CHAPTER 24Income and Deduction Strategies
Understanding what income you must report and the various business deductions you may claim is only half the job. You must also know when to report income and when to postpone it, when to claim certain deductions and when not to claim them. You should also be aware of the common traps that business owners often fall into with their income and deductions so you can audit-proof your return to the extent possible.
Tax planning is always complicated, but this is a time of particular confusion. While many of the tax changes made by recent legislation are permanent, many others are temporary. For example, the lowered individual income tax rates and the qualified business income deduction for owners of pass-through entities are set to expire at the end of 2025. Some of the COVID-19-related changes apply only for a portion of 2021. What's more, new legislation always contains uncertainties requiring technical corrections in Congress or IRS guidance. Finally, it is important to recognize that you should not always go at it alone. You may need to get the assistance of tax professionals or additional information from the IRS. You need to know how to obtain referrals to tax professionals. You also need to know some important IRS telephone numbers to call for assistance. This information is included throughout this chapter for your convenience. ...
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