Archives for Newsletter and Updates

Have you met with your tax adviser to plan for 2016? The tax year is almost half over, and several new and expanded tax-saving opportunities are available under recent legislation. Moreover, some tax breaks have been made permanent, adding certainty to a few of your tax planning strategies. Here are some ideas for individuals and small businesses to lower their tax obligations this year.   Numerous tax breaks have been retroactively expanded for 2015 and beyond — or, in some cases, been made permanent — under the Protecting Americans from Tax Hikes (PATH) Act of 2015. Now that the dust
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This election season, Republicans and Democrats don’t seem to agree on much. But 95% of voters — regardless of which U.S. presidential candidate they favor — support American-made products. The vast majority of Americans also favor training programs, trade enforcement, tax incentives and a national strategy to support U.S. manufacturing, according to the Alliance for American Manufacturing. This organization is a not-for-profit, nonpartisan partnership of leading domestic manufacturers and the United Steelworkers labor union. With the momentum that’s building behind the Made-in-America label, it may be time for your business to rethink its supply chain partners and marketing strategy. Assessing
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A change in the rules governing overtime has been coming for two years, with a sneak preview of proposed modifications last year. But on May 18, the Department of Labor (DOL) came out with its new final rules, which take effect on December 1, 2016. The rules will significantly raise the salary level used to determine whether employees are eligible for overtime and will affect more than 4 million salaried employees, according to the DOL. The Obama administration’s goal was to reset the income threshold to the point it would have reached, with period inflation adjustments, had it not been
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Many business owners fail to follow the strict tax rules for substantiating vehicle expenses. But if your business is audited, the IRS will most likely ask for mileage logs if you deducted vehicle expenses — and it tends to be especially critical of the amount deducted if you’re self employed or you employ relatives. While the basics seem simple, there are numerous exceptions. Mileage Logs Taxpayers can deduct actual vehicle expenses, including depreciation, gas, maintenance, insurance and other vehicle operating costs. Or they can use the standard mileage method, which allows a deduction based on the standard rate for each
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Congress originally devised the alternative minimum tax (AMT) rules to ensure that high-income individuals who take advantage of multiple tax breaks will owe something to Uncle Sam each year. In recent years, however, that concept has eroded. Now, even upper-middle-income taxpayers are likely to owe the AMT. Here’s an overview of how the AMT works and possible ways to minimize it. AMT Basics Think of the AMT as an alternate set of tax rules that are similar to the regular federal income tax system. But there are key differences. For example, under the AMT rules, certain types of income that
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There can be negative tax consequences when purported loan payments are recast as corporate distributions to shareholders. The courts have ruled that withdrawals from two closely held corporations were constructive corporate distributions rather than loan proceeds and repayments in some cases. As such, the withdrawals triggered capital gains and taxable dividends for the shareholders. Corporate Distribution Basics Non-liquidating distributions paid by C corporations to individual shareholders can potentially fall into three different layers for federal income tax purposes. Withdrawals from each layer have different tax consequences. First Layer: Taxable Dividends to Extent of Earnings and Profits. Corporate distributions of cash or
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Some people think you can always deduct moving expenses on your federal income tax return. Not true. However, you can deduct some moving expenses if you meet the applicable eligibility rules. Good News, Bad News The good news is allowable moving expense write-offs are “above-the-line” deductions. As such, you don’t have to itemize these costs on your tax return to benefit. And the bad news? Your move must be considered work-related for you to be entitled to any deductions. The 50-Mile Test To meet the work-related requirement, you must first pass the 50-mile test. This means the distance between your
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Starting up a business and wondering about how tax deductions will be handled? The most important thing to understand is that most expenses incurred before a business begins functioning cannot be deducted or amortized until the year when the business does become active. Business Expense Basics Section 162 of the Internal Revenue Code allows current deductions for ordinary and necessary business expenses. Basically, Section 162 expenses are various expenses incurred in operating an up-and-running business. Examples include rent, utilities, employee wages, advertising and so forth. Such expenses can generally be deducted in the year when they are paid or incurred. However,
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After several years of processing, the U.S. Department of Labor (DOL) issued new fiduciary regulations on April 6. A previous attempt, back in 2010, was scrubbed when the investment community roundly criticized it as overkill. The new regulations seek to update the Employee Retirement Income Security Act (ERISA) enacted in 1974. Back then, the focus of ERISA was on traditional defined-benefit plans. Today, IRAs and 401(k) plans are far more prevalent in retirement planning. In announcing the final regulations, the White House asserted that conflicts of interest in the retirement advice business cost Americans roughly $17 billion each year. That’s
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