Meisa Bonelli Talks Tax Strategies For Traders And Embarrassing Tax Questions
Meisa Bonelli is a Wall Street finance and tax professional, business match-maker and mentor. She is the President of Millennial Tax Ventures and dropped by for a chat on Benzinga's #PreMarket Prep show.
Bonelli, a native New Yorker, is a member of the National Association of Tax Professionals and is also affiliated with the Greater New York Chamber of Commerce, Toastmasters International, among other organizations. As the President of Millennial Tax, Meisa provides exclusive tax preparations to home-based businesses, start-ups and “solopreneurs."
Meisa shared some of her more humorous adventures in taxation, which includes clients asking if botox surgery is an acceptable deduction. Another example is a client inquiring if college tuition for a mistress can be tax deductible.
The answer to both is a very obvious no, but it never hurts to ask as the IRS does allow some tax-deductions on everyday items that seem out of the ordinary. Swimming pools and air conditioning are two examples of items that are absolutely appropriate and eligible for a tax-deductible -- under the right conditions that is.
As for traders, Bonelli urges them to take advantage of the home office deduction and any expenses related to professional clubs, or mileage expenses if a trader is travelling with a client.
The IRS has recently simplified the home office deduction which allows an eligible trader to deduct $5 per square foot of home office and up to 300 square feet. Naturally, according to Bonelli, the IRS has means to verify the legitimacy of such claims.
For traders that weren't aware of the home office deduction, Bonelli urges traders to first crunch up the numbers themselves to see if any potential reduction is worth it to file an amended return.
One of the biggest challenges of tax reporting is the fact that any item could trigger an IRS review.
“Years ago, we could tell our clients, this or that may trigger an audit,” Bonelli explained. “But just about anything could trigger an audit today. Becoming a new entrepreneur can trigger an audit. If you are coming from a W-2 situation you really don't have any business expenses, and in the following year you've got $30,000 to $60,000 of legitimate business expenses, that could trigger an audit.”
Bonelli was personally audited for having a change of address.
She encourages traders to be “pro-active” with paying taxes, as there are strategies to put in place depending on the traders structure (i.e., registered as a corporation, LLC, etc). The reason for a pro-active approach is the simple fact that late filling, or filling with errors, comes with penalties that could add an unnecessary burden.
“When they call you, you don't want to have to deal with them,” Bonelli warned traders. “Be in integrity with the IRS and pay them.”
While not applicable to traders directly and more towards millennials, be sure to check with parents before filling in the event that they are still classified as a dependent. Additionally, it is important to understand prior to filling taxes what the result will be on any student debts or loans.
And for those millennials that have filled their taxes and received a refund, the always unpopular but logical course of action is to use that money to pay back a portion of student debt.
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