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The Solution Center, Logan, NM (2026)

03/08/2026

The “Augusta Rule” – A Little-Known Tax Strategy for Business Owners

Did you know the IRS allows business owners to legally earn tax-free income by renting their own home to their business?

It’s called the Augusta Rule (IRC Section 280A), and it can create $14,000+ in tax-free income when used correctly.

How it works:

Rent Your Home to Your Business
Your business (LLC or corporation) can rent your personal residence for meetings, board meetings, planning sessions, or events.

Tax Advantage
• Your business deducts the rent as a legitimate business expense
• You do not have to report the rental income on your personal tax return if the home is rented for 14 days or less per year

Example
If your business rents your home for 14 days at $1,000 per day:
• Your business receives a $14,000 deduction
• You receive $14,000 in tax-free income

Important Requirements
• The meetings must be legitimate business meetings
• The rental rate must be reasonable and based on market value
• Meetings should be documented (agenda, attendees, notes)
• The rental cannot exceed 14 days per year

Important note: This is not an inherent LLC tax benefit. It is an IRS rule that can apply when businesses hold meetings at a personal residence.

When structured properly, it can be a simple strategy to reduce business taxes while creating tax-free income personally.

Always consult with your tax professional to ensure it is implemented correctly.

02/03/2026

Following are some tips for some of our more seasoned Taxpayers:

At age 73, your taxes are primarily affected by mandatory withdrawals from retirement accounts, potential "bonus" deductions, and the taxation of Social Security benefits. As of 2025, new legislation (the "One Big Beautiful Bill Act") and the SECURE Act 2.0 have introduced significant changes to tax planning for seniors.

Here are the key factors affecting your taxes at 73:
1. Required Minimum Distributions (RMDs)
The Rule: You are generally required to take annual RMDs from traditional IRAs, 401(k)s, and 403(b) plans starting the year you turn 73.
Tax Impact: RMDs are taxed as ordinary income.
Deadline: Your first RMD must be taken by April 1 of the year after you turn 73. Subsequent RMDs must be taken by December 31 each year.
Penalty: Failing to take an RMD can result in a 25% penalty on the amount not withdrawn (reduced to 10% if corrected promptly).
Exception: If you are still working, you may be able to delay RMDs from your current employer’s 401(k) until you retire, but this does not apply to traditional IRAs.
2. New 2025-2028 "Senior Deduction"
Enhanced Deduction: Beginning in 2025, you may be eligible for an additional "bonus" deduction of up to $6,000 per person ($12,000 for married couples filing jointly) if you are 65 or older.
How it Works: This is in addition to the standard deduction and the existing extra standard deduction for seniors.
Income Limits: The deduction begins to phase out if your modified adjusted gross income (MAGI) exceeds $75,000 for single filers or $150,000 for joint filers.
3. Increased Standard Deduction
Higher Deduction: Because you are over 65, you qualify for a higher standard deduction, reducing your taxable income.
2025 Amounts: In 2025, a single filer over 65 gets a $17,750 standard deduction ($15,750 base + $2,000 addition).
Married Couples: If both spouses are over 65, the 2025 standard deduction is $34,700.
4. Taxation of Social Security Benefits
Income Thresholds: Social Security can be taxed at any age if your total income (including 50% of your benefits) exceeds $25,000 (single) or $32,000 (married filing jointly).
RMD Impact: Because RMDs increase your total income, they can cause a higher portion of your Social Security benefits to become taxable.
5. Qualified Charitable Distributions (QCDs)
Tax-Free Donation: If you are 70½ or older, you can transfer up to $108,000 (in 2025) directly from your IRA to a qualified charity.
Benefit: This transfer is not included in your taxable income and can satisfy your RMD requirement.
6. IRMAA (Medicare Premiums)
Premium Surcharges: Your Income-Related Monthly Adjustment Amount (IRMAA) is based on your tax return from two years prior. High RMDs can increase your income, leading to higher Medicare Part B and Part D premiums.
7. Roth Conversions
Strategy: If you have a large traditional IRA, you might consider converting part of it to a Roth IRA. You pay taxes on the conversion upfront but eliminate future RMDs and taxes on that money.

12/31/2025

Just a little accounting humor to end 2025!

12/28/2025

TAX RELIEF FOR SENIORS: What’s New?

While Social Security benefits were not made completely tax-free, there is good news for seniors under the One Big Beautiful Bill.

Temporary tax relief for taxpayers age 65 and older
For tax years 2025 through 2028, seniors can claim an additional deduction of:
• $6,000 per person, or
• $12,000 for married couples filing jointly

Why this matters:
Even though Social Security benefits are still technically taxable, the Social Security Administration estimates that this added deduction will prevent 9 out of 10 recipients from paying federal income tax on their benefits — because it directly lowers taxable income.

Income limits apply:
• $75,000 for Single filers
• $150,000 for Married Filing Jointly

If you or a loved one receives Social Security, this change could significantly reduce — or eliminate — the tax impact on those benefits over the next few years.

Have questions about how this applies to your situation? As always, I’m happy to help you plan ahead and make the most of the tax laws.

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Logan, NM
88426

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Wednesday	9am - 5am
Thursday	9am - 5am

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