January 16, 2018
The IRS has just announced that it will begin accepting 2017 income tax returns on January 29. You may be more concerned about the April 17 filing deadline, or even the extended deadline of October 15 (if you file for an extension by April 17). After all, why go through the hassle of filing your return earlier than you have to?
But it can be a good idea to file as close to January 29 as possible: Doing so helps protect you from tax identity theft. Continue reading
January 2, 2018
On December 20, Congress completed passage of the largest federal tax reform law in more than 30 years. Commonly called the “Tax Cuts and Jobs Act” (TCJA), the new law means substantial changes for individual taxpayers. Continue reading
December 26, 2017
Retirement plan contribution limits are indexed for inflation, but with inflation remaining low, most of the limits remain unchanged for 2018. But one piece of good news for taxpayers who are already maxing out their contributions is that the 401(k) limit has gone up by $500. The only other limit that has increased from the 2017 level is for contributions to defined contribution plans, which has gone up by $1,000. Continue reading
November 14, 2017
Veterans Day was on November 11, it’s an especially good time to think about the sacrifices veterans have made for us and how we can support them. One way businesses can support veterans is to hire them. The Work Opportunity tax credit (WOTC) can help businesses do just that, but it may not be available for hires made after this year. Continue reading
September 5, 2017
At back-to-school time, much of the focus is on the students returning to the classroom — and on their parents buying them school supplies, backpacks, clothes, etc., for the new school year. But let’s not forget about the teachers. It’s common for teachers to pay for some classroom supplies out of pocket, and the tax code provides a special break that makes it a little easier for these educators to deduct some of their expenses. Continue reading
February 10, 2015
Be sure to deduct all of the mileage you’re entitled to!
You probably know that miles driven for business purposes can be deductible. But did you know that you might also be able to deduct miles driven for other purposes? The rates vary depending on the purpose and the year:
Business: 56 cents (2014), 57.5 cents (2015)
Medical: 23.5 cents (2014), 23 cents (2015)
Moving: 23.5 cents (2014), 23 cents (2015)
Charitable: 14 cents (2014 and 2015)
The rules surrounding the various mileage deductions are complex, however. Some are subject to floors and some require you to meet specific tests in order to qualify. There are also substantiation requirements, which include tracking miles driven. And, in some cases, you might be better off deducting actual expenses rather than using the mileage rates.
So contact us to help ensure you deduct all the mileage you’re entitled to on your 2014 tax return — but not more. (You don’t want to risk back taxes and penalties later.) And if you drove potentially eligible miles in 2014 but can’t deduct them because you didn’t track them, then start tracking your miles now so you can potentially take advantage of the deduction when you file your 2015 return next year.
© 2015 Thomson Reuters/Tax & Accounting
January 20, 2015
The Tax Increase Prevention Act of 2014 (TIPA) extended through Dec. 31, 2014, a wide variety of tax breaks, including many tax credits — which are particularly valuable because they reduce taxes dollar-for-dollar. Here are three credits that businesses may benefit from when they file their 2014 returns:
1. The research credit. This credit (also commonly referred to as the “research and development” or “research and experimentation” credit) rewards businesses that increase their investments in research. The credit, generally equal to a portion of qualified research expenses, is complicated to calculate, but the tax savings can be substantial.
2. The Work Opportunity credit. This credit is available for hiring from certain disadvantaged groups, such as food stamp recipients, ex-felons and veterans who’ve been unemployed for four weeks or more. The maximum credit ranges from $2,400 for most groups to $9,600 for disabled veterans who’ve been unemployed for six months or more.
3. The Sec. 45L energy-efficient new home credit. An eligible construction contractor can claim a credit for each qualified new energy efficient home that the contractor built and that was acquired by a person from the contractor for use as a residence during 2014. The credit equals either $1,000 or $2,000 per unit depending on the projected level of fuel consumption.
Wondering if you qualify for any of these tax credits? Or what other breaks extended by TIPA could reduce your 2014 tax bill? Contact us!
© 2015 Thomson Reuters/Tax & Accounting
January 6, 2015
Many retirement plan contribution limits increase slightly in 2015; thus, you may have opportunities to increase your retirement savings:
Other factors may affect how much you can contribute (or how much your employer can contribute on your behalf). For example, income-based limits may reduce or even eliminate your ability to take advantage of IRAs. For more information on how to make the most of your tax-advantaged retirement-saving opportunities in 2015, please contact us.
© 2014 Thomson Reuters/Tax & Accounting
December 30, 2014
On Dec. 16, the Senate passed the Tax Increase Prevention Act of 2014 (TIPA), which the House had passed on Dec. 3. TIPA extended many valuable tax breaks that expired at the end of 2013 — but only through Dec. 31, 2014.
Here are three types of extended tax breaks that you may want to take action on before year end:
Additional rules and limits apply to these breaks, so please contact us to find out which ones you can benefit from.
© 2014 Thomson Reuters/Tax & Accounting
December 22, 2014
Why you should make annual exclusion gifts before year end 2014.
The 2014 gift tax annual exclusion allows you to give up to $14,000 per recipient tax-free without using up any of your lifetime gift tax exemption. If you and your spouse “split” the gift, you can give $28,000 per recipient.
The gifted assets are removed from your taxable estate, which can be especially advantageous if you expect them to appreciate. That’s because the future appreciation can avoid gift and estate taxes.
The exclusion is scheduled to remain at $14,000 ($28,000 for split gifts) in 2015. But that’s not a reason to skip making annual exclusion gifts this year. You need to use your 2014 exclusion by Dec. 31 or you’ll lose it.
The exclusion doesn’t carry from one year to the next. For example, if you don’t make an annual exclusion gift to your daughter this year, you can’t add $14,000 to your 2015 exclusion to make a $28,000 tax-free gift to her next year.
We can help you determine how to make the most of your 2014 gift tax annual exclusion.
© 2014 Thomson Reuters/Tax & Accounting
Boris Benic CPA 