Michael Rose CPA PC

National Parents’ Day is this Sunday, which is news to most parents.

So no, the day will probably not put parents in the spotlight. But parenting is a 365-day job, and one piece of it gets quietly transferred whether parents are intentional or not: financial habits.

Some kids and grandkids absorb attitudes about earning, saving, and risk long before they understand the math.

A few questions worth asking before the next family gathering:

🔹 What do the kids and grandkids actually know about how the family operates financially?

🔹 What do we want them to understand about earning, saving, giving, and risk?

🔹 When was the last family discussion about money that was not about a specific bill or expense?

🔹 Is there a generational wealth strategy, and does the next generation know enough about it to carry it?

The families we see do this best hold a standing meeting once or twice a year, and summer is a perfect time!

Nothing formal. Just enough rhythm that the next generation knows what is being built and why.

𝗖𝗮𝗻 𝗜 𝗰𝗹𝗮𝗶𝗺 𝗮𝗻 𝗲𝗱𝘂𝗰𝗮𝘁𝗶𝗼𝗻 𝘁𝗮𝘅 𝗰𝗿𝗲𝗱𝗶𝘁 𝗳𝗼𝗿 𝗺𝘆 𝗴𝗿𝗮𝗱𝘂𝗮𝘁𝗲 𝘀𝘁𝘂𝗱𝗲𝗻𝘁 𝗶𝗳 𝗜'𝗺 𝗮𝗹𝗿𝗲𝗮𝗱𝘆 𝗰𝗹𝗮𝗶𝗺𝗶𝗻𝗴 𝗼𝗻𝗲 𝗳𝗼𝗿 𝗺𝘆 𝘂𝗻𝗱𝗲𝗿𝗴𝗿𝗮𝗱?

You can claim these education tax breaks across different family members on the same return. While you can't claim two credits for the same student in a single year, you can claim the American Opportunity Tax Credit for your undergraduate child while simultaneously claiming the Lifetime Learning Credit for an older child in graduate school.

Just make sure you avoid 529 plan double-dipping. The IRS strictly prohibits using the exact same dollar of tuition to justify both a tax-free 529 distribution and the Lifetime Learning Credit.

To get the full value of both incentives, follow this setup:
• Pay up to $10,000 in qualified graduate-school expenses with funds other than a 529 distribution to secure the 20% tax credit.
• Use tax-free 529 funds for other qualified expenses that aren’t being used to claim the credit.
• Avoid using 529 funds for every dollar of qualified tuition, or you may have no remaining expenses available to claim the credit.

Do you currently use a 529 plan to save for your family's higher education expenses?

Summer with kids is not cheap.

And camp is often one of the biggest line items!

But did you know you may be able to use a Dependent Care FSA for day camp costs?

What qualifies:

✅ Day camps, including specialty camps for sports, coding, or arts

✅ Care that allows the parent (and spouse, if married) to work or look for work

✅ Children under age 13 at the time of care

What doesn’t count:

❌ Overnight or sleepaway camps, even if the daytime hours are separated out

❌ Tutoring, music lessons, or other primarily educational programs

❌ Camps attended while one parent is at home and available to provide care

If your child has a booked summer and you meet any of the conditions above, it's worth considering. If you have specific questions, consult with your HR team.

𝗪𝗵𝗲𝗻 𝗜 𝘀𝗲𝗹𝗹 𝗺𝘆 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀, 𝗵𝗼𝘄 𝗺𝘂𝗰𝗵 𝗼𝗳 𝘁𝗵𝗲 𝗽𝘂𝗿𝗰𝗵𝗮𝘀𝗲 𝗽𝗿𝗶𝗰𝗲 𝗮𝗺 𝗜 𝗮𝗰𝘁𝘂𝗮𝗹𝗹𝘆 𝗴𝗼𝗶𝗻𝗴 𝘁𝗼 𝗸𝗲𝗲𝗽 𝗮𝗳𝘁𝗲𝗿 𝘁𝗮𝘅𝗲𝘀?

The short answer is that the deal structure matters just as much as the final sticker price.

If a buyer pushes you into an asset sale, they are trying to buy your equipment and inventory to secure tax write-offs for themselves. The trap for you is that depreciation recapture rules can hit those gains at much higher ordinary income rates.

With a stock sale, they buy your corporate equity instead. If you've held it for over a year, that gain qualifies for long-term capital gains rates, capping the federal hit at 20% plus the 3.8% net investment income tax.

If a buyer forces an asset sale to get their deductions, you can counter by calculating a tax "gross-up." This forces them to raise the purchase price by the exact amount needed to make sure your net, after-tax payout matches what you would have kept in a stock sale.

𝘋𝘰𝘦𝘴 𝘺𝘰𝘶𝘳 𝘤𝘶𝘳𝘳𝘦𝘯𝘵 𝘣𝘶𝘴𝘪𝘯𝘦𝘴𝘴 𝘴𝘦𝘵𝘶𝘱 𝘧𝘢𝘷𝘰𝘳 𝘢𝘯 𝘢𝘴𝘴𝘦𝘵 𝘴𝘢𝘭𝘦 𝘰𝘳 𝘢 𝘴𝘵𝘰𝘤𝘬 𝘴𝘢𝘭𝘦?

⚠️ A 10 percent position in a single stock is sometimes called a concentrated position.

Most people don't realize it when they have one.

It's usually not a conscious decision.

Ten years go by, and one company’s stock is a large percentage of the portfolio.

That isn't loyalty. It's exposure.

🔍 A few questions you might consider:

🛑 If the stock dropped tomorrow, what would change for your family?

🛑 Is the position there because selling always felt premature?

🛑 Has the embedded capital gain quietly become the reason nothing has been done?

There are several ways to unwind a concentrated position without writing a large check to the IRS.

The correct path depends on the situation.

If this sounds familiar, we’d welcome a conversation to share ideas that may help. Before any action is taken, however, it’s important to consult your tax, legal, and accounting professionals so you understand the tax consequences of any decision.

Hiring humans to make 𝘼𝙄 more effective? Ford is onto something.

Have you experienced problems with AI tools in your business?

Ford on why it hired 350 ‘gray beard’ engineers: you need their mentorship for younger workers — and to drive huge AI productivity gains "These engineers carry the hard-earned wisdom of decades of design," Ford told Fortune, adding that AI is important to quality gains.

𝗖𝗮𝗻 𝗜 𝗴𝗲𝘁 𝗮 𝘁𝗮𝘅 𝗯𝗿𝗲𝗮𝗸 𝗳𝗼𝗿 𝗮 𝗰𝗼𝗹𝗹𝗲𝗴𝗲 𝗰𝗹𝗮𝘀𝘀 𝗜 𝘁𝗼𝗼𝗸 𝘁𝗼 𝘂𝗽𝗴𝗿𝗮𝗱𝗲 𝗺𝘆 𝗷𝗼𝗯 𝘀𝗸𝗶𝗹𝗹𝘀?

You can use the Lifetime Learning Credit to lower your federal tax bill even if you aren't enrolled in a full degree program. This credit offsets 20% of your first $10,000 in qualified tuition and enrollment fees.

To max out the $2,000 cap, you can group your expenses into a single tax year. IRS rules state you can claim tuition paid now for an academic term that starts within the first three months of the following calendar year.

If you haven't hit the $10,000 qualified expense limit by mid-December, pay your upcoming Spring semester tuition before December 31st.

Prepaying your tuition keeps you from splitting expenses across two separate years and diluting your annual credit. Just make sure your course is hosted by an eligible institution that issues Form 1098-T.

𝘞𝘩𝘢𝘵 𝘪𝘴 𝘰𝘯𝘦 𝘱𝘳𝘰𝘧𝘦𝘴𝘴𝘪𝘰𝘯𝘢𝘭 𝘴𝘬𝘪𝘭𝘭 𝘺𝘰𝘶'𝘳𝘦 𝘭𝘰𝘰𝘬𝘪𝘯𝘨 𝘵𝘰 𝘶𝘱𝘨𝘳𝘢𝘥𝘦 𝘣𝘦𝘧𝘰𝘳𝘦 𝘵𝘩𝘦 𝘺𝘦𝘢𝘳 𝘦𝘯𝘥𝘴?

December is the busiest month for RMDs.

But waiting until then can mean you miss some chances with charitable giving or with estate ideas.

For anyone age 73 or older, the required minimum distribution is mandatory, and the penalty for missing a deadline can be steep. If taken before age 59½, withdrawals are taxed as ordinary income and may be subject to a 10 percent penalty.

But the timing of the withdrawal and which accounts it comes from can shape the tax bill in ways a December scramble can’t.

A few things worth knowing:

👉 Multiple IRAs can be aggregated; retirement plans cannot. Each RMD must come from that specific plan.

👉 In 2026, a Qualified Charitable Distribution may allow up to $111,000 per individual to go directly from an IRA to a qualified charity, satisfying the RMD without adding to taxable income. Check with your tax, legal, or accounting professional if you’re considering this approach.

👉 A QCD has to be a direct transfer. Once the money lands in a personal account, the option is gone.

👉 Coordinating across accounts, spouses, and inherited IRAs is where most of the value might sit.

Mid-year is when there is still room to model it.

If RMDs are part of your plan this year, this is a good time to map them.

𝗛𝗼𝘄 𝗮𝗿𝗲 𝘆𝗼𝘂 𝘁𝗿𝗮𝗰𝗸𝗶𝗻𝗴 𝘆𝗼𝘂𝗿 𝗽𝗲𝗿𝘀𝗼𝗻𝗮𝗹 𝗲𝘅𝗽𝗲𝗻𝘀𝗲𝘀 𝗿𝗶𝗴𝗵𝘁 𝗻𝗼𝘄?

📊 Spreadsheet
📱 Budgeting app
🔔 Relying on bank alerts
🙈 "What budget?"

Drop the emoji below that matches your approach.

𝗦𝗵𝗼𝘂𝗹𝗱 𝗜 𝘂𝘀𝗲 𝗦𝗲𝗰𝘁𝗶𝗼𝗻 𝟭𝟳𝟵 𝗼𝗿 𝗕𝗼𝗻𝘂𝘀 𝗗𝗲𝗽𝗿𝗲𝗰𝗶𝗮𝘁𝗶𝗼𝗻 𝗳𝗼𝗿 𝗺𝘆 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗲𝗾𝘂𝗶𝗽𝗺𝗲𝗻𝘁 𝗽𝘂𝗿𝗰𝗵𝗮𝘀𝗲𝘀?

One strategy is to apply Section 179 first to erase your active business income down to zero. Then, apply 100% Bonus Depreciation to any remaining asset basis if you want to strategically generate a tax loss.

Here is why: you can't use Section 179 to create a tax loss because it is strictly limited to your net business taxable income. On the flip side, 100% Bonus Depreciation doesn't care about your net income.

For example, if your net income is $100,000 and you buy a $150,000 machine:

• 𝘞𝘪𝘵𝘩 𝘚𝘦𝘤𝘵𝘪𝘰𝘯 179: You can only deduct $100,000 this year. The remaining $50,000 carries forward to next year.
• 𝘞𝘪𝘵𝘩 𝘉𝘰𝘯𝘶𝘴 𝘋𝘦𝘱𝘳𝘦𝘤𝘪𝘢𝘵𝘪𝘰𝘯: The purchase pushes your business into a $50,000 Net Operating Loss, which can potentially offset other income.

This distinction gives you more control over your tax outcome. You can decide whether it makes more sense to wipe out your current business tax bill or intentionally create a loss to offset other income.

When you look at your financial goals for this year, is your priority clearing out your active business income, or are you looking for ways to offset other income sources?