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
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
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
Save tax- or at least defer it- by carefully timing business income and expenses The first step to smart timing is to project your business’s income and expenses for 2015 and 2016. With this information in hand, you can determine the best year-end timing strategy for your business. If you expect to be in the same or lower tax bracket in 2016, consider: Deferring income to 2016. If your business … Read more
Two Tax Consequences to consider if you’re refinancing a home Now may be a great time to refinance, because mortgage rates are still low but expected to increase. Before deciding to refinance, however, here are a couple of tax consequences to consider: Cash-out refinancing. If you borrow more than you need to cover your outstanding mortgage balance, the tax treatment of the cash-out portion depends on how you use the … 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
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
