When an elderly parent might qualify

When an elderly parent might qualify as your dependent

| Tax Briefs

It’s not uncommon for adult children to help support their aging parents. If you’re in this position, you might qualify for the adult-dependent exemption. It allows eligible taxpayers to deduct up to $4,050 for each adult dependent claimed on their 2016 tax return. Basic qualifications For you to qualify for the adult-dependent exemption, in most cases your parent must have less gross income for the tax year than the exemption amount. (Exceptions may apply if your parent is permanently Read more [...]
2016 IRA contributions

2016 IRA contributions — it’s not too late!

| Tax Briefs

Yes, there’s still time to make 2016 contributions to your IRA. The deadline for such contributions is April 18, 2017. If the contribution is deductible, it will lower your 2016 tax bill. But even if it isn’t, making a 2016 contribution is likely a good idea. Benefits beyond a deduction Tax-advantaged retirement plans like IRAs allow your money to grow tax-deferred — or, in the case of Roth accounts, tax-free. But annual contributions are limited by tax law, and any unused limit can’t Read more [...]
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Listen and trust: The power of collaborative management

| Business Briefs

Many business owners are accustomed to running the whole show. But as your company grows, you’ll likely be better off sharing responsibility for major decisions. Whether you’ve recruited experienced managers or developed “home grown” talent, you can empower these employees by taking a more collaborative approach to management. Not employees — team members Successful collaboration starts with a new mindset. Stop thinking of your managers as employees and instead regard them as team Read more [...]
Tangible property safe harbors

Tangible property safe harbors help maximize deductions

| Tax Briefs

If last year your business made repairs to tangible property, such as buildings, machinery, equipment or vehicles, you may be eligible for a valuable deduction on your 2016 income tax return. But you must make sure they were truly “repairs”, and not actually “improvements”. Why? Costs incurred to improve tangible property must be depreciated over a period of years. But costs incurred on incidental repairs and maintenance can be expensed and immediately deducted. What’s an “improvement”? In Read more [...]
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What can a valuation expert do for your succession plan?

| Business Briefs, Business Miscellaneous

Most business owners spend a lifetime building their businesses. And when it comes to succession, they face the difficult decision of whether to sell, dissolve or transfer the business to family members (or a nonfamily successor). Many complicated issues are involved, including how to divvy up business interests, allocate value and tackle complex tax issues. Thus, as you put together your succession plan, include not only your financial and legal advisors, but also a qualified valuation professional. Various Read more [...]
Brainstorming businessman in boardroom

Envision your advisory board before you form it

| Business Briefs

Many companies reach a point in their development where they could benefit from an advisory board. It’s all too easy in today’s complex business world to get caught up in an “echo chamber” of ideas and perspectives that only originate internally. For many business owners, an understandable first question about the concept is: What should my advisory board look like? To find an answer, start by envisioning the ideal size and composition of your company’s board in terms of skill sets and Read more [...]
Do you need to file a 2016 gift tax return by April 18

Do you need to file a 2016 gift tax return by April 18?

| Tax Briefs

Last year you may have made significant gifts to your children, grandchildren or other heirs as part of your estate planning strategy. Or perhaps you just wanted to provide loved ones with some helpful financial support. Regardless of the reason for making a gift, it’s important to know under what circumstances you’re required to file a gift tax return. Some transfers require a return even if you don’t owe tax. And sometimes it’s desirable to file a return even if it isn’t required. When Read more [...]
The investment interest expense deduction

The investment interest expense deduction – Less beneficial than you might think

| Tax Briefs

Investment interest — interest on debt used to buy assets held for investment, such as margin debt used to buy securities — generally is deductible for both regular tax and alternative minimum tax purposes. But special rules apply that can make this itemized deduction less beneficial than you might think. Limits on the deduction First, you can’t deduct interest you incurred to produce tax-exempt income. For example, if you borrow money to invest in municipal bonds, which are exempt from Read more [...]
What you need to know about

What you need to know about the tax treatment of ISOs

| Tax Briefs

Incentive stock options allow you to buy company stock in the future at a fixed price equal to or greater than the stock’s fair market value on the grant date. If the stock appreciates, you can buy shares at a price below what they’re then trading for. However, complex tax rules apply to this type of compensation. Current tax treatment ISOs must comply with many rules but receive tax-favored treatment: You owe no tax when ISOs are granted. You owe no regular income tax when you exercise Read more [...]
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ESOP repurchase obligations are real

| Business Miscellaneous

By Mike Staton     All too often companies setting up an ESOP (Employee Stock Ownership Plan) concentrate on the legal documents, projections and banking arrangements without considering all of the long-term obligations. Not only do you have the cash flow requirements of the outside loan with the bank or the selling stockholders, you have future Repurchase Obligations to consider in an ESOP. Repurchase obligations are not required by GAAP to be recorded on the company’s financial statements, Read more [...]