Passelli Accounting Services, LLC

11/03/2026

IRS Penalties - First time penalty and abatement.

11/03/2026

Royal Palm Beach, Wellington, and Loxahatchee Tax Payers - There are two ways to deduct a vehicle used for business, and the choice is more permanent than most people realize.

The standard mileage rate is a per-mile figure covering fuel, maintenance, insurance and depreciation. The actual expense method deducts the business percentage of what the vehicle really costs, depreciation included.

A wrinkle specific to this year: 2026 has two business rates. The IRS raised it mid-year, so January through June uses one rate and July through December a higher one. Apply a single rate to the whole year and you will compute it wrong.

The constraint that surprises people: to keep standard mileage available at all, you generally have to use it in the vehicle's first year of service. Start with actual expenses and that vehicle is locked into actual expenses for as long as you own it. Start with standard mileage and you can switch later, with adjustments.

The decision point is the year you buy, not the year you file.

Rough guidance. Standard mileage favors higher-mileage, lower-cost vehicles. Actual expenses favor costly vehicles, heavy vehicles eligible for accelerated depreciation, and low-mileage use.

Both methods need the same thing, and it's what fails in audit: a contemporaneous log with date, destination and purpose. Commuting to a regular workplace isn't business mileage under either.

Pick the method with your CPA before the purchase.

11/02/2026

Royal Palm Beach, Wellington, and Loxahatchee Tax Payers - Rent your home to your business for 14 days or fewer and the rental income is not taxable to you. The business still deducts the rent. That is the Augusta rule, and it is in the code.

It is also one of the most aggressively oversold strategies on the internet, and the version being sold is usually not the version that survives examination.

What holds up: a genuine business purpose, a rent figure supported by what comparable local space actually rents for, documentation of what happened, and a corporate record showing the arrangement. Annual meetings, board meetings, client events, planning sessions.

What doesn't: a round number chosen because it was convenient, no agenda, no minutes, no evidence the meeting occurred, and a rate well above what a real venue nearby would charge.

Three mechanical points that get missed. Fifteen days breaks it entirely — the exclusion is all or nothing. Because the income is excluded, you cannot also deduct expenses against it. And the business needs to issue the payment as rent, from the business account, not as a transfer you reclassify later.

Done properly on a handful of legitimate meetings, this is a modest and defensible benefit. Done the way it's marketed, it's a deduction with a documentation problem waiting to surface.

Get three comparable quotes and keep the minutes.

11/01/2026

Royal Palm Beach, Wellington, and Loxahatchee Tax Payers - If you own an S corporation and you're still claiming a home office on your personal return, it's probably doing nothing.

The employee business expense deduction was suspended, and an S corporation owner who works in the business is an employee of it. So the deduction most owners think they're taking has no effect on the return.

The mechanism that does work is an accountable plan.

The corporation adopts a written plan. You submit documentation of the business expense. The corporation reimburses you. The reimbursement is deductible to the corporation and excluded from your income — not reported on your W-2, not subject to payroll tax.

Three requirements make it an accountable plan: the expense must have a business connection, you must substantiate it within a reasonable time, and any excess advance must be returned. Miss those and the reimbursement becomes taxable wages.

What commonly runs through one: the business-use portion of a home office, personal vehicle mileage, cell phone, internet, travel and continuing education.

The failure I see most often isn't the absence of a plan. It's an owner writing himself a check with no documentation behind it, then calling it a reimbursement at year-end. Without the paperwork, it's a distribution.

Adopt the plan before the expenses, not after.

10/31/2026

Royal Palm Beach, Wellington, and Loxahatchee Tax Payers - Most filing deadlines bend. This one doesn't.

W-2s and 1099-NECs are due January 31 — both to the recipient and to the government. There is no automatic extension for either. Form 8809 can buy time for some information returns, but not for the W-2 or the 1099-NEC, and not routinely.

Penalties run per form, in both directions. A late 1099 can draw a penalty for the copy you owed the contractor and another for the copy you owed the IRS. Across a dozen contractors, a missed deadline stops being an administrative annoyance and starts being a real number.

What makes January painful is almost never the filing. It's the data. The address you never collected. The contractor who incorporated in June and you didn't notice. The W-9 you meant to request in March and still don't have.

Two things to do in the next few weeks, while there's still time:

Pull a vendor report for the year and flag everyone paid $600 or more for services. Then check whether you have a signed W-9 for each one. If a W-9 is missing, request it now — not in January, when nobody answers.

Also confirm how each vendor is organized. Payments to a corporation are generally exempt from 1099-NEC reporting, but attorneys are not, and an LLC may or may not be taxed as a corporation. The W-9 is what tells you.

December is for collecting. January is for filing.

10/30/2026

Royal Palm Beach, Wellington, and Loxahatchee Tax Payers - Form 2553 for a 2027 tax year is due by March 15, 2027 — two months and fifteen days into a year that has already started.

That deadline creates a quiet problem. By the time most owners think about it, they're a quarter into the tax year the election covers, and the decisions that make an S corporation work are already behind them.

What should have happened first: a reasonable compensation figure determined and built into a budget. A payroll provider engaged, because an S corporation owner has to run actual payroll. A sense of whether the profit level justifies the added cost of a separate return, payroll filings and bookkeeping.

The threshold question is whether there's enough profit. An S corporation saves self-employment tax on the distribution portion, but it adds an 1120-S, quarterly payroll returns, and tighter bookkeeping. Below a certain profit level the savings don't cover the cost, and the answer is to stay where you are.

Relief under Rev. Proc. 2013-30 exists for late elections with reasonable cause, and it works more often than people expect. But building a plan around needing relief isn't a plan.

Fourth quarter is when this gets decided. March is when it gets filed.

10/30/2026

Thinking about making a large purchase or equipment purchase before year-end to “save on taxes”? The real math on why a $50,000 purchase doesn’t save you $50,000.
What’s covered:
• Why a write-off isn’t dollar-for-dollar savings
• How to estimate your actual tax savings (purchase price × your marginal bracket)
• The real cash-flow math: spend $50K, save ~$15K, still out ~$35K
• Deductions vs. credits
• Why taxes shouldn’t drive your business decisions
📅 Book a call with Passelli Accounting Services: 561-386-3997
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Educational purposes only; not tax, legal, or financial advice.
TaxDeductions

10/30/2026

https://youtu.be/_02p13MZijg?is=VdIM48bg3i7RA-0X

Thinking about buying a truck or equipment before year-end to “save...

10/28/2026

Royal Palm Beach, Wellington, and Loxahatchee Tax Payers - Open enrollment usually gets treated as a benefits chore. Several of the choices in it are tax decisions with real dollars attached.

The one that costs people money every year is the health FSA. It's use-it-or-lose-it. Depending on what your employer adopted, you may get a grace period of up to two and a half months or a carryover of a limited amount — or neither. Money left in the account past the deadline is forfeited to the plan.

The planning error runs in both directions. People under-elect because they're afraid of forfeiting, giving up a deduction they'd have used. Others elect based on last year's medical spending in a year that isn't going to look like last year.

Worth knowing how an FSA differs from an HSA, because they're often confused:

Unused FSA funds are generally forfeited; HSA funds roll over indefinitely. An FSA belongs to the plan and generally ends when the job does; an HSA is yours. An FSA has no insurance prerequisite; an HSA requires a qualifying high-deductible plan.

Also check the dependent care FSA separately — different limits, different rules, and frequently left on the table by families already paying for care.

Elect for the year you expect, not the year you just had.

10/27/2026

Royal Palm Beach, Wellington, and Loxahatchee Tax Payers - Tax-loss harvesting season is here, and this is the rule people get wrong most often.

The idea is sound: sell a position at a loss, use the loss against gains, and keep your portfolio roughly where you want it. Losses offset capital gains without limit, then up to $3,000 of ordinary income, with the rest carrying forward indefinitely.

The wash sale rule disallows the loss if you buy a substantially identical security within 30 days — and that's 30 days before the sale as well as 30 days after. A 61-day window with the sale in the middle. Buying a position in early December and selling a different lot of it at a loss two weeks later can trip it.

Two details that cause real problems:

It crosses accounts. A purchase in your IRA, or in a spouse's account, can disallow a loss taken in your taxable account. Automatic dividend reinvestment is a frequent and invisible culprit.

A disallowed loss isn't gone — it's added to the basis of the replacement shares. But it's deferred, which defeats the point of the harvest.

One more thing: as the law currently stands, the wash sale rule applies to securities and not to digital assets, though legislation to change that has been proposed. Worth confirming before relying on it.