Larry's Income Tax & Bookkeeping Service

10/16/2026

A client asked the other day whether she'd be held responsible for her mom's taxes, who passed away earlier this year. I told her no, her mom's debts were hers only and IRS couldn't come after the kids or any other heirs.

However, IRS has the right, like most creditors, to recoup their money from whichever assets the deceased left behind. This all gets handled by that person's estate.

The executor of the estate handles the distribution of the estate's assets as required by law. They have to pay off all valid debts before distributing anything to the heirs. In cases when there isn't enough cash, assets must be sold to pay off the debts. And in some cases, there's nothing left for the heirs once debts are repaid (although there are certain "protected" assets).

Anyway, the short answer is no--you're not responsible for your parents debts (unless you co-signed or are otherwise legally obligated to repay the debt).

Check out this little article discussing in more detail:

Quick ReadIRS debt dies with the person when no estate exists. Surviving family members who inherited nothing owe the agency nothing.The critical exception: surviving spouses who filed joint returns with the deceased remain personally liable for that tax debt regardless.Filing Form 56 with a death c...

10/15/2026

To our friends and clients who were affected by Isaias over in AL and FL: if you hadn't filed your taxes yet, your filing deadlines have been extended until February 4th and 8th, respectively.

Get more info here:

Find disaster tax relief information and resources.

10/09/2026

When you owe taxes, remember IRS wants their money by 4/15, at the latest. The October 15th extended deadline only gives you extra time to fill out the paperwork, not paying your tax bill.

In cases where the tax liability will exceed $1000, they even want it prepaid throughout the year, payable once per quarter. So for example, if your tax bill is expected to be $4,000, they want you to send in $1,000 each quarter so that, by the time you file your return, the tax will have been fully paid.

Some of you have gotten major jolts with what you owe for different reasons (investments paying capital gains, your SE income has increased, kids moved out, both spouses working, changes in filing status, you have two jobs, etc) and were "blindsided" by the final tax bill.

We've brought it up before, but bringing it up again: IRS has a tax withholding estimator tool. But maybe the name is a bit misleading because it makes it seem like that's just for folks to adjust their W2 withholding, but in reality, it's a tool for you to calculate your tax liability based on just about all sorts of income sources. It asks for interest, social security, w2 earnings, SE income and expenses, filing status, dependents, etc---and it's very accurate if you enter the proper figures!

You then use that projected liability and you 1) adjust your withholdings at work, or 2) make estimated payments, or 3) make other changes that could affect the liability, like increasing retirement contributions, buying business equipment, enrolling in college courses, even getting married (no joke, every 2-3 yrs, we get a client or two who give the question a good thought, 😆!).

Below is a pic of what it calculated the liability would be for a single filer, no dependents, under 65, self-employed, whose net income on schedule C was $75K. It was dead on. This person should send about $3900-$4000 per quarter to IRS to avoid a $16K surprise bill at the end!

Check it out and plug in your numbers at: https://apps.irs.gov/app/tax-withholding-estimator/

10/08/2026

S-corp owners who struggle to come up with "reasonable compensation" can use this little tool to help guide you.

IRS doesn't give a formula, percentage, or amount---their only guide is your compensation has to be "reasonable", which we loosely define as, "what you'd pay someone else to do your job."

If you're on the low end of things, it could be legitimate....maybe you only put in a few hours per day/week, or you may be the owner, but the actual work is done by other employees and you're paying them the big salaries, or you're in a state/area where salaries aren't as high, or maybe you're losing money this year and you can't afford to pay yourself wages (careful here---don't take distributions without taking wages)...etc.

Whatever the reason, just document it so that IRS can see that you actually thought about it and came up with your best "reasonable" figure.

Check it out:

Calculate a defensible reasonable comp range for S-Corp shareholder-employees based on BLS data, geography, experience, and specialty. With IRS audit risk gauge.

10/07/2026

Not sure if there is a "trick" in there (political motive?), but those $500, "Obamacare" checks that are already making their way into mailboxes (confirmed by several phone calls) are definitely a "treat" for folks who receive them!

But that money isn't coming to everyone. According to the accompanying letter, this money represents a refund to about 1M folks who overpaid while they were enrolled in Marketplace insurance in past years ("Biden era").

Check it out:

Nearly 1 million Affordable Care Act customers are receiving $500 refunds after being "ripped off." Do you need to apply to get one?

10/06/2026

One of the seminars we attended dealt with athletes, NIL, and influencers. Just saw a headline that student athletes made almost $1.8B in revenue sharing in the first full year it became available. That doesn't include NIL deals that these kids may also be getting.

FYI, IRS counts that as income. Many parents, and especially the students, don't realize that this is creating a potential tax bill with IRS!

To complicate matters even more, the presenter mentioned that sometimes, the payments don't look like payments---maybe they're called "sponsorships" or maybe athletes/influencers get free clothes/vehicles/trips/etc. just for posting a few things showcasing those products on their social feeds.

In one example, the athlete got free use of a vehicle as long as he was on the team. In another, someone was "sponsoring" the high school team and paying for all travel expenses--even for parents. In another, the athlete got around $3000 worth of designer clothes in exchange for a social post!

In all cases, the presenter said it was income. The presenter, btw, is an IRS employee who himself had a student-athlete, and he said that, currently, it's the Wild West out there. But, just like they did with crypto, IRS is busily working behind the scenes on getting its bearings/enforcement procedures, and, in a year or two, they'll go back retroactively looking for their money. The reality is that only a small percentage of these athletes will have multi million dollar contracts to be able to afford the bill---all others will have to face the music at that time.

One last thing the presenter said is that not all agents have your best interest in mind, and there's so much disinformation (or really lack of information) among the athletes, as most of them don't see these "blessings" as income. IRS and the courts have strongly backed that ignorance of the law is not an excuse, so parents, if you have a student athlete, check out this IRS page with them.

You can tell this is a new and hot topic by the amount of information it contains. This page is set up with FAQ's and links to help you get the info you need to make sure you're doing things properly. Check it out:

If you are a student-athlete and you receive any monetary or financial gain, in cash or non-cash, from a transaction in which you benefit from the use of your name, image or likeness, that gain is NIL income.

10/01/2026

Article listing a few deductions that you can take, "above the line", meaning that you don't need to itemize ( #4 is new this year).

Check it out:

While above-the-line adjustments are available to those who itemize and those who take standard deduction, there are possible limitations for some taxpayers.

09/30/2026

Please remember that in order to claim the college credit, we need form 1098T from the college. This form usually gets mailed at the same time as the W2s and other yr-end forms but it's also available via the student portal at the school.

Here's link to IRS site discussing the form (it even shows a blank one so you know what you're looking for!) check it out:

Information about Form 1098-T, Tuition Statement, including recent updates, related forms and instructions on how to file. Form 1098-T is used by eligible educational institutions to report for each student the enrolled amounts they received for qualified tuition and related expense payments.

09/29/2026

Coming up in 2027, the Education Freedom Tax Credit will enable us to take up to a $1700 credit for funding Scholarship Granting Organizations (SGO's).

Louisiana is supposedly going to participate and make a list of qualifying SGO's available so that we can choose where to make these donations.

Way more information is available here, so check it out:

IR-2025-121, Dec. 12, 2025 — The Department of the Treasury and the Internal Revenue Service today issued Revenue Procedure 2026-6 allowing States, including the District of Columbia, to make an Advance Election to participate in a new tax credit for calendar year 2027.

09/24/2026

Apparently, people are out there making money, and one of the seminars discussing the solo 401k had good attendance and speaker was very positive toward it.

The solo 401k has been around for about 25 years, it's a bit more complex than a SEP plan, so your easy choice---especially by the time we see you at tax time---is to make SEP contributions (which is also a good retirement tool, btw). Used to be that you had to set up 401k plans before October, but those deadlines have been updated in the last couple of years.

Anyway, for those of you who are SE, are making good money, and are committed to your retirement goals, here's an article that discusses how you can use the 401k and SEP IRA's to achieve those goals (if you're 60-63 yrs old, the max is $83K/yr!)

Word of caution: although you can technically set up and manage a 401k yourself, we definitely suggest you get a financial advisor involved---remember this is your retirement money, not "fun money"!

Check it out:

Self-employed investors can hold both a SEP IRA and Solo 401(k). This guide covers the 2026 rules, how the limits interact, and when the combined strategy makes sense.