Category: Tax CentralTags: COVID-19 Article Highlights: Recovery Rebate Penalty-Free Retirement Withdrawals Waiver of the 2020 RMD Requirement Temporary Removal of Charitable Contribution Limits Employer Student Loan Payments Employer Delayed Payroll Tax Deposits Employer Credit for Retaining Employees Temporary Reinstatement of NOL Carrybacks Limitation on Losses Prior Year AMT Credit for Corporations Limitation on Business Interest Loan Guarantees and Subsidies The “Coronavirus Aid, Relief, and Economic Security Act” (Cares Act) includes many tax and financial breaks for both individuals and businesses. We broke down many of the essential elements and how they can assist you and your business during this troubling time. Recovery Rebate – The most talked about provision is the “recovery rebates”
Category: Retirement PlanningTags: IRA, Retirement Article Highlights: Early-Withdrawal Penalties Reduction in Retirement Savings Exceptions from the Early-Withdrawal Penalty If you find yourself looking for a quick source of cash, your retirement savings may look like a tempting option. However, if you are under age 59½ and withdraw money from a traditional IRA or qualified retirement account, you will likely pay both income tax and a 10% early-distribution tax (also referred to as a penalty) on any previously untaxed money that you take out. Withdrawals you make from a SIMPLE IRA before age 59½ and those you make during the 2-year rollover restriction period after establishing the SIMPLE IRA may be subject to a
Category: Tax Central Tags: Taxes Article Highlights: Extensions Balance-Due Payments Contributions to Roth or Traditional IRAs Estimated Tax Payments for the First Quarter of 2019 Individual Refund Claims for the 2015 Tax Year As a reminder to those who have not yet filed their 2018 tax returns, April 15, is the due date to either file a return (and pay the taxes owed) or file for an automatic six-month extension (and pay the an estimate of the taxes owed). Caution should be exercised when preparing the extension application, which is IRS Form 4868. Even though this form is described as “automatic,” the extension is automatically granted only if it includes a reasonable
Category: For Business Tags: Tax Planning Article Highlights: Trade or Business Definition Qualified Business Income Limitation Thresholds Specified Service Trade or Business Reputation or Skill Wage Limitation Proper Wage Allocation Qualified Property Depreciable Period Bonus Depreciation and Sec 179 Negative QBI and Carryovers Multiple Activities REITS and Publicly Traded Partnerships Anti-Cracking Provisions Some of the major provisions of last year’s tax reform legislation were the many benefits provided for businesses, including cutting the C corporation tax rate to 21%. Not to leave out other forms of business, the bill also included what was termed the 20% pass-through deduction that applies to sole proprietorships, partnerships, s-corporations and the like. The short-hand title
Category: For Business, Tax Central Tags: Tax Planning, Tax Reform Article Highlights: Increase In Standard Deduction Loss of Personal Exemptions Changes to Itemized Deductions Bunching Strategy Employee Business Expenses Business Expensing 20% Flow-through Income Deduction Change in Treatment of Alimony Casualty Losses, Home Equity Interest and Moving No Longer Deductible Tax reform has changed the way most taxpayers need to think about and plan for their taxes. It is no longer business as usual, and those who think it is are in for a rude awakening come tax time next year. For most taxpayers, the most significant change is the increase in their standard deduction, which on the surface seems like a big benefit.
Category: Tax Central Tags: Tax Planning It has been a busy time for tax-related news and upcoming changes. We have compiled many of the tax changes, deductions and tax rates for easy reference year round. It is more important than ever to plan ahead and review your options to maximize your financial results. Also please visit our side-by-side comparison of 2017 tax law and the recently enacted “Tax Cuts and Jobs Act.” HIGHLIGHTS OF THE CHANGES AFFECTING 2018 Congress in December of 2017 passed the Tax Cuts and Jobs Act that made sweeping changes to the tax laws. The issues impacting individuals and small businesses are included throughout this pocket tax guide.
Category: Education Planning Tags: Tax Credit Article Highlights: Sec. 529 plans Coverdell Education Savings Accounts American Opportunity Tax Credit The Lifetime Learning Credit Qualified Education Loan Interest Figuring out how to pay for your child’s trade school or college education can be challenging, and the earlier you create your plan and begin executing it, the greater your chances are of having the needed money set aside to pay for it. The government provides a variety of tax incentives to help defray the cost of education. Some require long-term planning to provide the most benefit, while others provide current tax deductions or credits. The benefits generally apply to both vocational schools and colleges.
Category: Tax Central Tags: Home and Mortgage, Tax Planning Article Highlights: Home Sale Gain Exclusion Home Sale Loss Rule Mortgage Interest Deductions When individuals buy new homes, they often consider turning their old homes into rentals rather than selling them. All too often, that decision is made without considering the tax implications. Converting a former residence into a rental may also happen when two individuals who each own a home get married or when individuals move to a new area but don’t want to sell their former homes. Whatever the reasons, the following tax circumstances should be considered before making that decision. Home Sale Gain Exclusion – When an individual has owned and occupied
Category: For BusinessTags: Growing your Business According to the Tax Foundation, 90% of United States (US)-based businesses are pass-through entities, such as S corporations, partnerships, and sole proprietorships. These businesses employ the majority of the private-sector workforce and provide nearly half of all business income. Income from these entities is passed through to the owner’s individual tax returns. With the change in leadership in Washington, several proposals will most likely change the way in which these entities are taxed, making it more advantageous to be a small business owner. Types of Business Structures A number of pros and cons exist for each type of business structure depending on the
Category: For BusinessTags: Tax Planning, Taxes Article Highlights: Paying Independent Contractors 1099-MISC Reporting Threshold Form W-9 Benefits Penalties Due Date If you use independent contractors in your business and pay them $600 or more during the calendar year, you are required to issue them a 1099-MISC after the close of the year. If you fail to do so, and your (if you operate as a Schedule C sole proprietor) or your business’s income tax return is subsequently audited, you could lose the deduction for those payments and end up paying taxes on that income yourself, not to mention potential penalties. A big tax trap for businesses is the $600