Estate tax deferral offers relief to some business owners

| Business Briefs

If a substantial portion of your wealth is tied up in a family or closely-held business, you may be concerned that your estate will lack sufficient liquid assets to pay estate taxes. In such cases, heirs may be forced to borrow funds or, in a worst-case scenario, sell the business in order to pay the tax. For some business owners, Internal Revenue Code Section 6166 provides welcome relief. It permits qualifying estates to make an election to defer a portion of their estate tax liability for up Read more [...]

To deduct business losses, you may have to prove “material participation”

| Tax Briefs

You can only deduct losses from an S corporation, partnership or LLC if you “materially participate” in the business. If you don’t, your losses are generally “passive” and can only be used to offset income from other passive activities. Any excess passive loss is suspended and must be carried forward to future years. Material participation is determined based on the time you spend in a business activity. For most business owners, the issue rarely arises — you probably spend more than Read more [...]

There’s still time for homeowners to save with green tax credits

| Tax Briefs

The income tax credit for certain energy-efficient home improvements and equipment purchases was extended through 2016 by the Protecting Americans from Tax Hikes Act of 2015 (the PATH Act). So, you still have time to save both energy and taxes by making these eco-friendly investments. What qualifies The credit is for expenses related to your principal residence. It equals 10% of certain qualified improvement expenses plus 100% of certain other qualified equipment expenses, subject to a maximum Read more [...]

HSA + HDHP = Your ideal benefits strategy?

| Tax Briefs

Health Savings Accounts (HSAs) were created as a tax-favored framework to provide health care benefits mainly for small-to-midsize businesses and the self-employed. So, assuming your company falls into one of these categories, have you considered the strategy of using these accounts with a high-deductible health plan (HDHP)? Tax benefits The tax benefits of HSAs are quite favorable and substantial. Eligible individuals can make tax-deductible (as an adjustment to AGI) contributions into HSA Read more [...]

3 keys to strong business financials

| Business Briefs

Businesses fail for many reasons — dysfunctional management, insufficient working capital, insurmountable competition. Why they succeed, on the other hand, is often easily explained. Regardless of size and sector, most healthy companies share the following three characteristics when it comes to their financials: 1. Ample revenue You’ve no doubt heard it before, but this cliché is true: Cash is king. Without a robust revenue stream coming in, profitability will be precarious. To determine Read more [...]

Beware of 3 mutual funds tax hazards

| Tax Briefs

Investing in mutual funds is an easy way to diversify a portfolio, which is one reason why they’re commonly found in retirement plans such as IRAs and 401(k)s. But if you hold such funds in taxable accounts, or are considering such investments, beware of these three tax hazards: High turnover rates. Mutual funds with high turnover rates can create income that’s taxed at ordinary-income rates. Choosing funds that provide primarily long-term gains can save you more tax dollars because of the Read more [...]

Why it’s time to start tax planning for 2016

| Tax Briefs

Now that the 2015 income tax filing deadline is in your rear view mirror, it may be tempting to set aside any thought of taxes until year-end is approaching. But don’t succumb. For maximum tax savings, now is the time to start tax planning for 2016. More opportunities A tremendous number of variables affect your overall tax liability for the year. Starting to look at these variables early in the year can give you more opportunities to reduce your 2016 tax bill. For example, the timing Read more [...]

The final rule

| Alerding Alerts

By Mike Staton     The U.S. Department of Labor (“DOL”) has issued the new overtime final regulations (“Final Rule”) which impact nonprofits as well as for profits.  The new rules will go into effect December 1, 2016 and will mean that most employees earning less than $47,476 will be entitled to overtime compensation regardless of their employment classification.  Neither the Federal Labor Standards Act (“FLSA”) nor the DOL’s regulations provide an exemption from overtime requirements Read more [...]