Deductions and Write-Offs

HSA question

Asked Friday, September 05, 2025 by Adam

I've had an HSA since Feb '22. I'm over 55 and been making the maximum contribution. I've had no medical issues in this time and not spent any of the funds. I didn't realize I was supposed to leave unspent funds in the HSA account so at the end of each year I moved the accumulated funds to my general savings. Do you think I still received my tax credit for my yearly HSA savings? Is there a way to restore the 15k back into my HSA account for interest, investment, and other purposes?

Quick Answer:

No, you likely did not receive the tax credit for your HSA contributions. HSA contributions are tax deductible, not a tax credit. The tax advantage comes from pre-tax contributions and tax-free grow...

Family Issues

Family member moved into our home

Asked Thursday, September 04, 2025 by Blake

My mother-in-law just moved in to our home; she has health issues and unable to care for herself now. She only has SS as income. We pay for all her needs. She wants to pay something to help out and contribute and not feel like a burden. We don't need her help but she insists. What is the best way to structure her giving us some money (ex. $500/M). Have been told if considered rent it would be taxable.

Quick Answer:

From a tax perspective, structuring payments from your mother-in-law as rent would likely trigger tax consequences for both of you. Since she receives only Social Security income, any rent payments...

Tax Filing Tips

Tax Implications of Family Funding for EB-5 Visa

Asked Wednesday, September 03, 2025 by Abhishek

Hi All: I am trying to understand the tax implications around borrowing vs receiving as a gift, half a million dollars from my family (brother). I am exploring options to apply for an EB-5 visa and need $800,000 to do so. I am partially funding it through my savings, and the rest will be covered with help from my family. I want to understand what the most tax-efficient way of doing so is (both for my brother, who will be gifting the money, and me, who will be receiving it). Thank you, Best, Abh

Quick Answer:

The most tax-efficient method depends on several factors not provided, and I cannot give specific financial or legal advice. However, I can offer some general tax considerations. For your brother (t...

Deductions and Write-Offs

Mileage

Asked Wednesday, September 03, 2025 by Heather

Hi! My company either pay for gas when I travel for site visits or mileage reimbursements. They said if I do the gas option I can claim my mileage on my taxes and get more money back verses having the company pay for my mileage. Which is better

Quick Answer:

As a CPA, I must advise against claiming mileage reimbursement *and* gas expense deductions simultaneously. This is double-dipping and is illegal. You can only deduct one or the other. If your comp...

Tax Forms

Gift tax on donor and receiver

Asked Friday, August 29, 2025 by Tianxue

If a donor writes me a $900,000 check and I deposit it into my personal bank account, do neither of us need to pay taxes? Does only the donor need to file a Form 709 with the IRS because the amount is below the $13.99 million lifetime exemption, so it won’t trigger any tax for the donor? Also, since this money is not considered income for the recipient, does that mean the receiver doesn’t need to report or pay taxes on it? Additionally, for a gift of this nature, is it better to have written doc

Quick Answer:

No. Both the donor and recipient may have tax implications. The donor may need to file a Form 709, Gift Tax Return, if the total gifts in a year exceed the annual gift tax exclusion (currently $17,0...

Retirement

How to fix an excess contribution to a SEP IRA

Asked Thursday, August 28, 2025 by Lisa

In '25, I contributed too much to my personal SEP IRA for '24. I had part of the excess recharacterized as a trad. IRA contrib for '25 and am using a form to withdraw the remaining excess. All seems clear except I have to choose a correction method- IRC404(h) or EPCRS. Which do I choose? What happens if I choose incorrectly? Will there be other documents or forms required later depending on my choice? (I filed for an extension for '24 taxes. I will not have any self-employment income in '25.)

Quick Answer:

Since you're correcting an excess SEP IRA contribution for a prior tax year (2024), and you have no 2025 self-employment income, IRC Section 404(h) is not applicable. This section deals with correct...

Personal Taxes

Receiving income as Contracted status

Asked Wednesday, August 27, 2025 by Chris

I have contracted with a company for services and am receiving an income. I need to find out my tax liability for this income. Does it become part of my other income and reported with my income taxes? Do I owe quarterly taxes on it? It is not my only source of income. I am over 72 years old.

Quick Answer:

Yes, your contract income is part of your overall income and must be reported on your income tax return. Since it's not your only source of income, whether you owe estimated quarterly taxes depends...

Bookkeeping & Write-up

Due To Due From

Asked Tuesday, August 26, 2025 by Theo

Hello, I have 2 companies with frequent inter-company transactions ranging from payments to vendors to xfers to cover payroll. Company A has both a Due to and Due From accnt for Company B and vice versa. I have been told that this is unnecessary and that I only need a Due To account and am able to record all transactions between the two companies under the Due To. Is this correct?

CPA Answer:

It isn't necessary to have both, but if you prefer to see them separated out like this it is fine. That is just an accounting preference. It is more important to make sure the Due to Company B on Company A matches the Due from CompanyA on Company B. The mistake with most inter-company loans is that a transaction is only recorded on one set of books and a deduction or revenue is missed. 

Answer Provided by: Stephanie Adams Stephanie Adams

Business Formation

Is there a tax efficient single member patent holding company structure?

Asked Monday, August 25, 2025 by Earl

I am creating a patent holding co. responsible for monetizing my patents. I plan to create a single member LLC and assign the patents to the LLC. If the LLC sells the patents or enters an exclusive license, I will be able to take advantage of capital gains tax rates. But the more likely scenario is a non-exclusive license with a lump sum royalty taxed at ordinary income tax rates (37%) plus SE tax, etc. Is there a better structure that will let me keep more of the royalties?

Quick Answer:

The single-member LLC structure you describe will likely result in the royalty income being taxed as self-employment income, subject to self-employment (SE) tax and ordinary income tax rates, regardle...

Tax Forms

Non-resident Tax

Asked Tuesday, August 19, 2025 by Koyo

I am a non-resident LLC owner with my agency residing in Wyoming. I would like to hire CPA for the following documents: Form 5472, Pro Forma Form 1120, and W-8BEN-E (to file for U.S.–Japan tax treaty). I would like to know how much hiring one would cost; does it depend on the person? Since I am non-resident, I am wondering how I can best find the person. Thank you very much for your support and looking forward to hearing back. Best, Koyo Asakawa

Quick Answer:

The cost of hiring a CPA to prepare Form 5472, a pro forma Form 1120, and a W-8BEN-E will vary depending on the CPA's experience, location, and the complexity of your situation. Fees can range from a...