Take a look at our June newsletter!
You’ve Been Working for Uncle Sam All Year — Until Now
“It’s a reminder of how heavily we’re taxed and how crucial it is to have strategies in place if you ever find yourself in the IRS crosshairs.”
Every year, there’s a little-known milestone that marks a significant point in our financial calendar: Tax Freedom Day. If you’ve never heard of it, you’re not alone — but once you understand what it represents, it all makes sense! Tax Freedom Day is the hypothetical date (as a nation) when we’ve all earned enough money to cover all of our tax obligations for the year — federal, state, and local. Think of it this way: From Jan. 1 to Tax Freedom Day, every dollar you make essentially goes toward Uncle Sam. Everything you earn after that date is yours to keep. But remember, this is only hypothetical. It’s a symbolic way to show how much of your income is consumed by taxes. And the day isn’t set in stone. It changes yearly depending on average income levels and the country’s overall tax burden. The more taxes we collectively pay, the further into the year Tax Freedom Day gets pushed. For example, in 2019, it fell on April 16 — just after we filed our taxes for the previous year. Here’s where things get interesting. While most people only think of Tax Freedom Day in the traditional sense, when you’ve paid your share of annual taxes, there’s another version worth knowing, especially if you’re struggling with tax debt. From a tax resolution standpoint, Tax Freedom Day can mean the day you’re finally free from tax debt. That freedom can come in a couple of ways. Offer in Compromise (OIC) This is a formal agreement with the IRS in which you settle your tax debt for less than what you owe. But
here’s the kicker: OICs are incredibly difficult to qualify for — nearly 67% of applicants are rejected. The IRS uses a strict formula based on your income, assets, and future earning potential to decide whether to accept your offer. Statute of Limitations Believe it or not, the IRS doesn’t have to collect on back taxes forever. There’s generally a 10-year statute of limitations. If that time runs out before the IRS gets what they’re owed, you’re off the hook. Sometimes, just staying on a minimal payment plan can buy you enough time to cross the finish line. Here’s a story to put things in perspective. A client once owed the IRS a whopping $372,000. He owned a successful construction business, but after a serious accident left him disabled, he lost the ability to work and, thus, the ability to pay. A traditional resolution wasn’t feasible, so a $54/month payment plan was set up. After enough time had passed and the statute of limitations had expired, he only paid around $1,800 in total. The rest was gone. That was his version of Tax Freedom Day — and it was life-changing. So, whether you’re just curious about where your money goes or you’re facing a mountain of tax debt, understanding Tax Freedom Day offers some serious food for thought. It’s a reminder of how heavily we’re taxed and how crucial it is to have strategies in place if you ever find yourself in the IRS crosshairs. And, honestly, it’s a bit sobering to realize that, in some years, almost 40% of your income might go toward taxes. That’s why Tax Freedom Day is more than just a date on the calendar — it’s a symbol of your financial reality and, potentially, a goal to work toward if you’re navigating a tax resolution. -Ben Golden
JUNE 2025
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Summer’s here, and if you’re lucky, your work trip may take you somewhere sunny. Whether you’re heading to a conference or squeezing in a client meeting while visiting family out of state, business travel during this time of year can be both productive and (let’s be honest) a little fun. But when it comes to your taxes, it’s important to know what qualifies as a legit deduction — and what the IRS might consider a vacation. What counts as business travel? The IRS allows deductions for “ordinary and necessary” business expenses, including travel. If your primary purpose for the trip is business, you can generally write off things like airfare, hotels, car rentals, taxis or rideshares, meals (50%), and even baggage fees. But (and it’s a big but), the trip has to be mainly for work. Here’s What the IRS Nee Mixing Work and Va
College is supposed to be a time of growth, learning, and opportunity, but what happens when a student doesn’t have a place to sleep at night? In Los Angeles, a significant number of college students face housing insecurity, which can make earning a degree and achieving career goals very difficult. Often, students must choose between continuing their education or covering their basic needs, but the Dunamis House is stepping in to change that. The Reality of Student Homelessness When people think of homelessness, they rarely picture a young college student balancing coursework and multiple jobs. However, statistics show that housing insecurity is a major problem for today’s youth. The high cost of rent combined with a lack of financial resources put many at risk. Today, more than half of the 220,000 students enrolled across nine Los Angeles Community College District institutions are experiencing housing insecurity. Nearly 1 in 5 are homeless. Without support, these students can struggle in school and enter a cycle of poverty that is difficult to break. How the Dunamis House Is Making a Difference Led by the nonprofit Los Angeles Room & Board, the Dunamis House opened in 2023 in a historic building that once housed Japanese Americans working to rebuild their lives following World War II. Today, the group residential facility provides housing for 40 Los Angeles college students ages 18–24 at risk of homelessness. In addition to free, stable housing, Dunamis provides community support to help residents overcome challenges in school and life. Residents can access nutritious meals, tutoring services, and job training programs. Rather than providing short-term relief, the focus is on helping students become more self-sufficient to achieve long-term success. Los Angeles Room & Board allows residents to live at Dunamis for up to three years. Residents can then transition into one of the nonprofit’s other homes, where they can continue working toward their goals while paying subsidized rent. The housing, support, and stability provided by Dunamis and associated programs provide many with precisely what they need to finish their studies, secure stable employment, and break free from the cycle of poverty. THE DUNAMIS HOUSE Turning the Tide on Student Homelessness
Let’s say you fly to a two-day business conference in Miami and decide to stick around for the weekend. As long as most of the trip was work-related, your flight and the business
portion of lodging and meals may be deductible. However, any extra beach days will be on you!
Here are some tips to keep in mind.
Keep it documented.
Save your receipts,
conference agendas,
TERIYAKI BEEF SKEWERS Inspired by AllRecipes.com
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eds to See acation?
WIN OF THE MONTH Tax Win! $57,167 Settled for Just $100 Through Offer in Compromise
meeting notes, or emails that show the business purpose. If the IRS asks, you’ll want to prove it wasn’t just a cleverly disguised vacation.
Split costs wisely. If you bring a spouse or friend, only your expenses are deductible — not theirs. The same goes for shared hotel rooms or rental cars. Track your share separately. Work first, play later. If your trip includes personal days, try to book work meetings at the beginning and end. That way, the IRS is more likely to view it as a business trip with personal time added, not the other way around.
Stay reasonable. Lavish expenses won’t fly. Keep expenses within a reasonable range. Don’t buy first-class tickets or five-star suites unless they are necessary for your business needs.
The bottom line is that you can absolutely mix business with a bit of summer fun — just be smart about it. When in doubt, reach out to us! With the right planning, you can make the most of your business trip and keep Uncle Sam happy.
CASE SNAPSHOT Client: Business Owner Type of IRS Issue: Personal Income Tax Years in Question: 2015–2018 Total IRS Liability: $57,167.44 Savings Secured: $57,067.44
INGREDIENTS
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1 1/2 cups light brown sugar
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3 large garlic cloves, chopped
1 cup soy sauce
1/2 cup pineapple juice (optional)
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4 lbs boneless round steak, cut into 1/4-inch-thick slices Bamboo skewers soaked in water
From $57K to $100!
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1/2 cup water
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1/4 cup vegetable oil
We’re thrilled to share a major success story from our tax resolution team.
DIRECTIONS
Our client, who owned a martial arts dojo structured as an S corporation (Form 1120S), faced serious personal income tax debt. Due to the flow- through nature of their business, they were on the hook for $57,167.44 in federal income taxes from 2015 through 2018. With no major obstacles in our way, our team went to work and secured an Offer in Compromise with the IRS, settling the full liability for just $100. That’s a savings of $57,067.44! This case is a powerful reminder that even when personal tax problems stem from business income, there’s always a path to relief with the right team in your corner.
1. In a large bowl, whisk brown sugar, soy sauce, pineapple juice, water, vegetable oil, and garlic together. Drop beef slices into the mixture and stir to coat. 2. Cover bowl with plastic wrap and marinate in the refrigerator for 24 hours. 3. Remove beef from marinade, shaking to remove excess liquid. 4. Thread beef slices on skewers in a zig-zag pattern. 5. Preheat grill to medium heat and lightly oil the grate. 6. Cook beef skewers for about 3 minutes per side until the meat is cooked through.
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1 Tax Freedom Day Isn’t Just a Date, It’s a Wake-Up Call 2 The Home Giving Students a Future The Do’s and Don’ts of Deducting Summer Business Travel 3 Teriyaki Beef Skewers Win of the Month 4 Weddings, Birthdays, and Baby Showers — Oh My! INSIDE THIS ISSUE
Say Yes to the Celebration, Not the Overspending Celebrate Your Loved Ones Without Breaking the Bank
When wedding season rolls around and birthday invites start stacking up, it’s easy to feel like your wallet is under attack. Between flights, gifts, and party attire, the cost of celebrating your loved ones can add up fast. But with planning and savvy spending, you can still show up for the big moments without blowing your budget.
weddings, birthdays, baby showers, and graduations you hope to attend. Once you see them all in one place, estimating your total spending is easier. Set a realistic budget for each event, and don’t forget to factor in travel, gifts, and attire. Always do your research and verify prices for flights, hotel rooms, and registry gifts. Cut costs without cutting fun. Once you have a budget, look for ways to trim expenses without missing out on the fun. Instead of buying a new outfit for every event, consider re‑wearing something you already own or borrowing from a friend. If travel is involved, check if you can split an Airbnb or crash on a friend’s couch. Be honest about your budget. Money can be a tricky subject, but being upfront about your financial situation can help you avoid unnecessary stress. If an event is out of your
budget, have an honest conversation with the host. Most people will be understanding and actually appreciate your transparency. Be sure to express gratitude and excitement for their big day, even if you can’t be there in person. Stay connected in creative ways. Just because you can’t attend doesn’t mean you can’t celebrate! Send a thoughtful gift within your budget, offer to help with planning, or schedule a video call to toast their milestone. Your presence matters more than your presents, and true friends will appreciate any effort you make to share in their joy. Ultimately, celebrating your friends and family shouldn’t come with financial stress. The best memories don’t come from the most expensive gifts or the fanciest flights. They’re built on laughter, love, and the moments you share, no matter what that looks like.
Plan ahead like a pro. Before you say “yes” to every invitation, take a moment to map out your year. Write down
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