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. … Read more
You may be aware of the rule that allows businesses to deduct bonuses employees have earned during a tax year if the bonuses are paid within 2½ months after the end of that year (by March 15 for a calendar-year company). But this favorable tax treatment isn’t always available. For one thing, only accrual-basis taxpayers can take advantage of the 2½ month rule — cash-basis taxpayers must deduct bonuses in … Read more
In order to take advantage of two important depreciation tax breaks for business assets, you must place the assets in service by the end of the tax year. So you still have time to act for 2016. Section 179 deduction The Sec. 179 deduction is valuable because it allows businesses to deduct as depreciation up to 100% of the cost of qualifying assets in year 1 instead of depreciating the … Read more
2 Extended Credits Can Save Businesses Taxes on 2015 returns The Protecting Americans from Tax Hikes Act of 2015 (PATH Act) extended a wide variety of tax breaks, in some cases making them permanent. Extended breaks include many tax credits — which are particularly valuable because they reduce taxes dollar-for-dollar (compared to deductions, for example, which reduce only the amount of income that’s taxed). Here are two extended credits that … Read more
IP PIN Required for Identity Theft Victims’ 2015 Returns In mid December, the IRS issued CP01A notices containing a 6-digit Identity Protection Personal Identification Number (IP PIN) for taxpayers who are victims of tax-related identity theft. This notice is sent to taxpayers who: (1) reported to the IRS they are a victim of identity theft; (2) have been identified by the IRS as a victim of identity theft; (3) received … Read more
7 highly suggested last-minute tax-saving tips The year is quickly drawing to a close, but there’s still time to take steps to reduce your 2015 tax liability — here are some tips you must act on by December 31: Pay your 2015 property tax bill that’s due in early 2016. Make your January 1 mortgage payment. Incur deductible medical expenses (if your deductible medical expenses for the year … Read more
Protect your deduction: Verify tax-deductible contributions before you donate Donations to qualified charities are generally fully deductible, and they may be the easiest deductible expense to time to your tax advantage. After all, you control exactly when and how much you give. But before you donate, it’s critical to make sure the charity you’re considering is indeed a qualified charity — that it’s eligible to receive tax-deductible contributions. The IRS’s … Read more
2015 Year End Tax-Saving Planning Year-end tax planning for 2015 must take account of the many important “temporary” tax provisions that have expired and may not be retroactively reinstated and extended before year-end (if they are extended at all). They include: Election to claim sales and use taxes as an itemized deduction instead of state income taxes Charitable distributions from IRAs for those age 70-1/2 and older Bonus first-year depreciation … Read more
What you need to know before donating collectibles If you’re a collector, donating from your collection instead of your bank account or investment portfolio can be tax-smart. When you donate appreciated property rather than selling it, you avoid the capital gains tax you would have incurred on a sale. And long-term gains on collectibles are subject to a higher maximum rate (28%) than long-term gains on most long-term property (15% … Read more
