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
When will Congress pass “extenders” legislation to revive expired tax breaks for 2015? With Congress returning from its August recess, this is the question on tax-savvy Americans’ minds. Many valuable tax breaks aren’t permanent, so Congress has to pass legislation extending them to keep them in effect. Unfortunately, Congress often waits until the last minute to do so. For example, Congress didn’t pass 2014 extenders until December 2014, making the … Read more
All income investments aren’t alike when it comes to taxes The tax treatment of investment income varies, and not just based on whether the income is in the form of dividends or interest. Qualified dividends are taxed at the favorable long-term capital gains tax rate (generally 15% or 20%) rather than at the applicable ordinary-income tax rate (which might be as high as 39.6%). Interest income generally is taxed at … Read more
Taxes with an IC-DISC Help Save for Exporters and others If your business exports American-made goods or performs architectural or engineering services for foreign construction projects. Then an interest-charge domestic international sales corporation (IC-DISC) can help slash your taxes. An IC-DISC is a “paper” corporation you set up to receive commissions on export sales. This is up to the greater of 50% of net income or 4% of gross receipts … 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
Recently-enacted law contains tax return filing due date changes On July 31, 2015, President Obama signed into law P.L. 114-41, the “Surface Transportation and Veterans Health Care Choice Improvement Act of 2015.” Although this new law was primarily designed as a 3-month stopgap extension of the Highway Trust Fund and related measures, it includes a number of important tax provisions, including revised due dates for partnership and C corporation returns … Read more
Teens within your family with summer jobs? Establish IRAs for them! Set up IRA for your teens: Teenagers’ retirement may seem too far off to warrant saving now, but IRAs can be perfect for teens precisely because they’ll likely have many years to let their accounts grow tax-deferred or tax-free. The 2015 contribution limit is the lesser of $5,500 or 100% of earned income. A teen’s traditional IRA contributions typically … Read more
Mortgage Interest Rates- Act quick if you want to help your child buy a home Mortgage interest rates are still at historically low levels, but they’re expected to go up by year end. So if you’ve been thinking about helping your child — or grandchild — buy a home, consider acting soon. There also are some favorable tax factors for mortgage rates that will help: 0% capital gains rate. If … Read more
Tread carefully when determining compensation for S corp. shareholder-employees Determining Compensation for S corp. Shareholder-Employees: By distributing profits in the form of dividends rather than salary. An S corporation and its owners can avoid payroll taxes on these amounts. Because of the additional 0.9% Medicare tax on wages in excess of $200,000 ($250,000 for joint filers and $125,000 for married filing separately). The potential tax savings may be even greater … Read more
