Monthly Archives January 2017

Make Tax Friends with Passive Activity Losses

Losses can be used, within certain limits, to offset other highly-taxed income, such as salary from a job. However, in general, losses from “passive” activities 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. The tax law generally defines a passive activity as a trade or business in which you do not “materially participate.” The IRS has established various tests for determining whether someone qualifies as a material participant. For instance, if you participate in the activity for more than 500 hours during the
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Categories: Newsletter and Updates.

Tax Fraud Awareness: How to Protect Your Identity and Assets

The IRS, taxpayers and tax preparers share a common enemy: identity thieves. We all have a part to play in the fight against tax-related identity theft. Your role starts by learning the mechanics and warning signs. From there, taxpayers can take proactive steps to protect their data online and at home. Understand How Tax Fraud Happens Dishonest individuals may steal taxpayers’ personal and financial information from sources outside the IRS, such as social media accounts where people tend to share too many details or bogus phishing emails that appear to come from the IRS or a bank. Once they obtain
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Categories: Newsletter and Updates.

IRS updates FAQs on Certain ACA Provisions

The Trump Administration and the Republican majority in Congress plan to repeal and replace the Affordable Care Act (ACA) in the coming months. In the meantime, however, employers must continue to comply with the existing rules for 2016, including the information reporting requirements and shared responsibility provisions. The IRS previously issued three sets of FAQs that provide guidance on employer responsibilities under the Affordable Care Act (ACA). This guidance was recently updated to include significant clarifications and help employers ensure that they’re in compliance with the rules. Here, we highlight the extensive updates that were issued in December 2016 and
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Categories: Newsletter and Updates.

Thinking about Selling Your Business? Add Value Now

Business succession and exit planning should ideally be done over a long period of time (unless illness or another emergency makes it necessary to address them in the short term). Your business should be readied for sale on a continuing basis. But as you get closer to the time you want to sell, you should make changes to enhance the value. It’s similar to putting a house on the market. Before you put up the “for sale” sign, you fix deficiencies and highlight coveted features. Do the same before selling your business. Cash Flow and Revenue Drive Value Most privately
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Categories: Newsletter and Updates.

Nurture Understanding Between Generations for a Peaceful Workplace

Is there frustration building in your organization due to clashing generations about work? If so, you are not alone. The good news is it doesn’t need to trigger an explosion. In many workplaces, Baby Boomer and Gen X supervisors are exasperated with younger workers — typically those in the Millennial generation, who were born between 1981 and 2000. Some older supervisors have trouble managing the younger workers. By the same token, Millennial generation employees often are demoralized by an environment they do not find conducive to doing their best work. Be Proactive If you are facing these issues, don’t wait
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Categories: Newsletter and Updates.

Transferring Real Estate to Heirs: Issues that Can Arise Without a Will

When someone dies owning real estate, problems may occur — especially if the individual doesn’t have a will. This article addresses some of the issues that could arise so that you can plan ahead to make the process go smoothly for your heirs. A person can leave real property specifically to someone in a will or trust. For example, a father can leave a residence or vacation home to one of his three adult children by simply listing it in his will. Real estate can also be left to heirs as part of an individual’s net estate or residuary estate.
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Categories: Newsletter and Updates.

Land Is Not Always a Low-Taxed Capital Asset

In one U.S. Tax Court decision involving several consolidated cases, the court concluded that gains from a partnership’s land sales were high-taxed ordinary income rather lower-taxed long-term capital gains. We’ll explain the decision, but first let’s cover some background information. Capital Gains Tax Basics Long-term gains recognized by individual taxpayers from the sale of capital gain assets are taxed at lower federal rates than ordinary income. Currently, 20% is the maximum federal income tax rate on net long-term capital gains from most capital assets held for more than one year. That ignores the possibility that the 3.8% Medicare surtax on net
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Categories: Newsletter and Updates.

Tax Alert on Real Estate Sales by Foreigners

The IRS issued a two-part warning concerning certain real estate transactions. The warning focuses on the tax law provisions for sales of U.S. properties that involve ownership by foreign individuals and entities. Specifically, the affected transactions involve: The disposition by a foreign person of an option or contract to acquire a U.S. real property interest. According to the IRS, a U.S. real property interest includes options or contracts to acquire land or land improvements and leaseholds of land or land improvements. The disposition by a foreign corporation of a U.S. real property interest by way of a transfer to a
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Categories: Newsletter and Updates.

Important Tax Figures for 2017

Every year, the dollar amounts allowed for various federal tax benefits are subject to change based on inflation adjustments and legislation. Here are some important tax figures for 2017, compared with 2016, including the estate tax exemption, Social Security wage base, qualified retirement plan and IRA contribution limits, driving deductions, allowable business write-off amounts and more.     The following table provides some important federal tax information for 2017, as compared with 2016. Many of the dollar amounts are unchanged or have changed only slightly due to low inflation. Other amounts are changing due to legislation.   Social Security/ Medicare
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Categories: Newsletter and Updates.

Want Your Estate to Avoid Probate? Six Ways to Make it Happen

Have you taken time recently to think over the issues involved in your estate? One consideration is whether or not you want your estate to go through probate. If you want your heirs to avoid it, there are some steps you can take. This article explains the basics of probate and provides six ways your heirs may be able to skip it. Life is busy. If you’re like most people, you have a long list of things to do. However, it’s critical to make time regularly to consider whether you’ve set up your estate in a way that will result
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Categories: Newsletter and Updates.