Taxes

Taxes

March 18, 2015 Advisory & Consulting, Taxes

Family Home Loan Interest May Not Be Deductible

Category: Tax Central Tags: Buying a Home, Home and Mortgage Article Highlights: Qualified residence interest is deductible interest that is paid or accrued during the tax year on acquisition indebtedness or home equity indebtedness with respect to any qualified residence of the taxpayer. Acquisition indebtedness means that any indebtedness that is incurred in acquiring, constructing, or substantially improving any qualified residence of the taxpayer is secured by such residence. Interest on unsecured home debt is generally not deductible. It is not uncommon for individuals to loan money to relatives to help them buy a home. In those situations, it is also not uncommon for a loan to be undocumented or

February 25, 2015 Advisory & Consulting, Taxes

Will the Interest on Your Vehicle Loan be Deductible?

Category: Tax Central Tags: Automotives, Tax Deduction Article Highlights: Vehicle loan interest Consumer loans secured by the vehicle Using home equity loans to create deductibility Exercising restraint when using home equity Whether or not the interest you pay on a loan to acquire a vehicle is deductible for tax purposes depends how the vehicle is being used (for business or personal purposes), the tax form on which the expenses are being deducted, and the type of loan. If the loan were a consumer loan secured by the vehicle, then the following rules would apply: If the vehicle is being used partially for business and the expenses are being deducted on

February 21, 2015 Taxes

Don’t Overlook the Spousal IRA

Category: Retirement Planning Tags: IRA, Marriage Article Highlights: Spousal IRA Compensation requirements Maximum Contribution Traditional or Roth IRA One frequently overlooked tax benefit is the “spousal IRA.” Generally, IRA contributions are only allowed for taxpayers who have compensation (the term “compensation” includes: wages, tips, bonuses, professional fees, commissions, alimony received, and net income from self-employment). Spousal IRAs are the exception to that rule and allow a non-working or low-earning spouse to contribute to his or her own IRA, otherwise known as a spousal IRA, as long as the spouse has adequate compensation. The maximum amount that a non-working or low-earning spouse can contribute is the same as the limit for

February 16, 2015 Taxes

The Affordable Care Act Can Bring Surprises at Tax Time

Category: Health Care Reform Tags: Insurance, Medical Article Highlights: New Tax Return Complications Shared Responsibility Payment Premium Tax Credit The Affordable Care Act, the federal health care law, will bring some surprises at tax time for many. This year there are two new issues that can complicate the preparation of almost anyone’s tax return. First, there is the shared responsibility payment, a nice name the government gave to the penalty for not being insured. So everyone who is uninsured is subject to a monthly penalty, assessed on the individual 1040 tax return, unless they meet one or more of the many exceptions to the penalty. Many of the exceptions are

February 9, 2015 Advisory & Consulting, Taxes

Retirement Savings: the Earlier, the Better

Category: Retirement Planning Tags: Savings Article Summary: Teenagers and young adults Tax-free accumulation Earned income requirement Roth IRA Generally, teenagers and young adults do not consider the long-term benefits of retirement savings. Their priorities for their earnings are more for today than that distant and rarely considered retirement. Yet contributions to a retirement plan early in life can enjoy years of growth and provide a substantial nest egg at retirement. Due to its long-term benefits of tax-free accumulation, a nondeductible Roth IRA may be the best option. During most individuals’ early working years, their income is usually at its lowest, allowing them to qualify for a Roth IRA at a

January 24, 2015 Compliance, Taxes

Are You Required to File 1099s?

Article Highlights: 1099-MISC Filing Requirements Independent Contractor Filing Threshold Form W-9 If you use independent contractors to perform services for your business and you pay them $600 or more for the year, you are required to issue them a Form 1099-MISC after the end of the year to avoid facing the loss of the deduction for their labor and expenses. The 1099s for 2014 must be provided to the independent contractor no later than February 2, 2015. It is not uncommon to, say, have a repairman out early in the year, pay him less than $600, and then use his services again later and have the total for the year

January 15, 2015 Taxes

Take Advantage of Education Tax Benefits

Article Highlights: Student loans Gifting low basis assets Education credits Education savings programs Educational savings bond interest The tax code includes a number of incentives that, with proper planning, can provide tax benefits while you, your spouse, or children are being educated. Which of these options will provide the greatest tax benefit depends on each individual’s particular circumstances. The following is an overview of the various possibilities. Student Loans – A major planning issue is how to finance your children’s education. Those with substantial savings simply pay the expenses as they go while others begin setting aside money far in advance of the education need, perhaps utilizing a Coverdell account

January 14, 2015 Accounting, Audit, Taxes

Beware Of the One-per-12-Month IRA Rollover Limitation Beginning In 2015

Article Highlights: 60-Day limit New interpretation New one-per-12-month-period rollover rule Types of plans included The tax code allows an individual to take a distribution from his or her IRA account and avoid the tax and early distribution penalties if the distribution is redeposited to an IRA account owned by the taxpayer within 60 days of receiving the distribution. Early in 2014, in a tax court case, the court ruled that taxpayers could only have one IRA rollover per 12-month period. This was contrary to the IRS’s long-standing one rollover per every IRA account every 12 months. This far more liberal position was also included in published IRS guidance. However, contrary

January 7, 2015 Accounting, Advisory & Consulting, Compliance, Taxes

What to Do if You Receive a Dreaded IRS Letter

Article Highlights: CP2000 Series Notices Automated Frequently Issued In Error What You Should Do   hen the IRS thinks it has found an issue with your tax return, it will contact you via mail with a CP series notice (most commonly CP2000). Please note that the IRS will never call or e-mail you initially about a tax delinquency. This is a trick used by scammers that has become quite prevalent. Most commonly, these notices will include a proposed tax due and any interest or penalties. The notice will include an explanation of the examination process and how you can respond. These automated notices are sent out year-round and are quite

Accounting, Advisory & Consulting, Taxes

Family, Income, and Residence Changes Can Affect Your Premium Tax Credit

Article Highlights: Advance premium tax credit (APTC) Repayment avoidance Things you should report Special enrollment period f you get health insurance coverage through a government Health Insurance Marketplace, it is very important that you keep the Marketplace aware of any changes in household income, marital status, and family size. If you are receiving advance payments of the premium tax credit, it is particularly important that you report changes in circumstances, including moving, to the Marketplace. There’s a simple reason: reporting these income and life changes lets the Marketplace update the information used to determine your eligibility for a Marketplace plan, which may affect the appropriate amount of advance payments of