Why you may want to accelerate your property tax payment into 2017

| Tax Briefs

Accelerating deductible expenses, such as property tax on your home, into the current year typically is a good idea. Why? It will defer tax, which usually is beneficial. Prepaying property tax may be especially beneficial this year, because proposed tax legislation might reduce or eliminate the benefit of the property tax deduction beginning in 2018. Proposed changes The initial version of the House tax bill would cap the property tax deduction for individuals at $10,000. The initial version Read more [...]

2017 might be your last chance to hire veterans and claim a tax credit

| Tax Briefs

With Veterans Day on November 11, it’s an especially good time to think about the sacrifices veterans have made for us and how we can support them. One way businesses can support veterans is to hire them. The Work Opportunity tax credit (WOTC) can help businesses do just that, but it may not be available for hires made after this year. As released by the Ways and Means Committee of the U.S. House of Representatives on November 2, the Tax Cuts and Jobs Act would eliminate the WOTC for hires after Read more [...]

Accelerate your retirement savings with a cash balance plan

| Tax Briefs

Business owners may not be able to set aside as much as they’d like in tax-advantaged retirement plans. Typically, they’re older and more highly compensated than their employees, but restrictions on contributions to 401(k) and profit-sharing plans can hamper retirement-planning efforts. One solution may be a cash balance plan.   Defined benefit plan with a twist   The two most popular qualified retirement plans — 401(k) and profit-sharing plans — are defined contribution plans. These Read more [...]

Retirement savings opportunity for the self-employed

| Tax Briefs

Did you know that if you’re self-employed you may be able to set up a retirement plan that allows you to contribute much more than you can contribute to an IRA or even an employer-sponsored 401(k)? There’s still time to set up such a plan for 2017, and it generally isn’t hard to do. So whether you’re a “full-time” independent contractor or you’re employed but earn some self-employment income on the side, consider setting up one of the following types of retirement plans this year.   Profit-sharing Read more [...]

President Trump and key lawmakers reveal tax reform plan

| Tax Briefs

The Trump Administration and select members of Congress have released a "unified framework" for tax reform that they’ve been working on during the last three months. The document provides more detail of what elements they are considering for reform, but it still leaves many specifics to be worked out by the tax-writing committees (i.e., the House Ways and Means Committee and the Senate Finance Committee). Yesterday, October 19, 2017, the Senate voted for a blueprint budget that will likely be Read more [...]

Substantiating Business Expenses & Deductions in Audits

| Business Miscellaneous, Tax Briefs

Substantiating business expenses is a common problem for many businesses going through an audit with either the Internal Revenue Service (IRS) or their State Department of Revenue. You are probably like most business people. You don’t get up in the morning excited about keeping your tax records. But if you want to be in business and not suffer when the IRS audits your tax returns, you need to keep tax records. This takes a little time and requires some knowledge. Substantiating business expenses Read more [...]

“Bunching” medical expenses will be a tax-smart strategy for many in 2017

| Tax Briefs

Various limits apply to most tax deductions, and one type of limit is a “floor,” which means expenses are deductible only if they exceed that floor (typically a specific percentage of your income). One example is the medical expense deduction.   Because it can be difficult to exceed the floor, a common strategy is to “bunch” deductible medical expenses into a particular year where possible. If tax reform legislation is signed into law, it might be especially beneficial to bunch deductible Read more [...]

2017 Q4 tax calendar: Key deadlines for businesses and other employers

| Tax Briefs

Here are some of the key tax-related deadlines affecting businesses and other employers during the fourth quarter of 2017. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. Contact us to ensure you’re meeting all applicable deadlines and to learn more about the filing requirements. October 16 If a calendar-year C corporation that filed an automatic six-month extension: File a 2016 income tax return (Form 1120) and pay any tax, Read more [...]

Why you should boost your 401(k) contribution rate between now and year-end

| Tax Briefs

One important step to both reducing taxes and saving for retirement is to contribute to a tax-advantaged retirement plan. If your employer offers a 401(k) plan, contributing to that is likely your best first step. If you’re not already contributing the maximum allowed, consider increasing your contribution rate between now and year-end. Because of tax-deferred compounding (tax-free in the case of Roth accounts), boosting contributions sooner rather than later can have a significant impact on Read more [...]

Watch out for potential tax pitfalls of donating real estate to charity

| Tax Briefs

Charitable giving allows you to help an organization you care about and, in most cases, enjoy a valuable income tax deduction. If you’re considering a large gift, a noncash donation such as appreciated real estate can provide additional benefits. For example, if you’ve held the property for more than one year, you generally will be able to deduct its full fair market value and avoid any capital gains tax you’d owe if you sold the property. There are, however, potential tax pitfalls you must Read more [...]