Logan Financial Services Corp.

A sole proprietor is someone who owns an unincorporated business by himself or herself. However, if you are the sole member of a domestic limited liability company (LLC), you are not a sole proprietor if you elect to treat the LLC as a corporation.

Quick Tip: While the amounts contributed into these retirement savings accounts are taxed, any earnings made on the contributions are tax free for federal income tax purposes as long as holding period and distribution rules are followed.

Fast Fact: Up to $250,000 ($500,000 for married filing jointly) of capital gains on a sale of your principal residence can be tax free.

The federal government does not tax municipal bond interest. This includes bonds issued by a state or municipality. The tax-free benefit increases the higher your income, but caution must be taken to ensure the underlying municipality is not in dire financial condition.

Having a business plan is necessary for survival in today's competitive business environment. A written business plan is as essential for a small business as it is for large corporations. A good business plan will help you focus on current and potential problems and assist you, your advisors, and employees in improving net profit.

Your home. Your office. Are they one and the same? If so, you may be able to take a home-office deduction that can save income and self-employment taxes. The deduction gives you the opportunity to claim expenses related to the business use of your home, such as utilities, repairs, and insurance. Meet the requirements, and you're eligible whether you rent or own your home. Taxpayers who qualify may use a simplified deduction calculated at $5 a square foot for up to 300 square feet of an area in a home that is used regularly and exclusively for business. The deduction is capped at $1,500 a year.

2021 HSA contributions numbers for an individual with family coverage under a qualifying high-deductible health plan (deductible not less than $2,800) can contribute up to $7,200 up $100 from 2020 for the year. The maximum out-of-pocket has been capped at $14,000.

Getting Married Soon? Your tax liability will likely change when you marry, divorce, or become a widow. Newlyweds may face higher taxes due to the so-called marriage penalty. In either case, you may need to change your income tax withholding or estimated tax payments.

Mileage rates for travel are now set for 2021. The standard business mileage rate decreases by 1.5 cents to 56 cents per mile. The medical and moving mileage rates also decrease by 1 cent to 16 cents per mile. Charitable mileage rates remain unchanged at 14 cents per mile.

Common Deductions To Remember: Home office. If you have a qualified home office, it also creates a deductible expense. There is also a safe harbor home office simplified calculation that makes it easy to get this tax deduction.