Month: February 2025

You can receive up to a $200 credit on your Indiana state return. Contributions include the $25 Group Fee for an Indiana College vehicle license plate.

If you have a self-directed IRA that invests in rental properties, then you might have to pay Unrelated Business Income Tax.  The tax is due to be paid by the IRA if your rental is “debt-financed” and has more than 1K of taxable profit in a year.  Most rentals don’t show a taxable profit because of depreciation expense in normal years.  The rental, will, however, likely have a taxable profit in the year of sale.  To avoid paying this tax in the year of sale, you would have to make sure the rental was not debt-financed at least 12 months before the date of sale.  You would need to put more money in the self-directed IRA that owns the rental, pay off the mortgage, continue to hold the rental for 12 months, and then sell it.  Since the tax is up to 37% of your profit in the year of sale, this strategy might be worth the hassle.

In the old days ( 3 years ago), a business could deduct 100% of the purchase price of an SUV with a gross vehicle weight rating of more than 6K pounds that was used 100% in the business in the year of purchase.  Due to law changes, this is no longer the case.  In 2025, the deduction for that SUV may between 40% and 70% of the purchase price depending on several factors.  If you purchase a truck with an interior bed length of at least 6 feet, then you still might get a 100% deduction.  You also might get a 100% deduction if the vehicle is low-cost or has room for 9 passengers in the back or has no seating for passengers behind the driver.  Ask us for details before you make the decision on which vehicle to buy for your business in 2025.

If you spend money on a business before it is operational, then those expenses will likely be deducted over 15 years (i.e. very slowly).  To avoid this, try to make your business operational as soon as you start spending money.  Do this by having your business “in a position to generate revenue” as soon as possible by making your first sale quickly or at least being in a position to accept the first sale.  Any expenditures after that positioning will be deductible “ordinary and necessary operating expenses” rather than non-deductible “start-up expenses”.

If you are a partner in an partnership that has multiple partners, and spend money on behalf of the partnership, then your expenditures can be deducted under 2 methods. Either you ask your partnership to reimburse you (and then the partnership deducts the expense) or you don’t get reimbursed from the partnership and you deduct the expense (called “UPE” – Unreimbursed Partner Expenses) on your personal tax return. You can only deduct UPE on your personal tax return if the partnership agreement states that those expenses WILL NOT be reimbursed by the partnership. Review your partnership agreements to see what the language is and then ask us for guidance on how best to modify it to balance the interests of the partnership/other partners/you.