Even small tax mistakes can lead to big financial hits. This month’s roundup highlights how to stay ahead—protecting your business, your savings, and your peace of mind.

1. Avoid a $150,000 Solo 401(k) Penalty

If you’re self-employed with a solo 401(k) or similar plan, remember this: once your plan’s assets exceed $250,000, you must file Form 5500-EZ by July 31. Missing it can trigger penalties of $250 per day—up to $150,000 per return.

The good news? The IRS Late Filer Penalty Relief Program lets you fix past mistakes for just $500 per late form (up to $1,500). File now before penalties hit, and if you’ve already received a notice, you can still request relief for reasonable cause (like illness or natural disasters).

2. Turn Your Company Car into a Tax Asset

If your S or C corporation owns a vehicle you also use personally, handle it carefully. The IRS doesn’t allow “free” personal use—you must either:

• Add it as W-2 income, or

• Reimburse the corporation for your personal miles (usually the smarter option).

Done correctly, your business can deduct 100% of vehicle expenses, from fuel to insurance. Just make sure business use exceeds 50% to qualify for bonus depreciation or Section 179 deductions.

3. Hidden Deductions on Personal Vehicle Sales

Using your personal car for business and claiming the standard mileage rate? You may have hidden deductions waiting. When you sell the car, the IRS allows an ordinary loss for its “embedded depreciation.”

Example: a $50,000 car used 80% for business could create a $12,000+ deductible loss when sold. A small detail—big potential savings.

4. Landlords: File 1099-NECs for Bigger Deductions

Landlords often skip filing Form 1099-NEC for contractors—but doing so strengthens your case for major tax breaks. It helps your rental qualify as a trade or business, unlocking the 20% Section 199A deduction and safe harbor repairs up to $2,500 per item.

That could mean $1,000+ in tax savings on $20,000 of rental income—just for filing a form.

5. Tap Into Life Insurance Without Dying

If you own permanent life insurance, you can access tax-free cash while you’re alive. Options include:

• Withdrawals (tax-free up to premiums paid)

• Policy loans (no tax, low interest)

• Life settlements (sell your policy, sometimes tax-free if terminally ill)

Your policy could serve as an emergency fund or retirement cushion—without touching your investments.

Final Word

From 401(k) filings to vehicle and rental deductions, smart tax planning now prevents costly mistakes later. Review your situation before year-end and make sure your money works as hard as you do.