If you’ve been anywhere near the real estate market, you’ve probably heard the term “STR.” But what does it mean, and why is everyone talking about it?
STR stands for Short-Term Rental—typically a house, cabin, or other dwelling rented out for an average stay of seven days or less. If you meet certain IRS criteria, your property can qualify as a short-term rental for tax purposes. These criteria generally relate to how the property is used, the average rental period, and your level of participation in managing the property.
The Tax Advantage
Accelerated Depreciation: Investment properties allow for depreciation deductions, but short-term rentals can take this a step further through a cost segregation study.
Normally, residential rental properties depreciate over 27.5 years. A cost segregation study reclassifies certain components—such as electrical systems, plumbing fixtures, and landscaping—into shorter depreciation periods.
This reclassification enables accelerated depreciation, meaning you can claim larger deductions earlier in ownership. These deductions can reduce your taxable income by “front-loading” expenses.
Why Does This Matter?
Passive losses generally only offset passive income. For high earners (over $150,000 a year), long-term rentals often provide limited tax benefits. Short-term rentals, however, can qualify as non-passive under certain conditions, allowing deductions to offset W-2 income.
Bottom Line
Short-term rentals can be a powerful strategy to reduce your tax liability and keep more of your hard-earned income.
And what to do with the receipts you save from them.
Lots of folks get stumped by the blank receipt cards handed back to them after dropping off a donation at the local Goodwill or Salvation Army.
Do you write in the value yourself? Do you add them all together? Do you even need one of these if the items weren’t worth much to you?
We’re here to give you the tax advice you need.
First of all–
Are you going to itemize on your federal tax return? Standard deductions on federal tax returns cover charitable contributions up to a certain dollar amount. With them you don’t usually take the time to list out every single item you’ve given away. So, you can chuck that receipt card into the recycling bin.
Except…you may need it for your Minnesota State individual income tax return. Combined cash & non-cash donations worth over $500 can get deducted, whether you take the standard deduction or not. But you’ll need to save that receipt. Now back to your federal tax return. If you are going to itemize on your federal return–
Ask yourself this:
If you were to sell the item for its market value, would it be worth more than $250?
For example, you bought a TV for $3,000, but that was a few years ago and you’re getting an upgrade. If you sold it on Facebook Marketplace, you could make $1,900 on it.
The rule is that all non-cash donations (i.e. personal property) worth $250 or more need a receipt. So these become very important if you donate a highly valued item or make multiple donations of personal property.
However, you also need to answer a second question.
Are your total non-cash donations for the year over $500? –If “yes,” then you need to have a detailed record for each of your contributions, even the ones worth less than $250.
If “no,” then no detailed records are required, and you don’t need to include the receipt with your federal tax return.
Here’s our rule of thumb.
If you routinely donate personal property as a charitable contribution, or you make one high-value gift in a year, save the receipts. You’ll want to keep them with your other tax source documents for at least 3 years after that specific return has been filed.
And how it will impact your small business accounting.
If you’re a small business owner with employees, there are some accounting things you’ve already learned to navigate. Expense reports. Payroll. Sending out W2s.
But a new Minnesota law is going to add some extra work to your plate, starting as soon as October 2024.
So, here’s what you need to know about Minnesota Paid Leave before it hits your bookkeeping.
What is Minnesota Paid Leave?
According to the official website, “Paid Leave is a new program launching for Minnesotans in 2026.” It provides job protection and partial wage replacement (i.e. paid time off) for employees during certain major life events.
The law outlines two primary types of leave:
Family Leave to care for a family member with a serious health condition, or if you’re bonding with a new baby or child in your family.
Medical Leave when your own serious health condition prevents you from working as usual.
A couple other conditions also qualify for paid leave: taking time off to support a family member called to active duty, and taking time off if you are facing or supporting a family member facing a significant personal safety issue.
As the 13th state to implement this type of legislation, Minnesota has examples to fall back on, but it will take some time to get the whole program up and running.
How does this impact your small business accounting?
Submit quarterly wage detail reports
Minnesota Paid Leave will be funded by premiums made up of contributions from you (the employer) and through payroll deductions on employee wages.
In order to determine who is eligible and how benefit payments will be allocated, employers are required to submit quarterly wage detail reports. The first one is due October 31, 2024.Submitting this uses the same online reporting system as Unemployment Insurance. So, you can use the same reporting process and format for MN Paid Leave that you currently do for UI Wage Detail reporting.
Inform and educate your employees
You are responsible for helping your employees learn about and access Paid Leave. Employers must inform their employees about their rights and benefits under this new program by December, 2025. Written materials, notice posters, and other informational material will be provided by the State.
Submit Paid Leave premiums
When the program launches January 1, 2026, you can start deducting premiums from employee paychecks. That’s when benefits will become available as well. As an employer, you will have to pay at least 50% of the premium, with the option to pay up to 100%. The remaining percentage (up to 50%) can be deducted from employee pay.
You’ll also begin submitting quarterly premium payments through your Unemployment Insurance account. The first premium payment is due April 30, 2026. Total premium payment for the first quarter will be based on wage details reported between January 1 and March 31, 2026.
Submit Paid Leave premiums
If we process payroll for you, there may be a few questions we’ll ask regarding whether you, as the business owner, wish to participate in the program. But we will be filing the report for you.
If you process your own payroll, the reporting will be done when you file your Minnesota Unemployment Return.
If you are a business owner and you do not have Minnesota Unemployment Obligations, you may opt into the program and open a Paid Leave Only Account.
If you’re a small employer, you’ll want to mark January 2026 on your calendar. That’s when you can apply for assistance grants to help support your business during an employee’s absence. Qualifications apply.
As we approach additional deadlines and other information becomes available, we will be updating this post and our social media. Save this post and follow us online to stay in the loop.
Taking on your business tax filing is our daily grind.
*insert coffee maker noise*
But there are some things that, by law, we are not permitted to file on your behalf.
Case in point: Beneficial Ownership Information (BOI for short).
We are still dedicated CPAs, however, so here’s a straightforward walkthrough of how to file this necessary–and highly important–report by yourself.
Okay, But What is BOI?
If you’re new to owning a business, this is where we introduce you to the U.S. Department of the Treasury and its Financial Crimes Enforcement Network. (We know them as FinCen.)
Do they wear crisp suites and dark sunglasses?
Maybe.
Should you be nervous about them?
Only if you’re trying to commit crimes with your money. (Please don’t.)
Beneficial Ownership Information became important in 2021, when Congress enacted the bipartisan Corporate Transparency Act to curb illicit finance. This law requires many companies doing business in the United States to report information about who ultimately owns or controls them.Yes, you may be a small business and not an international powerhouse. But the law still applies to you. So it’s really important not to skip this.
Do You Need to File?
You may need to report information about your company’s beneficial owners if it is–
1. a corporation, a limited liability company (LLC), or was otherwise created in the United States by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe; or
2. a foreign company and was registered to do business in any U.S. state or Indian tribe by such a filing.
Why Do You Need to File BOI?
Filing BOI for your business is a mandatory requirement designed to enhance transparency and combat financial crimes such as money laundering. As a beneficial owner–someone who benefits from ownership of the company–you are required to disclose your identity and the extent of your ownership in the business entity.
When Does This Affect You?
According to the U.S. Department of the Treasury, reporting your beneficial ownership information is not an annual requirement. Unless information for your company needs to be updated or corrected, you only need to submit a report once.
If your company was created or registered before January 1, 2024, then you have until January 1, 2025 to report your BOI.
On the other hand, if your company has been created or registered in 2024, you must report BOI within 90 calendar days after receiving actual or public notice that your company’s creation or registration is effective–whichever is earlier.
If your company is created or registered on or after January 1, 2025, you must file BOI within 30 calendar days after receiving actual or public notice that its creation or registration is effective.
Any updates or corrections to the BOI that you previously filed with FinCen must be submitted within 30 days.
How to File BOI
Now it’s time for the brass tacks. There are 4 main steps to this process:
Collect the information you’ll need.
Before you start, make sure you have the following information on hand.
–The full name, date of birth, and address of each beneficial owner in your company.
–Adescription of the nature of each owner’s interest in the entity.
–Identification numbers–such as social security number, passport number, or driver’s license number–for each beneficial owner.
Now is the best time to make scans of those identification documents. You’ll need all this for the form later, and it’s much easier to grab everything before you start. We recommend the app Office Lens for turning your phone into a mobile scanner and generating PDFs.
Access the online form.
Go to fincen.gov/boi and click the link titled “File a Report Using the BOI E-Filing system.” This will take you to a fresh page allowing you to select “Beneficial Ownership Information > Get Started.” Once inside, you can opt to prepare and submit your report online by choosing the “File Online BOIR” option.
There are also step-by-step instructions available at boiefiling.fincen.gov/help to lead you through this.
Complete the online form.
From here, patience and thoroughness are key. You’ll need to fill in all the details requested as accurately as possible. Once you do, double-check that information for any errors. You do not want to deal with the aftermath if a name gets mis-typed or dates are out of order.
You’re also going to submit any supporting documentation required. Here’s where you use those scans from your phone to attach copies of your identification documents. Again, make sure all those documents are clear and legible before moving forward. If necessary, re-do the scans for a clearer image.
Read through the entire form one more time, carefully and methodically, and double-check that the correct documents are attached. Now you’re ready to hit “submit” on your BOIR.
Confirm your submission.
After FinCen has processed your submission, you’ll receive the Submission Status Confirmation on the screen. Make sure you download the transcript, take a picture, or screenshot for your own personal records.If you need more resources or support on this topic, you can find detailed instructions and FAQs on FinCen’s site: www.fincen.gov.
What Happens if I Don’t File?
We understand that this process may seem daunting, but it is essential for compliance with current regulations. We certainly don’t want to see you get in trouble.
Penalties for willfully not filing are a fine of $591 a day–up to $10,000–and two years in prison, with similarly serious penalties for disclosing your beneficial ownership information without authorization.
While we can’t file the BOI for you, we are here to provide any guidance or support you might need. If you have any questions or require further clarification, please do not hesitate to contact us.
Thank you for your attention to this important matter!
