The Tax Cuts and Jobs Act (TCJA) mandates multiple changes to the tax treatment of employee benefits. This article notes that, though the TCJA was signed into law too late for employers to have made many adjustments to benefits offerings for 2018, they need to know how the changes will affect their businesses’ 2018 taxes. They also will need to determine whether they want to make any adjustments to their benefits packages going forward.Read More
One of the best strategies for business owners attempting to reduce their tax burden continues to be investing in business assets that will provide large depreciation-related deductions. In fact, as this article points out, such investments could provide larger deductions in 2018 than in 2017, thanks to the Tax Cuts and Jobs Act. In addition to discussing the potential benefits of bonus depreciation, the article explains how qualifying for Section 179 expense might be a strategy also worth investigating.Read More
One of the areas most affected by the recent Tax Cuts and Jobs Act (TCJA) is planning for deductions. This article explains how the TCJA might change year-end tax planning and which deductions make sense under the new rules. The article looks at itemizing and discusses home-related interest, medical expense and charitable contribution deductions, among others. A sidebar lists the itemized deductions that the TCJA has suspended.Read More
Roth IRAs offer some important tax advantages over traditional IRAs.For example, qualified Roth IRA withdrawals are tax-free for federal purposes. And, unlike with traditional IRAs, you don’t have to start taking required minimum distributions from Roth IRAs after reaching age 70 1/2, so the assets can grow tax-free indefinitely. This article explains that the quickest way to get a significant sum into a Roth IRA is by converting a traditional IRA to Roth status but a conversion won’t be beneficial for every taxpayer. It also notes that a Tax Cuts and Jobs Act provision could make Roth IRA conversions riskier from a tax perspective.Read More
Like many business owners, you probably created a business plan when you launched your company. But, as is also often the case, you may not have looked at it much since then. Now that fall has arrived and year end is coming soon, why not dig it out? Reviewing and revising a business plan can be a great way to plan for the year ahead.Read More
Technology is tricky. Much of today’s software is engineered so well that it will perform adequately for years. But new and better features are being created all the time. And if you’re not getting as much out of your financial data as your competitors are, you could be at a disadvantage.Read More
There are several reasons for hiring household help, including child or elder care or general cleaning and yard maintenance. However, when a person hires outside help, he or she becomes an employer. Thus, that person has specific tax obligations, such as withholding and paying Social Security and Medicare (FICA) taxes and possibly federal and state unemployment insurance. This article examines the tax-related responsibilities associated with hiring outside help.Read More
Ambiguity in the tax code and regulations has led many limited liability company (LLC) members to take an aggressive position regarding self-employment (SE) tax. They claim that their distributive shares of LLC income — after deducting compensation for services in the form of guaranteed payments — aren’t subject to the tax.
Recently, however, the IRS has been cracking down on LLC members it claims have under reported SE taxes, seeking back taxes and penalties, with some success in court. Considering these developments, it’s a good idea for LLC members to review their treatment of SE tax. (For the purposes of this article, LLCs also refer to limited liability partnerships and professional limited liability companies.)Read More
These brief tips explain that home equity loan interest may still be deductible post–Tax Cuts and Jobs Act (TCJA), detail two changes the TCJA made to business losses, and discuss whether a qualified personal residence trust is still relevant today.Read More
When school lets out, kids participate in a wide variety of summer activities. If one of the activities your child is involved with is day camp, you might be eligible for a tax credit!
Day camp (but not overnight camp) is a qualified expense under the child and dependent care credit, which is worth 20% of qualifying expenses (more if your adjusted gross income is less than $43,000), subject to a cap. For 2018, the maximum expenses allowed for the credit are $3,000 for one qualifying child and $6,000 for two or more.Read More