Translations from Your Trusted Advisor.
The IRS has released a new Form W-4 for 2020. This form is provided to employers by their employees to authorize the proper amount federal income tax to be withheld from the employee’s paycheck. The previous version of this form was believed to be confusing because an employee had to come up with a number of allowances and the employer would use those allowances to calculate withholdings.
Lena Rozzi, CPA •
If you own or manage a rental property, chances are that you’ve heard of depreciation before. Once you’ve determined your depreciation rates, expensing it year-after-year can be pretty straightforward. However, if you decide to sell your property, any depreciation that you’ve taken will come back to you as a depreciation recapture. While the concept of depreciation recapture is more complicated than depreciation expense, real estate investors will benefit from understanding how depreciation recapture will affect your tax liability to avoid surprises when it comes time to file your tax returns.
By the time a lot of taxpayers get around to thinking about taxes, it could be too late to be proactive, and all you can do is close your eyes and write that check! By taking a look at your financial situation now, you may be able to take advantage of some tax saving strategies before the end of year to improve your tax outcome.