non‑grantor trusts, each party receives its own exclusion,...
The “Mandated” New York S Corporation Election – Does Investment Income Include Gain From the Sale of Goodwill?
New York’s tax code mandates that a federal S corporation be deemed a New York S corporation when more than 50% of its federal gross income is classified as investment income. In a recent case, the Department of Taxation and...
Proper Asset Location Adds 0.30% After‑Tax Return
Vanguard's research showed that you could add 0.30% of annual after-tax returns simply by having a correct asset location strategy: - avoid bonds in brokerage. Keep them in retirement accounts - growth assets in Roth - efficient ETFs in brokerage - avoid REITs in...
Tax Strategies for Dividend Investors in Canada
The article breaks down how dividend income is taxed in Canada, emphasizing the distinction between eligible and non‑eligible dividends and the impact of the gross‑up and dividend tax credit system. It outlines how foreign dividends, especially from the U.S., face...
Turn Income Into Active Rentals, Escape Tax Penalties
Most high earners think they have a tax problem. They actually have a strategy problem. The tax code does not punish you for earning a lot. It punishes you for earning a lot and doing nothing with it. The moment you buy a cash-flowing...
Gig Work Is Flexible, Taxes Are Complicated
Gig work is flexible. Gig taxes? Not so much. No 1099 doesn’t mean no reporting—and some new deductions sound great… until you realize there are rules attached. It’s one of those “simple until it’s not” situations. Here’s what to know: https://t.co/BXKJJZUpEQ
Extensions Can Be a Tax-Planning Tool: Here’s How
Tax extensions, often misunderstood as procrastination, actually grant a six‑month filing window that can be leveraged for strategic tax planning. They give clients extra time to make retirement contributions, finalize K‑1s, and elect favorable depreciation or cost‑segregation treatments. By easing...
Backdoor Roth Bypasses Income Limits
One of the dumbest loopholes in the US tax code The IRS says if I make more than $168K filing single or $252K married filing jointly in 2026 I cannot contribute directly to a Roth IRA But I can still get funds inside...
Cost Seg Studies Save Taxes—Only If Passive Limits Allow
You own rental property and you've never done a cost seg study. that means you're depreciating everything over 27.5 years. same recovery period as the building itself. BUT. We can always go back to grab that tax savings but here's what nobody...
Quarterly Estimated Taxes 101 (How to Stop Overpaying or Underpaying)
Quarterly estimated taxes are a mandatory pay‑as‑you‑earn requirement that many small‑business owners mishandle, leading to either penalties or unnecessary cash outflows. The podcast explains how relying on last year’s income, ignoring safe‑harbor thresholds, and poor bookkeeping cause over‑ or under‑payment....
Married Filing Separately Doubles SALT Deduction for High Earners
Just the most jackass MFS that I've had to do. Couple lives in TX. They have about $600k in AGI, so they're capped at $10k in SALT MFJ. Their SALT is about $20k. By filing separately, they each get the full $10k...
Overstating Charitable Deductions Can Trigger 40% Penalty
If your charitable donation is worth $2 million, you probably shouldn’t try to take a $180 million deduction. Otherwise, as Hancock County Land Acquisitions discovered in Tax Court, you could face a 40% gross valuation misstatement penalty. https://t.co/o1C0zoX0lj
Tax-Free Family Vehicle Transfers en Route to Wyoming This Summer
Wyoming enacted a law, effective July 1, 2024, that eliminates state sales and use tax on motor‑vehicle transfers between qualifying family members. The exemption applies only to genuine sales or gifts, and the donor must have paid the original tax when...
Tax Attorney Secures AI Startup Deal via QSBS Strategy
Today I spoke with two founders who launched an AI powered consulting business that builds industry adjacent applications and software. Q1 Revenue: $300K Why did they want to speak with me? I am a tax attorney and they were referred...
Wealthy Use Secret Asset to Safeguard Money
Selling my company for 7 figures taught me exactly how wealthy people protect their money. It's not gold. It's not crypto. It's not index funds. It's something most W-2 earners have never heard of… Here's exactly what they do (& how you can copy them):
Episode 58: "$15 Million in Capital Gains: Gone" Startup Wealth Strategist Bryan Hasling on What Angel Investors Need to Know...
In a recent podcast, wealth strategist Bryan Hasling highlights three overlooked tax tools for angel investors: Section 1244 loss deductions, the nuances of Qualified Small Business Stock (QSBS) eligibility, and the audit risk of claiming zero‑tax QSBS gains. He explains that...
Home Sale, Forced To Sell Abroad? U.S. Tax Rules In Uncertain Times
Heightened geopolitical tensions in the Middle East are forcing U.S. expatriates to consider rapid relocations and the sale of their homes. The article explains how Section 121 of the Internal Revenue Code permits a $250,000 (or $500,000 for married couples)...
Lost in FX Translation: The Latest 987 Regs
PwC International Tax Services leaders Doug McHoney and Laura Valestin dissect the latest Section 987 updates introduced by Notice 2026‑17. The new rules replace the legacy framework with a simplified equity‑and‑basis‑pool method for calculating foreign currency gains and losses in...
Refinance Cash‑flowing Properties for Tax‑free Deal Funding
I NEVER sell a property that cash flows. The move is to refinance. Get an appraisal on the new value. Take a loan at 80% of that number. Pay off the old debt. Keep the difference. That cash is tax-free. You can use it...
Tax Season’s Not Over: Retroactive Tax Regs, Real-Time Decisions
The CPA Trendlines Academy is hosting a CPE webinar on April 2 to dissect a wave of retroactive and prospective tax regulations affecting 2025 returns and 2026 planning. New legislation, including the OBBBA reforms and expanded R&D and ERC provisions, creates...
Turn High Income Into Tax‑Free Real Estate Income
A high income = a big tax bill. A high income + real estate = a big tax bill + an asset. A high income + real estate + the STR loophole = no tax bill + an asset that pays you. Yet...
Most Misuse This Tax Strategy's Hidden Power
Too many people misunderstand and misuse this tax strategy when it’s way more powerful than you think 💪🏽
California Tax Litigation: Nexus Battles, Retroactive Laws, and Apportionment Disputes
Aprio’s interview with Michael Cataldo delves into California’s tax litigation hot spots, emphasizing the split between business and non‑business income and the contentious throw‑out rule. He illustrates how large transactions can skew the state’s single‑sales‑factor apportionment, prompting taxpayers to consider...
Are You Going to Jail for Tax Planning? Tax Attorney Sets the Record Straight
In a recent Small Business Tax Savings Podcast episode, tax attorney Ed Lyon demystifies tax‑risk, explaining why legitimate tax planning rarely leads to jail while fraud does. He highlights that the tax code incentivizes certain behaviors, but poor implementation can...
Basis Substantiation Audits for Partnerships and S Corporations
Basis substantiation audits focus on a taxpayer’s outside basis in partnerships and stock or debt basis in S corporations. The IRS examines how partners compute outside basis, especially liability allocations, while S‑corp shareholders must complete Form 7203 to prove loan documentation...