Paying Investment Expenses in your Taxable Brokerage Accounts?

Assume you have a brokerage account that is not a Roth, IRA, or 401K that charges investment-management fees. Those fees can no longer be deducted on your individual tax return (this was a 2018 law change). Instead of paying investment-management fees from your taxable brokerage account, direct your advisor to withdrawal the investment management fees from your IRA or 401K account. This will reduce the amount in those accounts which will someday be taxed, thus providing a back-door method to deduct those fees.

Do your Employee’s Spend Money to Perform Their Job?

Most employees incur expenses to do their jobs. The employee might drive for their job or use their cell phone or home internet or maintain a home office. If you don’t reimburse your employee’s expenses, then the employee has no way to deduct those un-reimbursed expenses on their individual tax returns (those deductions go wasted). Instead, consider reducing your employee’s wage and replacing that reduction with a reimbursement. Example: If your employee earns $50,000 and incurs $5,000 of un-reimbursed expenses (driving, cell phone, internet, supplies, home office), then you pay FICA tax on $50,000 and your employee pays tax on $50,000 and can’t deduct their $5,000 of expenses. If you instead pay that employee $45,000 as a wage and $5,000 of reimbursement, then the employee is still making $50,000, but you pay FICA tax on $45,000 (save $383) and the employee pays tax on $45,000 instead of $50,000 (saving the employee around $1,200 of tax/year).