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: … Read more
The break allowing taxpayers to take an itemized deduction for state and local sales taxes in lieu of state and local income taxes was made “permanent” a little over a year ago. This break can be valuable to those residing in states with no or low income taxes or who purchase major items, such as a car or boat. Your 2016 tax return How do you determine whether you can … 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
Smart timing of deductible expenses can reduce your tax liability, and poor timing can unnecessarily increase it. When you don’t expect to be subject to the alternative minimum tax (AMT) in the current year, accelerating deductible expenses into the current year typically is a good idea. Why? Because it will defer tax, which usually is beneficial. One deductible expense you may be able to control is your property tax payment. … Read more
IRS had announced annual inflation adjustments for more than 50 tax provisions for tax year 2017, following are items of greatest interest to most taxpayers: Standard deduction for married filing jointly rises to $12,700 for tax year 2017, up $100 from the prior year. For single taxpayers and married individuals filing separately, the standard deduction rises to $6,350 in 2017, up from $6,300 in 2016, and for heads of … Read more
The election of Donald Trump as President of the United States could result in major tax law changes in 2017. Proposed changes spelled out in Trump’s tax reform plan released earlier this year that would affect businesses include: Reducing the top corporate income tax rate from 35% to 15%, Abolishing the corporate alternative minimum tax, Allowing owners of flow-through entities to pay tax on business income at the proposed 15% … Read more
The home office deduction is one of the most popular deductions for self-employed taxpayers who have an office in the home. If you work from home, you may be entitled to above the line deductions for the following: The “direct expenses” of the home office include depreciation deductions for equipment, furniture, and fixtures directly related or used in the home office. The costs of painting or repairing the home office … Read more
Crowdfunding and Kickstarter campaigns have become very popular over the last few years for entrepreneurs, inventors, individuals, and companies to raise funds to support their endeavors. If you are new to crowdfunding, an entrepreneur will ask for money via an online platform and anyone throughout the world can donate money for their cause. While the IRS has not provided much guidance on funds raised from crowdfunding and Kickstarter campaigns there … Read more
Why An Estimated Tax Checkup May Be Necessary It’s not a major disaster if you owed some money when you filed your return-after all, you’d rather have the use of the funds for as long as possible. But what you want to avoid is having to pay the IRS a penalty for underpaying your taxes during the year. If you owe the estimated tax underpayment penalty, which is nondeductible, you’re … Read more
