Tax

The home-office deduction can produce substantial tax savings, especially when it converts what would otherwise be commuting miles into deductible business mileage. But many business owners accidentally put this valuable deduction at risk.

If you use your home office for more than one purpose, each use must qualify under the tax rules. A single non-qualifying use can jeopardize the deduction.

One of the biggest traps involves W-2 employment. Federal law now permanently denies employees a home-office deduction on their personal tax returns. That means if you use the same office for both your self-employed business and your W-2 job, your employee use can threaten the deduction for your business.

The same caution applies if you operate multiple businesses from the same office. Each business must independently qualify for the home-office deduction. Likewise, if you share the office with your spouse, your spouse’s use must also qualify—unless you split the room so each spouse uses a separate portion exclusively.

If your business operates as either an S or a C corporation, there is still a way to benefit from a home office. Rather than claiming the deduction personally, the corporation can reimburse your home-office expenses through an accountable plan.

The consequences of losing the home-office deduction can extend beyond the office itself. You may also lose valuable business mileage deductions if the IRS reclassifies your trips as non-deductible commuting.

If you want to discuss the home office, please call me on my direct line at 408-778-9651

• By Leon Clinton
• August 13, 2026

If you own more than one business, you may be missing out on a larger Section 199A deduction without even realizing it.

The Section 199A deduction allows many owners of sole proprietorships, partnerships, and S corporations to deduct up to 20 percent of their qualified business income. Even better, Congress has now made this deduction permanent, which means proper planning is more valuable than ever.

When you own multiple businesses, the calculation becomes much more complicated. Depending on your taxable income, you may have the opportunity to combine, or “aggregate,” certain businesses for purposes of computing the deduction. In the right circumstances, aggregation can substantially increase your tax savings.

Taxpayers with higher incomes can enhance the deduction by the amount of W-2 wages paid or business property owned. One business may have plenty of wages but little income, while another has strong profits but few wages. If the businesses qualify for aggregation, combining them can produce a significantly larger deduction than what results from calculating each business separately.

Businesses that generate losses require special attention as well. A loss from one business can reduce the deduction available from your profitable businesses, making accurate calculations especially important.

The rules governing aggregation are highly technical, and not every business qualifies. In addition, if you elect to aggregate, you generally must continue using that approach in future years unless the facts change.

If you want to discuss how the Section 199A deduction works with multiple businesses, please call me directly at 408-778-9651

• By Leon Clinton
• August 11, 2026

If you’re planning to sell highly appreciated real estate, a closely held business, or private company stock, don’t let the tax consequences become an afterthought. There may be a way to defer the capital gains tax for years—even decades—but only if you plan before the sale.

One strategy worth considering is a deferred sales trust. Instead of selling your asset directly to the buyer, you first sell it to an independent trust in exchange for an installment note. The trust then completes the sale to the buyer. Because you receive payments over time rather than all at once, you generally pay the capital gains tax as those payments are received.

The biggest advantage is that the full pre-tax sale proceeds can remain invested instead of immediately being reduced by taxes. That allows more money to compound over time and may provide a steady stream of retirement income.

Unlike a Section 1031 exchange, a deferred sales trust does not require you to purchase replacement real estate within strict deadlines. It can also provide greater investment flexibility if you’re ready to move beyond real estate.

This strategy, however, is not for everyone. Because the IRS scrutinizes these transactions, they require careful planning before you sign a binding sales agreement, and the trust must be genuinely independent. In addition, unlike a 1031 exchange, a deferred sales trust generally does not preserve the step-up in basis that heirs may receive when appreciated real estate is held until death.

If you want to discuss the deferred sales trust, please call me directly at 408-778-9651.

• By Leon Clinton
• August 9, 2026