Taylor, Miles & Associates, P.A.

10/26/2026

If you refinanced a rental property and took cash out, or if you plan to do so, how you spend that money determines whether you can deduct the interest.

Tax law follows the money, not the property securing the loan.

If you use the refinancing cash for personal purposes, the interest on that portion is non-deductible personal interest even though your rental secures the loan. The part of the loan that replaced your original rental mortgage remains rental debt, and that interest stays deductible.

There is good news. IRS rules require that principal payments pay off the personal portion of a loan first. Every principal payment you have made after the refinance reduces the non-deductible portion before touching the rental portion.

Once you have repaid an amount equal to the personal cash-out, the entire remaining balance is rental debt again. If you refinanced in a prior year, you may have been deducting too little interest.

If you refinance in the future, take these steps:

• Deposit the proceeds in a new, separate account, and spend directly from it for the intended purpose.
• Avoid depositing loan proceeds into your existing checking account. Under IRS rules, the IRS treats any spending from that account as coming from the loan proceeds first, which can turn deductible interest into personal interest.

10/15/2026

If you are married and plan to sell your home, you may be able to exclude up to $500,000 of gain from tax. The length of your marriage does not matter.

To claim the full $500,000, you need the following:

• A joint tax return for the year of the sale
• At least one spouse who owned the home for 24 of the 60 months before the sale
• Both spouses to have lived in the home as their main residence for 24 of those 60 months
• No home sale exclusion claimed by either spouse in the prior two years

If your spouse lived in the home before the wedding, that time counts. You can even marry after the closing, as long as you file jointly for that year.

If only one spouse meets the residence test, the exclusion drops to $250,000. If your spouse is a few months short, delaying the closing could save tax on up to $250,000 of gain.

A surviving spouse who has not remarried can keep the $500,000 exclusion for sales within two years of the spouse’s death.

The limits remain $250,000 and $500,000 for 2026. Congress has pending bills to raise them, but none have passed.

10/07/2026

The IRS has launched their new mobile app, IRS2Go. It is available through the Apple App Store and Google Play. Taxpayers can now securely sign in to the official IRS app and access selected account information through the app. Please visit the IRS website at IRS.gov or click the link below for additional information on the app.
**** The IRS warns,” Taxpayers should use verified IRS links or the official IRS app listings in the Apple App Store and Google Play and be cautious of look-alike apps, advertisements and unsolicited messages claiming to provide access to IRS accounts.”
https://www.irs.gov/newsroom/irs-launches-new-mobile-app-expanding-digital-services-for-taxpayers
The IRS also provides a page with common questions and answers, a YouTube video, and a list of services available through the app. The link is below or it can be accessed through the IRS website.
https://www.irs.gov/help/app

Download the official IRS app. See your balance due, make a payment, check your refund and more. All in the IRS app.

09/30/2026

Prost, Y'all! Oktoberfest is almost here!
We're excited to help spread the word about the Summerville Oktoberfest, hosted by the Summerville Evening & Oakbrook Breakfast Rotary Club! Our CPA, Dawn Mayers, is a proud member of the Oakbrook Breakfast Rotary Club, and we love supporting the great work they do in our community. So, this Saturday from 12:00 to 6:00 PM come out to Hutchinson Square and enjoy some family fun, food trucks, and other Oktoberfest festivities! Admission is FREE!

09/22/2026

Losing a spouse is difficult, and taxes are likely the last thing on your mind. But the tax consequences arrive on a delayed schedule that creates a valuable planning window—one that closes quickly if no one is watching.
Here is the timeline: For the year when your spouse dies, you may still file a joint return covering the entire year. If you maintain a household for a dependent child and do not remarry, you may file as a qualifying surviving spouse for the next two years, keeping the joint brackets and the joint standard deduction. After that, you file as a single taxpayer.
That final step is where the “widow’s penalty” hits. Single-filer brackets sit at roughly half the joint thresholds, so the same income produces a much larger tax bill. On $400,000 of taxable income, filing status alone can cost about $27,500—every year going forward. Your standard deduction drops by more than half, and the senior bonus deduction can shrink or disappear entirely because its phaseout thresholds also fall.
Medicare follows two years later. Your premiums for any year depend on the income and filing status you reported two years earlier, so the surcharge increase from single status shows up later than you would expect.
While the joint-filing window stays open, several moves deserve attention, such as Roth conversions at the wider joint brackets, capital gains harvesting, and date-of-death valuations to capture the basis step-up before records go cold. If your income drops after the death, Form SSA-44 can lower your Medicare premiums early—but it does nothing about the lower single-filer thresholds.

09/09/2026

If you have children and you own a business, here is a strategy worth your attention: hire them.
Consider one example: A business owner pays her 13-year-old $16,100 in 2026 to work in her Schedule C business. The child owes zero federal income tax because the 2026 standard deduction for a single taxpayer is $16,100. Meanwhile, that $16,100 wage deduction reduces federal and state taxes and puts roughly $6,614 back in the owner’s pocket.
The family keeps the full $22,714 (child has $16,100, the owner has $6,614).
You can go further. Add a $7,500 deductible traditional IRA contribution to the child’s wages of $16,100, and the child can earn $23,600 with no federal tax at all. Better yet, if the wages stay at or below the standard deduction, put the money in a Roth instead—a deduction is worth nothing to a child paying zero tax, whereas the Roth grows and comes out tax-free.
Your choice of operating entity matters. In a proprietorship or a spouse-only partnership, wages to your under-age-18 child escape Social Security and Medicare tax, and wages to a child under age 21 escape federal unemployment tax. A corporation gets no such break, which costs the family roughly $2,500 on $16,100 in wages. Even so, this is a valuable strategy for the family with the corporation.
One caution on Section 199A: Wages to your child reduce your qualified business income and shrink that deduction. But if your income is high enough that the W-2 wage limitation applies, the wages can actually increase your deduction.
Finally, do the paperwork. One attorney lost nearly all her wage deductions and drew negligence penalties because she had no W-2s, no payroll records, and no time sheets. Pay by W-2 payroll check, require a time sheet, and document a reasonable rate of pay.

09/03/2026

Our office will be closed on Monday, September 7th, in observance of Labor Day. We will reopen Tuesday at 9:00 AM and look forward to serving you!
We hope everyone has a safe and enjoyable Labor Day!

08/27/2026

The home-office deduction can produce substantial tax savings, especially when it converts what would otherwise be commuting miles into deductible business mileage. But many business owners accidentally put this valuable deduction at risk.

If you use your home office for more than one purpose, each use must qualify under the tax rules. A single non-qualifying use can jeopardize the deduction.

One of the biggest traps involves W-2 employment. Federal law now permanently denies employees a home-office deduction on their personal tax returns. That means if you use the same office for both your self-employed business and your W-2 job, your employee use can threaten the deduction for your business.

The same caution applies if you operate multiple businesses from the same office. Each business must independently qualify for the home-office deduction. Likewise, if you share the office with your spouse, your spouse’s use must also qualify—unless you split the room so each spouse uses a separate portion exclusively.

If your business operates as either an S or a C corporation, there is still a way to benefit from a home office. Rather than claiming the deduction personally, the corporation can reimburse your home-office expenses through an accountable plan.

The consequences of losing the home-office deduction can extend beyond the office itself. You may also lose valuable business mileage deductions if the IRS reclassifies your trips as non-deductible commuting.

08/20/2026

The IRS has made some enhancements to the paid family and medical leave tax credit. Click the link below for more information.

Tax Tip 2026-64, Aug. 20, 2026 — Employers, including small businesses, that provide paid family and medical leave to their employees may be eligible for an employer tax credit.

08/11/2026

If you’re planning to sell highly appreciated real estate, a closely held business, or private company stock, don’t let the tax consequences become an afterthought. There may be a way to defer the capital gains tax for years—even decades—but only if you plan before the sale.

One strategy worth considering is a deferred sales trust. Instead of selling your asset directly to the buyer, you first sell it to an independent trust in exchange for an installment note. The trust then completes the sale to the buyer. Because you receive payments over time rather than all at once, you generally pay the capital gains tax as those payments are received.

The biggest advantage is that the full pre-tax sale proceeds can remain invested instead of immediately being reduced by taxes. That allows more money to compound over time and may provide a steady stream of retirement income.

Unlike a Section 1031 exchange, a deferred sales trust does not require you to purchase replacement real estate within strict deadlines. It can also provide greater investment flexibility if you’re ready to move beyond real estate.

This strategy, however, is not for everyone. Because the IRS scrutinizes these transactions, they require careful planning before you sign a binding sales agreement, and the trust must be genuinely independent. In addition, unlike a 1031 exchange, a deferred sales trust generally does not preserve the step-up in basis that heirs may receive when appreciated real estate is held until death.