Qta Tax, Ltd - Tax Preparation Service

A: Not exactly. If you opt for the extended warranty on a vehicle you use 100% for business purposes, you still can’t deduct the full amount of the warranty in the year the car is placed in service. Instead, you must amortize the cost over the life of the warranty. Thus, the amount you can deduct is limited to the amount attributable to the year. For example, if you take out the warranty on October 1, 2025, you can deduct the amount allocable to the last three months of 2025. Tip: The deduction is reduced further if the car is also used personally.

A: Yes. However, unlike the penalty for failing to file a personal tax return, the penalty isn’t based on the unpaid tax amount. For S corporations, a penalty of $255 per shareholder per month is assessed for failure to file an S corporation return that is due in 2026, such as the 2025 return for a calendar-tax-year S corporation. However, the penalty cannot be assessed for more than 12 months. For example, the maximum penalty for a two-shareholder S corporation that fails to file its calendar-year 2025 return would be $6,120 (2 × $255 × 12). Ouch! Tip: Your state may also impose a penalty

A Maybe. If you itemize deductions, you can deduct unreimbursed medical expenses above 7.5% of your adjusted gross income (AGI). This includes home expenses for necessary treatment or alleviation of an illness or injury, such as wheelchair ramps, modified doorways and guardrails and support bars. However, if an improvement increases the value of the home, you can deduct only the difference between the cost and the increase in value. For instance, if an elevator costs $40,000 and increases the home’s value by $30,000, the deductible amount is limited to $10,000. Tip: The disabled family member must reside in the home.

A Maybe. If you itemize deductions, you can deduct unreimbursed medical expenses above 7.5% of your adjusted gross income (AGI). This includes home expenses for necessary treatment or alleviation of an illness or injury, such as wheelchair ramps, modified doorways and guardrails and support bars. However, if an improvement increases the value of the home, you can deduct only the difference between the cost and the increase in value. For instance, if an elevator costs $40,000 and increases the home’s value by $30,000, the deductible amount is limited to $10,000. Tip: The disabled family member must reside in the home.

A: It depends. As with most other qualified retirement plans, you must pay a 10% penalty tax, in addition to regular income tax, when you withdraw from a Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) before age 59½. However, there are several exceptions to the penalty, such as hardship distributions for medical emergencies or expenses of up to $10,000 for a first-time home purchase. Note: The penalty for early SIMPLE distributions within the first two years of participating in the plan is 25%, compared to the usual 10% penalty. After two years, the penalty declines to 10%. Tip: You have until October 1, 2025, to set up a SIMPLE for 2025.