Most taxpayers think about audits only after an envelope from the IRS shows up. By then, the outcome is already largely decided — not by what you say to the examiner, but by what records you kept two or three years ago. An audit is not an accusation. It is a request to prove what you reported. Taxpayers who lose audits usually did not cheat; they simply cannot substantiate a deduction they were entitled to, or they cannot explain a bank deposit that was never income in the fi

Here is the good news first: if your parents overseas send you money, or a relative abroad leaves you an inheritance, you generally do not owe U.S. income tax on it. A gift is a gift.

When a business owner sells, the headline number is the purchase price. The number that actually matters is what’s left after tax, and that depends less on the price than on how the price is characterized. Two sellers can close identical $2 million deals and walk away with after-tax proceeds that differ by tens of thousands of dollars, simply because one negotiated the allocation and the other signed whatever the buyer’s attorney drafted. In an asset sale, the IRS doesn’t see

Opening an IRS notice and seeing a penalty tacked onto your balance is stressful, whether it’s on your personal return or your company’s. The good news: many penalties aren’t final. The IRS has formal relief programs that can remove late-filing, late-payment, and late-deposit penalties, sometimes with a single phone call. This process is called penalty abatement, and knowing the basics can save you hundreds or even thousands of dollars. What Is Penalty Abatement? Penalty abat

“I moved back home, so I’m done with the U.S.” It is one of the costliest assumptions a green card holder can make. Leaving the country, letting the card expire, or shelving it in a drawer does not end your U.S. tax residency. Only a formal event does. Until then, the IRS still expects a return on your worldwide income, and sometimes years of back filings.

Most people think a charitable deduction comes from writing the check. To the IRS, it comes from the paperwork. A gift can be completely genuine and still be denied if you can’t prove it. With Giving Tuesday on December 1 and year-end about three months away, now is the time to set up your records, not next April. Step 1: Confirm the Charity Qualifies • Only gifts to qualified organizations are deductible. Check any charity you’re unsure about using the IRS Tax Exempt Org

A losing year in your business isn't just bad news to survive — it's a tax attribute to manage. Between basis limits, at-risk rules, passive activity restrictions, the excess business loss cap, and the net operating loss (NOL) rules that pick up whatever's left, a single loss can pass through four or five separate gauntlets before it actually reduces your tax bill. And thanks to the One Big Beautiful Bill Act (OBBBA), signed into law in July 2025, one of those gauntlets just

Selling a stock, a rental property, a piece of equipment, or shares in a small business? The sale itself is often the easy part — it's the reporting afterward that trips people up. Small errors on your tax return can lead to IRS notices, overpaid tax, or penalties that were entirely avoidable. Here are the most common asset sale reporting mistakes we see, and how to steer clear of them.

For business owners, estimated taxes are rarely a flat, once-a-quarter math problem. Between S-corp reasonable compensation, Schedule K-1 timing, seasonal revenue swings, and California's own overlay of rules, a generic “pay 25% each quarter” approach almost always gets it wrong — either tying up cash you need for the business or quietly building toward an underpayment penalty. This week, we're walking through how to build an actual estimated tax model instead of a guess.

A net operating loss (NOL) lets you carry a loss year forward to lower a future tax bill. The basic rule is the same for every taxpayer, but if you have foreign income, the loss can interact with your return a little differently. Here's the simple version.

Meeting a residency test in two countries is one problem. Having both countries actually assess tax on you as a resident, in the same year, is a different and more urgent one. When that happens, you're no longer just planning around the rules — you're in an active dispute, and the clock on how you respond matters as much as the facts themselves.

If you split your time between the U.S. and another country — or moved abroad but kept ties back home — you may meet the legal test for tax residency in both places at once. Dual residency is not automatically a problem, but it is a warning sign that your U.S. filing could be wrong if it is not addressed, and it can lead to the same income being reported as taxable in two countries with no relief unless you claim it correctly.

Every cross-border tax question eventually collapses into the same underlying issue: is this dollar of income U.S.-source or foreign-source? It sounds like a formality, but the answer drives some of the most consequential numbers on an international return — the foreign tax credit limitation under IRC §904, whether a nonresident alien owes U.S. tax at all under §871 or §882, which income falls into which FTC “basket,” and how a tax treaty's sourcing tie-breakers apply.

If you're a U.S. person receiving income from abroad, or a foreign person earning income connected to the U.S., withholding rules can catch you off guard. Getting the basics right now can prevent notices, penalties, and cash-flow surprises later.

Internal structure in CFCs If you're a U.S. person who owns (or has a stake in) a company incorporated outside the United States, three terms should be on your radar: Controlled Foreign Corporation (CFC), Subpart F income, and GILTI. These rules exist to prevent U.S. shareholders from parking profits offshore indefinitely — and they can generate a current U.S. tax bill even if you never see a dividend from the foreign company. This week, we're breaking down how these three pi

If you're holding Bitcoin, Ethereum, or other digital assets on an exchange based outside the U.S. — Binance, a Hong Kong or Singapore-based platform, or an exchange tied to your home country — you may be sitting on a reporting obligation you haven't thought about. Crypto feels borderless, but the IRS and FinCEN don't see it that way. Where your exchange is legally domiciled matters, and getting it wrong can mean penalties that have nothing to do with whether you owed any tax

Putting your spouse, child, or parent on the payroll is one of the most common — and most misunderstood — small business tax moves. Done correctly, family employment can shift income to lower tax brackets, unlock retirement plan contributions for a minor, and even eliminate certain payroll taxes entirely. Done carelessly, it's one of the fastest ways to draw an IRS examination, because the family relationship itself is a built-in audit flag.

Own a condo in Manila, a flat in London, or a rental house in Guadalajara? If you're a US citizen, green card holder, or resident alien, the IRS wants to hear about the rent you collect on it — no matter where that property sits or what currency the rent shows up in. Here are the basics of reporting foreign rental income correctly, so a straightforward income stream doesn't turn into a compliance headache.

Estimated taxes aren't just an IRS formality — they're one of the simplest tools you have to stay ahead of your tax bill instead of chasing it. Here's why we bring this up every quarter, plus a quick quiz to see where you stand.

Passive activity loss rules quietly limit how much rental and passive losses you can deduct each year. This week's Tax Tip Tuesday breaks down the income phase-outs, Real Estate Professional Status traps, and documentation gaps that turn a legitimate loss into an audit flag.