Owners of incorporated businesses know there’s a tax advantage to taking money out of a C corporation as compensation rather than as dividends. The reason: A corporation can deduct the salaries and bonuses that it pays executives, but not dividend payments. Therefore, if funds are...
Payable-on-death accounts can provide a quick, simple and inexpensive way to transfer assets outside of probate. They can be used for bank accounts, certificates of deposit and even brokerage accounts....
This calendar notes important tax deadlines for the second quarter of 2024....
Business owners who wish to set up a retirement plan for themselves and their employees may be worried about the financial commitment and administrative burdens involved. This article looks first at a “simplified employee pension” (SEP). Small business owners who establish and contribute to...
Businesses that are seeking to hire should be aware of a valuable tax credit for hiring individuals from one or more targeted groups. Employers can qualify for the Work Opportunity Tax Credit (WOTC), which is worth as much as $2,400 for most eligible employees ($4,800,...
At one time, life insurance played a much bigger role in estate planning than it does now. That’s because life insurance was needed to pay estate tax, which affected more people than it does now. With the federal gift and estate tax exemption now at...
Parents know that raising children is expensive. Although some of the enhancements of the Child Tax Credit (CTC) have expired, the credit is still available for eligible parents of children under age 17. Plus, there’s still time for taxpayers to claim the CTC on...
Taxpayers preparing to file tax returns for 2023 may still have an opportunity to lower their tax bills. Those who are eligible can make tax-deductible contributions to traditional IRAs right up until this year’s April 15 tax-filing deadline, and benefit from the tax savings on...
To support a charitable deduction, taxpayers need to comply with IRS substantiation requirements. But what if the taxpayer never receives a letter from the charity substantiating a donation? This article explains the rules....
The qualified business income (QBI) deduction, authorized by the Tax Cuts and Jobs Act (TCJA), is available to owners of pass-through entities — such as S corporations, partnerships and limited liability companies (LLCs) — as well as self-employed individuals. This article highlights how the QBI...
For employers and their employees traveling for business this year, there are a number of considerations to keep in mind. Under the tax law, in order to claim deductions, certain requirements for out-of-town business travel within the United States must be met. The rules apply...
If a small business is operated as a sole proprietorship, the owner may have thought about forming a limited liability company (LLC) to protect his or her assets. Or, if the owner is launching a new business, he or she may want to know what...
The IRS will soon announce the opening of the 2023 individual income tax return filing season. Even for taxpayers who don’t typically file until much closer to the April 15 deadline (or file for an extension), it’s a good idea to file earlier this year....
Anyone in the process of making a retirement or estate plan, or who intends to donate property to charity, needs to know the value of their assets. For many hard-to-value items — such as closely held business interests, real estate, art or collectibles — an...
Many businesses are eligible for current tax write-offs for certain equipment purchases and building improvements. These write-offs can do wonders for cash flow, but whether to claim them isn’t always an easy decision. In some cases, there are advantages to choosing the regular depreciation rules....
This calendar notes important tax deadlines for the first quarter of 2024....
Self-employed individuals, and those with income from interest, rent, dividends and other sources, generally must pay estimated tax payments throughout the year. Mishandling these payments could trigger penalties. This brief article offers three strategies for getting it right, and a reminder that the next due...
Traditional and Roth IRAs can be relatively “safe” retirement-saving vehicles, depending on what they’re invested in. But one drawback is that they limit the account owner’s investment choices. A self-directed IRA provides more flexibility in investment choices but comes with greater risk as well. ...
One popular fringe benefit that an employer can offer is an education assistance program that allows employees to continue learning, and perhaps earn degrees, with financial help from the employer. A business can attract, retain and motivate employees by providing these benefits so that team...
Whether a business is new or established, losses can happen. The federal tax code may help soften the blow by allowing businesses to apply losses to offset taxable income in future years, subject to certain limitations....
Many Americans receive disability income, and the question is often asked: Is it taxable? The short answer is: That depends on who paid for it. This article details how and when taxes may apply. A sidebar discusses how much disability coverage an individual may need....
This brief article highlights how businesses may be able to secure bad debt deductions. This tax treatment isn’t automatic. A business must be able to show that the debt in question is worthless. The article explains the ins and outs of claiming a business bad...
Taxpayers who have IRAs and Health Savings Accounts (HSAs) can transfer funds directly from their IRAs to their HSAs, under certain conditions. This is a once-in-a-lifetime transfer, without penalties or taxes, intended to help taxpayers who are hit with high medical bills that exceed the...
For charitable donations of cash and property to be deductible, they must meet certain IRS criteria. This short article discusses some of the basic rules and explains how to determine if the charity is a qualified charitable organization....
Many people who began working from home during the COVID-19 pandemic are still doing so, full or part-time. Business owners who moved their operations to a home office, or at least began performing some work functions there, may be able to claim home office expenses...
Individual taxpayers may be able to claim medical expense deductions on their tax returns. However, the rules can be challenging, and it can be difficult to qualify. This article offers up five points to keep in mind about the deductibility of medical expenses....
Receiving a sudden and sizable influx of cash may seem like a dream come true. It can be, but many people get carried away by a windfall and end up in worse financial shape. This article points out some of the pitfalls and how to...
Business owners sometimes decide to put their companies on the market. When doing so, they may focus on the federal tax implications of a sale. But there will be state tax implications, too. This brief article touches on some key issues regarding state taxes....
This calendar notes important tax deadlines for the fourth quarter of 2023....
When a married couple files a joint tax return, each spouse is “jointly and severally” liable for the full amount of tax on the couple’s combined income. Therefore, the IRS can pursue either spouse to collect the entire tax — not just the part that’s...
