Tax Tips

If your CPA has recently retired

Is Your CPA Retiring? Find a Trusted New CPA for 2024/2025 Tax Season!

Looking for a New CPA? We’re Here to Help! If your CPA has recently retired, you might be wondering who will handle your tax filings, financial planning, and accounting needs for 2024 and beyond. A trusted CPA is essential for managing your personal and business finances, ensuring compliance, and maximizing tax benefits. At KB CPA […]

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The 2/7 Rule for Wages and Maximizing QBI Deduction

The 2/7 Rule for Wages and Maximizing QBI Deduction

The Qualified Business Income (QBI) deduction offers owners of pass-through entities a significant tax advantage by allowing a deduction of up to 20% of their qualified business income. However, maximizing this deduction requires careful consideration of various factors, including taxable income thresholds and wage limitations. Understanding the 2/7 Rule: For taxpayers whose taxable income exceeds

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Evaluating Fee-for-Service Activities

Evaluating Fee-for-Service Activities: Ensuring Substantial Alignment with Exempt Purposes.

Sec. 501(c)(3) organizations engaging in fee-for-service activities must determine whether these activities advance or are “substantially related” to their exempt purpose. This distinction is critical for maintaining tax-exempt status and avoiding the unrelated business income tax (UBIT). Generally, services are not considered substantially related simply because they are provided to other tax-exempt organizations or offered

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Like-Kind Exchanges of Real Estate

A Professional Guide to Like-Kind Exchanges of Real Estate: Basics, Updates, and Examples

The ability to defer taxes through like-kind exchanges has long been a cornerstone of U.S. tax policy, tracing its origins to the Revenue Act of 1921. Modernized under Sec. 1031, this provision encourages economic growth by allowing taxpayers to defer taxes when exchanging real property of a similar kind. This guide provides an overview of

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IRS Announces New Tax Brackets and Increased Standard Deduction for 2025

IRS Announces New Tax Brackets and Increased Standard Deduction for 2025

The Internal Revenue Service (IRS) has released its annual inflation adjustments for tax brackets and standard deductions for the 2025 tax year. These updates aim to help Americans potentially retain more of their income in the upcoming year. Each year, the IRS adjusts the federal income tax brackets, standard deduction, and other tax provisions to

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How Tax Reforms Can Strengthen Americans’ Diminishing Savings

As savings from the pandemic era dwindle and financial stress becomes the leading concern for most Americans, it is evident that the U.S. needs policies that encourage increased savings. Personal savings provide financial security and drive economic growth through investment. However, our current tax system imposes double taxation on savings, incentivizing immediate consumption rather than

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Charities and Nonprofits: Understanding Exempt Organization Types

Charities and Nonprofits: Understanding Exempt Organization Types

Charitable Organizations Organizations dedicated solely to religious, charitable, scientific, public safety testing, literary, educational, or other specified purposes, and that meet specific criteria, are granted tax-exempt status under Internal Revenue Code Section 501(c)(3).  Churches and Religious Organizations Churches and religious organizations, like other charitable entities, can qualify for federal income tax exemption under Section 501(c)(3).

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Determining Whether an Activity is a Trade or Business

Determining Whether an Activity is a Trade or Business

Whether a revenue-generating activity constitutes a trade or business is typically straightforward — until it isn’t. The most common confusion on this issue arises around hobbies that generate revenue and investments that involve personal involvement. Many of these activities are challenging to distinguish from trades or businesses. Having the status of a trade or business

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