Let’s face it, another big factor for many people moving to Idaho is the price of a home. The cost of living in Idaho is lower in most cases than the national average.
The housing market has healed very well in Idaho making it a beneficial market for buyers.
There isn’t a large city culture here in Idaho, but there are city amenities. If you like to be near a nice downtown area with good shopping and great places to eat, then Idaho’s own capital city Boise is where you need to be.
Boise and Coeur d’Alene Idaho are considered the fastest growing cities in ...
If you would like to save money on Idaho property taxes, you must first find ways to reduce the perceived value of your Idaho home and property. The only way to do this is by successfully arguing that your house isn’t worth as much as the government says it is.
Here are easy tricks to find ammunition to over-turn the higher assessed Idaho property value.
Tax Assessment Deadline. Tax assessments typically give you a measly 30 to 120 days to file your appeal.
How They Value. Some areas tax your Idaho home based on 100 percent of its value. While others assign a lower ...
Tricks High Earners Use
There is always something more that you could do to improve the overall experience for your Idaho vacation rental business guests. If your primary purpose is to obtain excellent reviews on an international vacation rental site, then you should strive to give your guest something they can’t get anywhere else.
Try to offer something unique to differentiate yourself from the other competition in Idaho: a meal to a restaurant, a free ride to a touristic sight, a jar of home-made cookies, locally grown coffee, towels ...
How to Protect Your Gambling Winnings from the IRS
Your gambling income is taxable and it’s reportable by the casino. The good news is that you can offset your gambling winnings with your gambling losses provided you keep good proof of those losses.
The IRS and courts expect you to maintain a “contemporaneous gambling diary.”
You face specific rules for a gambling diary depending on the type of gambling.
For example, with slot machines, the IRS advises that you record the:
and time played to support your winnings or losses
Here are three basic tax rules on gambling that every winner should know who gambles in an Idaho Casino.
Rule 1: Your Idaho winnings are taxable. Your gambling income is taxable. And are often times reported.
The Idaho casino must report your winnings on Form W-2G and send a copy to you and the government. The government knows when you don’t report enough gambling income on your Idaho tax return.
Rule 2: Keep records of your losses while in the casinos. You can offset your Idaho gambling winnings with your gambling losses. To do this you must keep good proof of ...
Too often Idaho businesses get trapped into equating sales with profits. Yet there are many other ways you can dramatically increase your profitability.
Underpricing Kills Profits
Many small Idaho businesses have thinner profit margins than larger firms because they tend to underprice their products or services.
Many people will choose to pay a higher price for products or services because they are local and from a smaller business that cares.
Always find ways that make your Idaho business better than large national companies and increase your price to ...
Whether you work for yourself as an Idaho business, or as an employee, reducing your tax liability is crucial for your financial success. Massage therapists in Idaho can take advantage of several tax deductions.
Supplies like massage tables, towels, oils, warmers, sheets, blankets, robe, and any other items you have purchased for regular use in your Idaho business can be deducted.
General Business Expenses
Idaho Business expenses such as the rent, utilities, licenses, water service, commissions, computer, appointment setting, and accounting software ...
Here’s a good Idaho business rule to follow: buy low and sell high.
That’s good, but the three-step process below is even better:
Depreciate to zero.
And you can accomplish this by using antiques in your Idaho business.
If you can purchase antiques rather than new or lightly used, you can add to your net worth. Many Idaho businesses are buying cars, clock, rug, desk, cabinet, bookcase, paperweight, conference table, chair, umbrella stand, coatrack, library table, or other asset that will function in their business just as well as a ...
As you know, whether traveling for your Idaho business or pleasure, you need a valid passport for most trips outside the United States. These days, you even need a passport to fly to and from Canada or Mexico. US citizens and residents are now finding out the heavy implications of this new law.
This law requires and/or authorizes the State Department to deny, revoke, or limit your passport if you have “seriously delinquent tax debt.”
You have seriously delinquent tax debt if:
the amount you owe exceeds $50,000, including interest and penalties;
the IRS has ...
The new tax reform put the screws to your Idaho state and local income tax deductions. Many states including Idaho have been putting together workarounds with little success.
But now the IRS is creating regulations to put the kibosh on your state’s creative plans.
In the absence of federal lawmakers changing their minds, your federal deductions for Idaho state income taxes face that $10,000 ceiling.
But you have planning opportunities to make more of your Idaho property taxes deductible by:
creating or enlarging an Idaho home office business
Following these three rules can make tax time in Idaho state less stressful and help you avoid overpaying the IRS. Start by picking up a file box, tote or filing cabinet. Label files based on the following groups below.
Gather your Idaho tax records all year.
Collect all forms, receipts, financial reports from banks, Idaho or out-of-state investments, Idaho business expenses, education cost, and mortgage interest statements to name a few. File daily if possible.
Group records by how you file.
Most documents will fall under one of these categories; income, ...
Idaho Tax Preparation Fees
Your Idaho business can deduct the cost of tax preparation in Idaho. If you paid taxes and used a credit or debit card to do so, you can also deduct convenience fees.
Hobby expenses can be claimed as “other miscellaneous deductions.” However, you can only deduct as much as you made in income from your hobby in Idaho.
Personal Legal Bills
Personal legal bills in Idaho are considered “other miscellaneous deductions”. You can deduct your legal fees as long as the lawyer is pursuing taxable income on your behalf, ...
Entertainment That Survived Tax Reform
You may no longer deduct directly related Idaho business entertainment.
Common Idaho business entertainment that are no longer deductible include business meals with clients or prospects, golf, football games, and similar business-building activities.
The good news is that tax code Section 274(e) allows you to deduct:
entertainment, amusement, and recreation expenses you treat as compensation to employees and that are included as wages for income tax withholding purposes;
expenses for recreational, social, or similar ...
The recent tax reform, known as the Tax Cuts and Jobs Act (TCJA), added some good benefits to your Idaho real estate rentals, both commercial and residential.
Notably, your qualified Idaho business income from your real estate rentals creates a possible 20 percent tax deduction with no effort on your part.
And if you want less taxable income, the TCJA gives you enhanced bonus depreciation and new avenues for Section 179 expensing.
New Deduction for Idaho LLC’s and Sole Proprietor Income
Under prior law, if you had net taxable income from a pass-through Idaho ...
If you’re considering starting or purchasing an Idaho franchise business do a generous amount of research on your own before contacting the few that you like.
A franchise’s goal is to sell you their brand and business model, so that you make sales, and they take a cut (royalties). In addition, you may also have to exclusively purchase all supplies from them regardless of their prices.
A franchise can be a great business if there is enough name recognition, national or local branding, along with a solid and proven business model. Idaho businesses commonly struggle ...
If your Idaho pass-through business is an in-favor business and it qualifies for tax reform’s new 20 percent tax deduction on qualified business income, you benefit at all times, including being above, below, or in the expanded wage and property phase-in range. A pass-through entity is a business formation where its profits and losses get passed directly to your personal tax return.
On the other hand, if your Idaho business is a specified service trade or Idaho business (doctors, lawyers, accountants, actors, athletes, traders, etc.), it is in the out-of-favor group ...
Tax reform has had a significant impact on the tax deductions you can now claim for your Idaho business entertainment and meals.
The chart below shows you how the Idaho Tax Cuts and Jobs Act treats 12 meal and/or entertainment events.
Amount Deductible for Tax Year 2018
Meals with clients and prospects
Entertainment with clients and prospects
Employee meals for convenience of employer
Employee meals for required business meeting
To maximize your tax savings, check your eligibility for Idaho tax credits.
Tax credits directly reduce your tax bill dollar for dollar
While deductions reduce your taxable income and therefore save money in proportion to your tax rate
Refundable credits vs. non-refundable
Refundable credits are even more valuable, as you can receive the credit even if it's beyond the amount of taxes that you owe.
Non-refundable credits are good only up to the total limit of taxes that you owe.
Earned income tax credit (EITC)
Not only is it a refundable tax ...
A limited liability company is a form of Business Entity. LLCs are popular because:
Like a corporation, the Idaho LLC's owners have limited personal liability for the debts and actions of the LLC; and
Like a Partnership, an Idaho LLC is a Pass-through Entity for federal tax purposes, i.e., it automatically avoids Double Taxation.
Owners of an Idaho LLC are called members. Since most states do not restrict ownership, members may include individuals, corporations, other LLCs and foreign entities. There is no maximum number of members. Most states also permit ...
What is Listed Property in Idaho?
Listed property is a category of property, that tax law gives unfavorable treatment by limiting tax benefits and imposing tough requirements on your Idaho business.
For example, if you don't use listed property more than 50 percent for business, you must use the low-and-slow Alternative Depreciation System.
Types of listed property include:
Passenger automobiles and other property used as a means of Idaho transportation
Property generally used for entertainment, recreation, or amusement
Any computer or peripheral ...
Can I switch Later?
There are two answers.
If you are an Idaho LLC being taxed as a Sole Proprietor, or a Partnership, then yes you can opt to elect an Idaho S-Corporation or C-Corporation later down the road as you grow.
However, if your LLC has already selected to be taxed as a Corporation, then a switch to a Sole Proprietor, or a Partnership would trigger the liquidation of your company’s stock. This could also be a red flag to the IRS who may believe that you are making the conversion for tax related reasons.
An LLC that has elected to be taxed as a ...
To grasp the importance of the new Idaho LLLP business you must first understand the problem that it solves.
We must first begin with describing the limited partnership (LP). The LP is a type of partnership that has one or more general partners, and one or more limited partners.
The general partners manage the LP, while the limited partners are only involved financially and are excluded from management.
A major disadvantage is that general partners are severally liable for the partnership’s obligations, although limited partners are protected.
Heavy Vehicle + Deductible Home Office = Major Tax Savings
Your Idaho business can reap major tax savings with the heavy vehicle and home-office combo. The heavy vehicle produces quick deductions.
The home office that qualifies as a principal office eliminates commuting miles, and such an elimination can dramatically increase your business-use percentage of vehicles.
For example, say you bought a $50,000 vehicle that you use 60 percent for business. Your depreciation and expensing elections apply to $30,000. But if you can increase your business ...
When an Idaho business provides an employee or a partner with a smartphone or similar equipment primarily for non-compensatory Idaho business reasons, the following things happen:
The Idaho employee’s or Idaho partner’s business use is a working condition fringe benefit that is excludable from income.
The Idaho employee’s or Idaho partner’s personal use is excludable from income as a “De Minimis” fringe benefit.
The Idaho employee or Idaho partner does not have to keep records of Idaho business use.
The tax code nondiscrimination requirements do ...
Physical or material participation is a key element of the Passive Activity Rules. Under the passive activity rules, you cannot apply losses from one business against income from another business unless you materially participate in each Idaho business.
You materially participate in an activity if you are involved in the operation of the activity on a basis which is:
IRS regulations have detailed tests for determining material participation in any of your Idaho businesses.
Under the two most straightforward ...
When the IRS begins an audit, the mileage log often creates the first impression of your Idaho business tax records. Whether you use the IRS mileage rate method or the actual expense method, you need a written record that proves your Idaho business percentage of use.
The IRS three-month sampling record is the preferred choice:
With this method, you keep a mileage log for three months and then apply that three-month Idaho business percentage to either the miles you drove for the year (mileage method), or the expenses you incurred for the year (actual ...
In many cases the government hits your lawsuit award or settlement with the double whammy of:
a tax bill on the gross dollar amount of the award or settlement and
a reduction to or even elimination of your legal fees tax deduction.
If you win your case and are an Idaho resident, you can’t make the taxable part of the award disappear if the award isn’t due to a physical injury or illness.
But with some tax planning, you can increase the possibility of turbocharging your legal deductions. To make this happen, you need to qualify the Idaho legal ...
The cost and maintenance of your work clothes can be a valid tax write off. The IRS you’re your Idaho business deduct the cost of your work clothes, shoes and protective gear, plus the cost of maintenance such as laundry, dry cleaning, repairs and replacements.
Deduct Clothing for Idaho Business Taxes
This could be a huge deduction for many Idaho businesses.
For your clothing, shoes and gear to legally be qualified for this tax deduction they must follow the 3-part test.
You wear clothing with a business logo, uniform or specialty clothing like scrubs.
Use the Foreign Earned Income Exclusion (FEIE)
The Foreign Earned Income Exclusion (FEIE) is one of the easiest ways Idaho expats can save on taxes. FEIE allows you to exclude roughly the first $100,000 of foreign earned income, and double that for those married couples filing a joint tax return,
Must be eligible for one of two residency tests:
Physical Presence Test: You live abroad for 330 out of a 365-day period.
Bona Fide Residence Test: You must live outside the US for a full calendar year, with no intention of returning to the US to live in the foreseeable ...
Idaho business travel expenses may include:
bagging and shipping
meals and lodging
These types of costs are “reasonable and necessary” for conducting your Idaho business.
Your deduction for meals while traveling is limited to 50 percent.
50 percent limit also applies to meals constituting Entertainment Expenses.
If your trip is part business and part personal, expenses for personal activities are not deductible.
but you can deduct the costs of getting ...