Year-End Tax Tips for Inspectors
by Nick Gromicko, CMI®
Here are some year-end tax tips for inspectors:
1. Membership in InterNACHI® is tax-deductible, so if you are due to renew your membership in January, February or March of 2023, you might want to renew before December 31, 2022, and take the deduction now. You can print off your tax-deductible receipt for dues here.
2. The reverse is true, too. If you do a bunch of inspections between Christmas and New Year’s Day, you might just want to hold the checks and deposit them on January 2, 2023 to defer income into 2023.
3. Also, if you collect credit card payments at the end of December for inspections you have performed, you may want to wait until New Year’s Day to process the batch, as they aren’t considered income until the year the payments are actually deposited into your checking account.
4. The reverse is not true about checks you write. A check written for a business expense and put in the mail in December 2022 can be deducted in 2022, even though the check doesn’t clear until 2023. New Year’s Eve falls on a Friday, a day the U.S. Postal Service is in operation. Therefore, any check for business expenses written on New Year’s Eve is deductible in 2022, even though it might not come out of your bank account until 2023.
5. Putting a business expense on your credit card in the month of December 2022 is deductible in the 2022 tax year, even though you don’t pay on your credit card until 2023. So use your InterNACHI discount to do some shopping at Inspector Outlet.
6. If you apply and pay for your Certified Master Inspector® (CMI®) professional designation before December 31st, you will be a CMI® for life, even though you are deducting the entire fee this year.
7. You can join the Certified Commercial Property Inspectors Association® (CCPIA) before December 31st, you will be a member for all of 2023 even though you are deducting your membership dues this year.
8. In the past, many inspectors who ran their businesses from home have been reluctant to take a home office deduction for fear of triggering a red flag with the IRS. This year, because of COVID-19, the IRS isn't likely to scrutinize home office deductions. So take your full deduction for running your inspection business from home.
9. Because InterNACHI is a U.S. Department of Education-accredited school, you may be eligible for educational deductions and credits. Ask your accountant.
10. The stock market was down this year. Sell investments such as stocks and mutual funds to offset any taxable gains. Losses offset gains dollar for dollar. And if your losses are more than your gains, you can use up to $3,000 of excess loss to wipe out income from your inspection business.
11. The same is true for crypto. Bitcoin is down 64% this year. FTX losses are from theft. You can use those losses in crypto to offset other gains, dollar for dollar.
12. And finally, Cozy Coats for Kids® is an award-winning registered charity. Give your inspection company's website an SEO bump by making a tax-deductible donation. Cozy Coats for Kids® will then list your inspection company's contact information on their Donors Page forever. Scroll down that page to view other inspectors who have donated.
10. The stock market was down this year. Sell investments such as stocks and mutual funds to offset any taxable gains. Losses offset gains dollar for dollar. And if your losses are more than your gains, you can use up to $3,000 of excess loss to wipe out income from your inspection business.
11. The same is true for crypto. Bitcoin is down 64% this year. FTX losses are from theft. You can use those losses in crypto to offset other gains, dollar for dollar.
12. And finally, Cozy Coats for Kids® is an award-winning registered charity. Give your inspection company's website an SEO bump by making a tax-deductible donation. Cozy Coats for Kids® will then list your inspection company's contact information on their Donors Page forever. Scroll down that page to view other inspectors who have donated.
