Are you planning to file your tax return early? Here are reasons for not to do so.

When it comes to tax return filing, we always take it seriously and try to file our tax as early as possible. However, IRS is warning taxpayers who like to file their tax returns in late January or early February to wait until later in 2023, 

 

Key Points 

• New $600 threshold for receiving Form 1099-K for third-party payments. 
• Form 1099-K applies to payments from third-party networks, such as Venmo or PayPal, for transactions such as part-time work, side jobs or selling goods. 
• It is possible you will receive a form 1099-K for a transaction that you did not anticipate, such as making a profit by reselling Taylor Swift tickets. 
• You may take action if you received an incorrect Form 1099-K. 
• Wait until the end of February 2023 and file your tax return in order to avoid amendment.  

Here is the reason why IRS is warning and asking for late filing.  

In a recent release, the IRS strongly advised against filing tax returns early to look out for Taxpayers may receive Form 1099-K | Internal Revenue Service, which will track third-party payment systems like PayPal and Venmo, according to CNBC. 

As per IR-2022-203 news releases, published on November 22, 2022. Extract from the news releases. 

 

“Taxpayers should report the income they earned, including from part-time work, side jobs or the sale of goods. The American Rescue Plan Act of 2021 lowered the reporting threshold for third-party networks that process payments for those doing business. Prior to 2022, Form 1099-K was issued for third-party payment network transactions only if the total number of transactions exceeded 200 for the year and the aggregate amount of these transactions exceeded $20,000. Now a single transaction exceeding $600 can trigger a 1099-K. The lower information reporting threshold and the summary of income on Form 1099-K enables taxpayers to more easily track the amounts received. Remember, money received through third-party payment applications from friends and relatives as personal gifts or reimbursements for personal expenses is not taxable. Those who receive a 1099-K reflecting income they didn’t earn should call the issuer. The IRS cannot correct it.” 

 

According to the IRS, the modification applies to payments made through third-party networks like Venmo or PayPal for transactions like selling items or performing part-time employment. Other examples include having a side job or selling goods. 

  

Before the year 2022, the reporting level for the federal Form 1099-K was for taxpayers who had more than 200 transactions with a total value of more than $20,000. However, as part of the American Rescue and Reinvestment Plan Act of 2021, Congress reduced the ceiling, and now a single transaction that is over $600 has the potential to activate the form. 

 

Reporting requirement is that (1) third-party networks like Venmo, or PayPal require to file annual information return and (2) issue Form 1099-K to the taxpayer. As a taxpayer, you will receive form 1099- K by January 31, 2023.  

 

Because there is a new tax reform, the taxpayer must wait until January 31, in addition to the number of days it takes for the mail to transmit the form 1099-K, before they may receive it. 

 

It is possible you will receive a form 1099-K for a transaction that you did not anticipate, such as making a profit by reselling Taylor Swift tickets. 

 

On the other hand, if you receive the form for personal transactions, the agency instructs you to get in touch with the issuer in order to have a correction made. According to the IRS, if the firm does not repair the error, you have the option of attaching an explanation to your tax return while still appropriately reporting your income. 

 

Read Understanding Your Form 1099-K | Internal Revenue Service (irs.gov) to know more. In this page, you will find FAQs which are very informative.   

 

Contact Surya Padhi at Sure Financials for any questions and clarification. Surya Padhi is an expert who keeps current on tax law changes as well as a member of the National Association of Tax Professionals National Association of Tax Professionals (NATP) and  National Association of Enrolled Agents (naea.org). Visit Welcome | Sure Financials & Tax Services, LLC (surefintaxsvs.com) for more information and contact us by calling +1 908.300.9193. 

Good recordkeeping year-round helps taxpayers avoid tax time frustration

Tax Tip 2022-183

Wading through a pile of statements, receipts and other financial documents when it’s time to prepare a tax return can be frustrating for people who haven’t managed their records. By knowing what they need to keep and how long to keep it, people can develop a good recordkeeping system year-round and make filing their return easier.

Good recordkeeping can also help taxpayers understand their situation when they receive letters or notices from the IRS.

Good records help:

• Identify sources of income. Taxpayers may receive money or property from a variety of sources. The records can identify the sources of income and help separate business from non-business income and taxable from nontaxable income.
• Keep track of expenses. Taxpayers can use records to identify expenses for which they can claim a deduction. This will help determine whether to itemize deductions at filing. It may also help them discover potentially overlooked deductions or credits.
• Prepare tax returns. Good records help taxpayers file their tax return quickly and accurately. Throughout the year, they should add tax records to their files as they receive them to make preparing a tax return easier.
• Support items reported on tax returns. Well-organized records make it easier to prepare a tax return and help provide answers if the return is selected for examination or if the taxpayer receives an IRS notice.

In general, taxpayers should keep records for three years from the date they filed the tax return. Taxpayers should develop a system that keeps all their important information together. They can use a software program for electronic recordkeeping. They could also store paper documents in labeled folders.

Records to keep include:

• Tax-related records. This includes wage and earning statements from all employers or payers including payment apps or cards, such as Form W-2, 1099-K, 1099-Misc, 1099-NEC. Other records include interest and dividend statements from banks, certain government payments like unemployment compensation, other income documents and records of virtual currency transactions. Taxpayers should also keep receipts, canceled checks, and other documents that support income, a deduction, or a credit reported on their tax return.
• IRS letters, notices and prior year tax returns. Taxpayers should keep copies of prior year tax returns and notices or letters they receive from the IRS. These include adjustment notices when an action takes place occurs on the taxpayer's account.
• Property records. Taxpayers should also keep records relating to property they dispose of or sell. They must keep these records to figure their basis for computing gain or loss.
• Business income and expenses. Business taxpayers should find a bookkeeping method that clearly and accurately reflects their gross income and expenses. Taxpayers who have employees must keep all employment tax records for at least four years after the tax is due or paid, whichever is later.
• Health insurance. Taxpayers should keep records of their own and their family members' health care insurance coverage. If they're claiming the premium tax credit, they'll need information about any advance credit payments received through the Health Insurance Marketplace and the premiums they paid.

Sure Financials and Tax Services LLC

Phone:+1.908.300.9193, Fax:+1.855.753.0066

Email:services@surefintaxsvs.com | Web: https://surefintaxsvs.com

 

Year-End Preparation: What You Need to Know and Plan for 2022?

Before it's too late, now is the opportunity to cut your next tax payment by taking advantage of year-end measures that can help you save money.

Whether you donate to a nonprofit organization, put money into your retirement account, or look into helpful tax deductions, taking these tiny efforts now can make a large difference when it comes time to file your taxes. The filing deadline for taxes owed for 2022 is April 18th, 2023.

The following is a list of five tax-related decisions that you should make before the clock strikes midnight on New Year's Eve.

 

1) Key Points

• Reconsider and review your withholding tax deduction.
• Make a right and tax-deductible charitable contribution.
• Maximize your 401(k) deduction.
• Utilize your FSA to the maximum extent.
• Harvest your expected loss.
• Consider wash sale rules.
• Defer your income to reduce tax.
• Withdraw required minimum distribution.
• Review and consider estate planning.

2) Lookback your withholding tax

If you've experienced any significant changes in your career or personal life, such as a raise in salary, a shift in your marital status, the birth of a child, or the purchase of a home, it's vital that you review your current tax withholding. To ensure that the appropriate amount of taxes are being withheld from your paycheck, it is a good idea to review your withholding.

If you don't withhold enough money from your paychecks, you could end up with a tax charge after filing your returns. Altering your tax situation to get more money in each paycheck may be preferable if you withhold too much and end up getting a huge tax refund.

The IRS provides a self-service tool called the tax withholding estimator that can help you determine if you have withheld enough money from your paycheck. To get started, you'll need to have access to your most recent pay stub and tax return.

Read SURE FINANCIALS AND TAX SERVICES LLC: Taxpayers should check their federal withholding to decide if they need to give their employer a new W-4 (surefintaxsvs.blogspot.com) to know when you need to update your employer with new form W-4

3) Think about charitable donations.

Contributing to a charity you care about before the end of the year might have additional benefits, including lowering your taxable income.

Donations to charity are generally deductible only if you itemize your tax deductions. But to itemize, your total deductions must be higher than the standard deduction.

When filing your taxes, the IRS permits you to deduct a standard amount called the "standard deduction" regardless of your personal circumstances. As the government attempts to adjust for the biggest inflation in decades, it has been increasing standard deductions.

The standard deduction amounts for the 2022 tax year (for returns submitted in 2023) are as follows:

• $12,950 for single and married-filing-separately taxpayers
• $19,400 for head of household taxpayers
• $25,900 for married-filing-jointly or qualifying widow(er) taxpayers

However, before making a donation, verify that the charity of your choice is eligible to receive tax-deductible contributions. The Internal Revenue Service (IRS) provides a search tool where you may get up-to-date information about tax-exempt organizations.

To complete your search, you will need either the company name or EIN.

4) Take the benefit of 401(k) contributions.

A 401(k)-retirement account contribution deadline is typically the later of December 31 or your final paycheck of the year. A maximum of $20,500 can be contributed that year. To the maximum of $27,000, an additional $6,500 can be contributed if you are 50 or older. Limits do not apply to employer contributions. There is a cap of $61,000 for 2022 on the sum of your and your employer's contributions.

You need to take action immediately because December will bring your last paycheck of the year. Increasing your retirement contributions typically requires a conversation with your company's human resources division. To make sure you haven't already reached the annual contribution limit, you should know how much you contributed this year.

5 ) Take a look at your Flexible Spending Account (FSA).

Use IT or Lose IT. A Flexible Spending Account (also known as a flexible spending arrangement) is a special account you put money into that you use to pay for certain out-of-pocket health care costs. FSAs are limited to $2,850 per year per employer. If you’re married, your spouse can put up to $2,850 in an FSA with their employer. You generally must use the money in an FSA within the plan year. But your employer may offer one of 2 options:(1) It can provide a "grace period" of up to 2 ½ extra months to use the money in your FSA.(2) It can allow you to carry over up to $570 per year to use in the following year. As per https://www.irs.gov/pub/irs-drop/n-21-15.pdf  this rule temporarily  is allowing carry the entire unused amount to next year.

6 ) Harvest your loss.

Tax loss harvesting is when you sell some investments at a loss to offset gains you’ve realized by selling other stocks at a profit. The result is that you only pay taxes on your net profit, or the amount you’ve gained minus the amount you lost, thereby reducing your tax bill. Single filers and married couples filing jointly can deduct up to $3,000 in realized losses from ordinary income.

Select this course of action if you are confident that your investment will not rise in value in the near future.

7 ) Keep in mind the wash sale rules

You can’t, for instance, sell a stock to realize a loss and minimize your tax burden—and then rebuy that exact same stock, or even one that’s nearly identical. This strategy is referred to as a wash sale. A wash sale occurs when you sell securities at a loss and within 30 days before or after the sale buy “substantially” identical securities, or acquire a contract or option to do so. The wash sale rule does not, however, preclude purchasing securities in the same industry. For example, you can sell shares of Pfizer and replace them with shares of Merck. 

8 ) Defer your income

By deferring ( postponing ) income to next year, you may be able to minimize your current income tax liability, if your future year tax rate is low. Here are ways you can achieve this strategy

(1) Cash method of accounting: First, the Tax Cuts and Jobs Act (TCJA) widened the class of companies eligible to adopt the cash method of accounting. You still have time to put this plan into action by switching to the cash method automatically before the tax return's due date (including any extensions). Exactly who has the authority to implement this change? As long as inventory is not a significant contributor to income, sole proprietorships, partnerships, and S companies can switch to the cash method of accounting regardless of their average annual gross receipts. A switch to the cash method is made automatically for C corporations (or partnerships with a C corporation partner) with average annual gross receipts of $25 million or less for the past three taxable years.

(2) Postpone Year-End Billing: If you're using the cash approach, put off billing your customers until after the end of the year.

(3) Installment sales: A sale is the transfer of ownership of an item. As long as at least one payment is received in the year after the sale, income recognition is typically deferred under the installment method until the gain is realized. If you think you would sell property before the end of 2022 and it would be financially beneficial to do so, you might want to explore selling the property and reporting the gain under the installment method so that any payments (and tax) can be postponed until 2023 or later.

(4) Interest and Dividend: Treasury securities and bank CDs with maturities of one year or less earn interest, but that interest is not considered taxable income until it is actually received. Investing in bonds or certificates that won't mature until next year is one way to put off collecting interest money. The 2022 tax year won't apply to dividends unless you have constructive receipt of them before December 31. (exceptions may apply if you have control over when dividends are paid to you.)

9 ) Be cognizant about RMD ( Required Minimum Distribution).

Required minimum distributions (RMDs) must be taken from traditional IRAs and employer-sponsored retirement plans after the account holder reaches age 72 (exceptions may apply if the account holder is still actively employed by the plan's sponsor). Withdraw the RMD by December 31st, the end of the tax year for most people. The penalty for not doing so is steep: fifty percent of the amount you were supposed to disperse but didn't. Beneficiaries are typically expected to take annual payments from inherited retirement accounts (and under the 10-year rule), with some exceptions for surviving spouses. Refer to SURE FINANCIALS AND TAX SERVICES LLC: Required Minimum Distribution (RMD) (surefintaxsvs.blogspot.com) for more information.

10 ) Make an estate plan or revisit estate planning.

It's a good idea to sit down with a financial advisor and go over your estate plans towards the end of the year to see if there are any ways you can save money on taxes or improve upon your current approach. The current $12.06 million lifetime gift and estate tax exception, in effect until 2026, may be a topic of conversation. You might also talk about whether or not it makes sense to set up a trust and fund it before the end of the year so as to take advantage of the tax benefits offered by the current legislation.

Contact Surya Padhi at Sure Financials for any question and clarification. Surya Padhi is an expert who keeps current on tax law changes as well as a member of the National Association of Tax Professionals National Association of Tax Professionals (NATP) and  New Homepage - National Association of Enrolled Agents (naea.org). Visit Welcome | Sure Financials & Tax Services, LLC (surefintaxsvs.com) for more information and contact us by calling +1 908.300.9193.

 

 

Reduce Your Tax Payable Or Increase Your Refund.

 Reduce Tax Payable Or Increase Refund

• Retirement Account : Max out contribution to your 401K, IRA , HSA account. These  contributions reduce your tax liability and increase refund. Although you can contribute to these accounts till 15th April, 2022. I would suggest planning it now, so that you can avoid last minute rush. Check for tax year 2021 limits

• Charitable Deduction: Now you can claim cash donation to certain charitable up to $600.00 (MFJ), or $300.00 (Single), even though you elect to  use standard deduction. If you are claiming a charitable contribution, you need to keep receipt of such a donation. 

• Loss Harvesting : Tax loss harvesting is when you sell some investments at a loss to offset gains you’ve realized by selling other stocks at a profit. The result is that you only pay taxes on your net profit, or the amount you’ve gained minus the amount you lost, thereby reducing your tax bill. Single filers and married couples filing jointly can deduct up to $3,000 in realized losses from ordinary income.

• Wash Sales: You can’t, for instance, sell a stock to realize a loss and minimize your tax burden—and then rebuy that exact same stock, or even one that’s nearly identical. This maneuver is referred to as a wash sale. A wash sale occurs when you sell securities at a loss and within 30 days before or after the sale buy “substantially” identical securities, or acquire a contract or option to do so. The wash sale rule does not, however, preclude purchasing securities in the same industry. For example, you can sell shares of Pfizer and replace them with shares of Merck. 

• Flexible Spending Account: FSA : Use IT or Lose IT. A Flexible Spending Account (also known as a flexible spending arrangement) is a special account you put money into that you use to pay for certain out-of-pocket health care costs. FSAs are limited to $2,750 per year per employer. If you’re married, your spouse can put up to $2,750 in an FSA with their employer. You generally must use the money in an FSA within the plan year. But your employer may offer one of 2 options:(1) It can provide a "grace period" of up to 2 ½ extra months to use the money in your FSA.(2) It can allow you to carry over up to $550 per year to use in the following year. As per [ https://www.irs.gov/pub/irs-drop/n-21-15.pdf], this rule temporarily  is allowing carry entire unused amount to next year

• Defer your income: By deferring ( postponing ) income to  next year, you may be able to minimize your current income tax liability. 

Use IRS Tax Withholding Estimator, Reduce Your Penalty for Short Payment.

The IRS encourages everyone to use the Tax Withholding Estimator to perform a “paycheck checkup.”  This will help you make sure you have the right amount of tax withheld from your paycheck.

There are several reasons to check your withholding:

• Checking your withholding can help protect against having too little tax withheld and facing an unexpected tax bill or penalty at tax time next year.
• At the same time, you may prefer to have less tax withheld up front, so you receive more in your paychecks and get a smaller refund at tax time.

Use your results from the Tax Withholding Estimator to help you complete a new Form W-4, Employee's Withholding Certificate, and submit the completed Form W-4 to your employer as soon as possible. Withholding takes place throughout the year, so it’s better to take this step as soon as possible.

To conduct a "paycheck checkup", you can use the IRS’s Tax Withholding Estimator (www.irs.gov/W4App). To effectively use the estimator, it is helpful to have a copy of your most recent pay stub and tax return.

Refer for slide for How to Do?  https://app.box.com/s/8m6ftx86luvivghp8u766py4avhk32a9

Sure Financials and Tax Services LLC

Mobile: 908.300.9193 | Fax: 855.753.0066

E-Mail:services@surefintaxsvs.com

Web:https://surefintaxsvs.com/

What you can tax as Business Tax Credit

Dear Client: 

 

Obtaining a tax credit is the next best thing to paying no taxes at all.  

 

The tax code contains over 30 non-refundable tax credits for businesses. These are part of the general business tax credit and are claimed on IRS Form 3800, General Business Tax Credit, and on Schedule 3 of Form 1040. The general business credit is not itself a tax credit, but rather an overall limitation on the total credits that a business can claim each year. 

 

What if you're a Schedule C business owner who doesn't have employees and isn't involved in one of the niche businesses that come with a credit? You're not necessarily left out of the tax credit bonanza. Here are six tax credits that many Schedule C businesses with no employees can claim (and of course, you can qualify for these credits with employees, too). 

 

1. Credit for Increasing Research Activities 

 

The credit for increasing research activities is intended to encourage businesses to invest in scientific research and experimental activities.  

 

Any technological research qualifies, so long as it relates to a product's new or improved function, performance, reliability, or quality. The research must involve the physical or biological sciences, engineering, or computer science.  

 

You don't have to have employees to get this credit, because you can claim the credit for 65 percent of the cost of hiring third parties to perform research activities on your behalf, such as outside contractors, engineering firms, or research institutes.  

 

Calculating the credit is complex. 

 

2. Qualified Plug-In Electric Drive Motor Vehicle Credit 

 

If you purchase a new electric vehicle, you may be able to claim a credit. These include fully electric vehicles (EVs) and plug-in hybrid EVs (PHEVs). 

 

The maximum credit is $7,500, and the minimum is $2,500. But the actual amount depends on the size of the vehicle's battery. EVs generally get the maximum $7,500, while PHEVs often qualify for less. For example, a Ford Mustang Mach-E qualifies for a $7,500 credit, while a Subaru Crosstrek Hybrid gets only $4,502.  

 

Unfortunately, the credit phases out the year after a manufacturer reaches 200,000 total EV car sales in the U.S.  

 

Tesla and General Motors are the only two manufacturers so far to reach the limit, and the credits for their EVs are now completely phased out. So you won't get a federal credit if you purchase a Tesla or a Chevy Volt. Toyota and Ford will probably be next to cross the 200,000-EV threshold. 

 

You can find a list of credit-eligible models and their amounts by clicking here. The IRS updates this page frequently. 

 

When you claim the credit for a business vehicle, you reduce the vehicle's depreciable basis by the credit amount. You then depreciate the remaining adjusted basis as you would for any other business vehicle. 

 

3. Disabled Access Tax Credit 

 

The Americans with Disabilities Act (ADA) prohibits private employers with 15 or more employees from discriminating against people with disabilities in the full and equal enjoyment of goods, services, and facilities offered by any "place of public accommodation"—this includes businesses open to the public. 

 

The disabled access tax credit is designed to help small businesses defray the costs of complying with the ADA. But you don't have to have employees to claim the credit. The credit may be claimed by any business with either 

 

• $1 million or less in gross receipts for the preceding tax year, or 
• 30 or fewer full-time employees during the preceding tax year. 

 

The amount of the tax credit is equal to 50 percent of your disabled access expenses that exceed $250 in a year but are not more than $10,250. Thus, the maximum credit is $5,000. 

 

4. Business Energy Tax Credit 

 

There is a business energy credit based on the cost of qualified energy property used in a trade or business or for the production of income, such as a residential rental building. The credit ranges from 10 percent to 30 percent of the cost of such property.  

 

The credit can be claimed for various types of renewable energy installations, including thermal and geothermal energy, wind turbines, and fuel cells.  

 

But small businesses most often claim the credit for the cost of installing solar panels and related equipment to generate electricity to provide illumination, heating, or cooling (or hot water) in a business structure, or to provide solar process heat.  

 

Unlike the solar credit for homeowners, there is no dollar limit on this business credit. The credit is 26 percent of the cost of solar property whose construction begins in 2020, 2021, or 2022.  

 

The tax code reduces the credit percentage to 22 percent if construction begins during 2023.  

 

5. Rehabilitation Tax Credit 

 

The rehabilitation tax credit helps defray part of the cost of rehabilitating historic old buildings. The credit is available only if you rehab a certified historic building or a building located in a registered historic district. The credit can be claimed for commercial, industrial, agricultural, and residential rental historic buildings. 

 

The secretary of the interior must certify to the secretary of the treasury that the project meets their standards and is a "Certified Rehabilitation." If your building is not already registered as historic but you think it should be, you can nominate it for historic status by contacting your state historic preservation office.  

 

6. New Energy-Efficient Home Credit 

 

If you're a building contractor who builds homes, there is a tax credit just for you. You can get a credit of up to $2,000 for building an energy-efficient home.  

 

The credit is available for all new homes, including manufactured homes, built between January 1, 2018, and December 31, 2021. To meet the energy savings requirements, a home must be certified to provide heating and cooling energy savings of 30 percent to 50 percent compared with a federal standard.  

 

A reduced credit of $1,000 is available for manufactured homes with a heating or cooling consumption at least 30 percent less than a comparable house and with the Energy Star label. 

 

Are More Credits on the Way? 

 

In the news, you have been reading and hearing about the Build Back Better bill that passed the House and is being considered by the Senate. There are lots of tax credits in the bill. But there are three things to know as of December 1, 2021. 

 

1. The Senate will likely create and try to pass its own version of this bill. 
2. If the Senate passes the bill in a different form, the bill will go to a conference with both House and Senate members, who will make more changes. 
3. Regardless of what happens, we don't see any changes in the current bill or expect any changes that will affect the information in this article. The changes, if any do become law, will apply to 2022 and later. 

 

If you would like my help in qualifying for any tax credits, please call me on my direct line at 908-300-9193

 

Sincerely, 

Sure Financials and Tax Services LLC

Mobile: 908.300.9193 | Fax: 855.753.0066

E-Mail:services@surefintaxsvs.com

Web:https://surefintaxsvs.com/

What you need to know for Self-Employment Tax?

Dear Client: 

 

The tax code says, "The term 'net earnings from self-employment' means the gross income derived by an individual from any trade or business carried on by such individual . . ."  

 

The Supreme Court ruled that to be in a trade or business, you need to be involved with continuity and regularity and that a sporadic activity does not qualify. 

 

In Batok (T.C. Memo 1992-727), the court ruled that John Batok's installation of windows did not rise to the level of a trade or business. Mr. Batok's activity, although engaged in for profit, was neither continuous nor regular. He had never installed windows before this effort nor at any time after that.  

 

The court ruled that Mr. Batok's activity was a "one-time job" not subject to self-employment taxes. 

 

The one-time project can avoid having your child on the payroll, and it can give you the best of all worlds.  

 

For example, say you are in the 40 percent federal bracket, and you pay your 20-year-old college student $23,225. You deduct the $23,225 and save $9,290 on your taxes. 

 

Your child pays $1,028 in taxes. 

 

If you would like to discuss this strategy, please call my direct line at 908-300-9193. 

 

Sincerely, 

Sure Financials and Tax Services LLC

Mobile: 908.300.9193 | Fax: 855.753.0066

E-Mail:services@surefintaxsvs.com

Web:https://surefintaxsvs.com/

Take the Advantages of Self-Directed IRA and Maximize Your Return On Investment

Dear Client: 

 

Tax-advantaged retirement accounts such as IRAs are a great way to save for retirement.  

 

But when you establish a traditional IRA with a bank, a brokerage, or a trust company, you are ordinarily limited to a narrow range of investment options, such as CDs, publicly traded stocks, bonds, mutual funds, and ETFs. The IRA custodian will not permit you to invest in alternative investments such as real estate, precious metals, or cryptocurrency. 

 

A self-directed IRA could be for you if you want to walk on the wild side and invest your retirement money in assets such as real estate or cryptocurrency. 

 

You can invest in almost anything other than collectibles such as art or rare coins, life insurance, or S corporation stock with a self-directed IRA. Investment options include, but are not limited to the following: 

 

• Real estate 
• Private businesses 
• Trust deeds and mortgages 
• Tax liens 
• Precious metals such as gold, silver, or platinum 
• Private offerings 
• LLCs and limited partnerships 
• REITs 
• Livestock 
• Oil and gas interests 
• Franchises 
• Hedge funds 
• Cryptocurrency 
• Promissory notes 

 

Aside from he vast array of investment options, a self-directed IRA is the same as a traditional IRA and subject to the same rules. The income the investments in your IRA earn is not taxed until you take distributions, but distributions before age 59 1/2 are subject to a 10 percent penalty unless an exception applies.  

 

You can also have a self-directed Roth IRA for which distributions are tax-free after five years. 

 

But you must avoid self-dealing and other prohibited transactions or your self-directed IRA could lose its tax-advantaged status. 

 

Establishing a self-directed IRA need not be too difficult. You first open an account with a custodian that offers self-directed investments. You can also acquire checkbook control over your self-directed IRA by forming a limited liability company to own all the IRA investments. 

 

Investing in alternative assets such as cryptocurrency is riskier than stocks, bonds, and mutual funds.  

 

• The rewards can be great, as you've seen with recent returns for cryptocurrency investors.  
• And the damage to your investment portfolio can be substantial, as we've also seen over the years. 

 

When it comes to alternative investments, you need to know what you are doing or have an investment professional you trust to do this for you. 

 

If you have any questions or need my assistance, please call me on my direct line at 908-300-9193

 

Sincerely, 

 

Sure Financials and Tax Services LLC

Mobile: 908.300.9193 | Fax: 855.753.0066

E-Mail:services@surefintaxsvs.com

Web:https://surefintaxsvs.com/