The mid-term elections are over and there were sweeping changes made in Congress. Now more than ever is the time to review your situation to save money with year-end tax planning. We strongly encourage you to read the attached letter highlighting several areas of interest. We are available to help and guide you through these changes, please contact us at your earliest convenience if you have any questions or if you would like to schedule a meeting before year end so that we can advise you on a plan that best fits your needs.
Although you can’t avoid taxes, you can take steps to minimize them. This requires proactive tax planning — estimating your tax liability, looking for ways to reduce it and taking timely action.
There are a number of ways you can reduce your 2015 tax bill. From mitigating the effect of the Net Investment Income Tax to ideas for retirement and estate planning, CBIZ MHM has outlined several tips you can use for your year end planning in our 2015 Individual Tax Planning Supplement. We encourage you to carefully consider how the strategies discussed in the supplement will benefit you and your family. You can also contact your local CBIZ MHM professional for more information.
It is now time for all members of Congress — Democrat, Republican and Independent — to support pro-American tax reform. It’s time for Congress to provide a level playing field for our workers, to bring American companies back home, to attract new companies and businesses to our country, and to put more money into the pockets of everyday hardworking people. Go to www.passtaxreform.org to learn more.
Although you can’t avoid taxes, you can take steps to minimize them. This requires proactive tax planning — estimating your tax liability, looking for ways to reduce it and taking timely action.
There are a number of ways you can reduce your 2015 tax bill. From mitigating the effect of the Net Investment Income Tax to ideas for retirement and estate planning, CBIZ MHM has outlined several tips you can use for your year end planning in our 2015 Individual Tax Planning Supplement. We encourage you to carefully consider how the strategies discussed in the supplement will benefit you and your family. You can also contact your local CBIZ MHM professional for more information.
It is now time for all members of Congress — Democrat, Republican and Independent — to support pro-American tax reform. It’s time for Congress to provide a level playing field for our workers, to bring American companies back home, to attract new companies and businesses to our country, and to put more money into the pockets of everyday hardworking people. Go to www.passtaxreform.org to learn more.
Accountants, are you ready for the US?
In the United States, the fiscal powers of taxation is based on three levels: federal, state and municipal. The federal income tax, in particular, is a pay-as-you-go tax.
From November 7 to 10, the Italian accountants will stay in New York city, on a mission in the US. We went to look around the contents by the IRS (Inland Revenue Service) in the field of “Tax Withholding and Estimated Tax”, for use in 2016.
The federal income tax is a pay-as-you-go tax. You must pay the tax as you earn or receive income during the year. There are two ways to pay-as-you-go: Tax Withholding and Estimated Tax.
Tax Foundation University 2017, Part 6: Tax Reform, the Budget, and the Budge...Tax Foundation
This Tax Foundation University lecture covers:
— How the budget rules affect how you craft a tax reform plan
— How the Blueprint’s designers may have had the budget process in mind
— Alternative revenue sources, spending offsets, other means of coping with budget issues
— Are the deficit effects temporary or permanent?
— Are credits, cost recovery provisions, debt rules retroactive or prospective?
1. Time: A most Valuable Asset
2. Federal Budget 2016: A Recap
3. Perspective: A Story of Bulls and Bears
4. The Big Picture: Beneficiary Designations
5. How are my Dividends Taxed?
6. Understanding the Fees You Pay
This powerpoint training is the slides from the webinar I did on the taxing of social security and is placed on our training site.
If you want more training on annuities, selling or building your book of business visit us at www.7figuresalestools.com
Year-End Tax and Financial Planning by myStockOptions.comBruce Brumberg
This presentation provides a timely overview of year-end financial-planning and tax topics for stock compensation, including points of importance for employee education and for financial advisors. Special attention is given to issues involving tax-rate increases. While each annual edition features planning concerns specific to that year-end, the general ideas presented here are perennially useful.
Inside: CPA objectivity important when valuing a business; Court must unravel complicated real estate transfers; how to manage clients\' goodwill during a sale
Accountants, are you ready for the US?
In the United States, the fiscal powers of taxation is based on three levels: federal, state and municipal. The federal income tax, in particular, is a pay-as-you-go tax.
From November 7 to 10, the Italian accountants will stay in New York city, on a mission in the US. We went to look around the contents by the IRS (Inland Revenue Service) in the field of “Tax Withholding and Estimated Tax”, for use in 2016.
The federal income tax is a pay-as-you-go tax. You must pay the tax as you earn or receive income during the year. There are two ways to pay-as-you-go: Tax Withholding and Estimated Tax.
Tax Foundation University 2017, Part 6: Tax Reform, the Budget, and the Budge...Tax Foundation
This Tax Foundation University lecture covers:
— How the budget rules affect how you craft a tax reform plan
— How the Blueprint’s designers may have had the budget process in mind
— Alternative revenue sources, spending offsets, other means of coping with budget issues
— Are the deficit effects temporary or permanent?
— Are credits, cost recovery provisions, debt rules retroactive or prospective?
1. Time: A most Valuable Asset
2. Federal Budget 2016: A Recap
3. Perspective: A Story of Bulls and Bears
4. The Big Picture: Beneficiary Designations
5. How are my Dividends Taxed?
6. Understanding the Fees You Pay
This powerpoint training is the slides from the webinar I did on the taxing of social security and is placed on our training site.
If you want more training on annuities, selling or building your book of business visit us at www.7figuresalestools.com
Year-End Tax and Financial Planning by myStockOptions.comBruce Brumberg
This presentation provides a timely overview of year-end financial-planning and tax topics for stock compensation, including points of importance for employee education and for financial advisors. Special attention is given to issues involving tax-rate increases. While each annual edition features planning concerns specific to that year-end, the general ideas presented here are perennially useful.
Inside: CPA objectivity important when valuing a business; Court must unravel complicated real estate transfers; how to manage clients\' goodwill during a sale
Inside: Year-end tax planning for you and your practice; Eligibility for Medicare bonuses has expanded; Accepting online payments can increase collections
Redes de afiliados, vender pela internet. Como funciona venda por CPAMundo CPA
Para vender produtos pela internet,ter um grande número de pedidos e alto giro de produtos, use o sistema de vendas por CPA. Estamos a disposição para informações. www.mundocpa.com.br.
2021 Tax Savings Ideas for Individuals and Businesses.
This presentation and these materials are designed to provide information in regard to the subject matter
covered. This presentation and these materials are provided solely as a teaching tool, with the
understanding that Stephen Moskowitz, Moskowitz LLP, and the instructor are not engaged in rendering
legal, accounting, or other professional service and that they are not offering such advice in this
presentation and these accompanying materials.
How to Adjust Year-End Tax Strategies in an Uncertain Tax EnvironmentCBIZ, Inc.
Congress has the framework for a budget proposal that would increase taxes. Whether lawmakers will pass that framework is unclear. This uncertainty leaves business owners in a tricky spot for 2021 tax planning. This article describes what can be done, with reasonable certainty, in this tenuous environment.
The Fiscal Cliff and 10 Moves Every Investor Should Consider Making Now (...B...D.B. Geehan
Originally published Oct 2012 -- White Paper regarding moves every investor should consider making in the run-up to December 31, 2012 and the Fical Cliff.
End-of-year Tax Guide and Checklist for BusinessesMichael Burdick
Tax season for your business doesn't have to be scattered, painful, and time-consuming. Paro's End-of-year Tax Guide and Checklist for Businesses helps you get a handle on tax prep best practices, how your business structure impacts taxes, what you absolutely need to file taxes, and what your tax preparer needs from you.
Maximizing Your Tax Refund: Strategies to Boost Your ReturnsThe Kalculators
When tax season approaches, many individuals eagerly anticipate receiving a tax refund. A tax refund is the amount of money returned to you by the government when you've paid more in taxes than your actual tax liability. However, to make the most of this opportunity, it's crucial to understand effective strategies for maximizing your tax refund. In this blog post, we will explore several actionable tips that can help you boost your tax refund and put more money back in your pocket.
The right tax strategy stays current with your environment.
The political landscape isn’t the only thing changing in
2016. Estate planning opportunities are also shifting. This
supplement incorporates estate planning updates and other
considerations into tips designed to decrease your 2016 tax
bill. Charts throughout the supplement, including tax rates,
qualified retirement plan limitations and FICA/Medicare
taxes further help with your tax planning.
Prepare your 2017 tax filing and create efficiencies in your tax strategies for 2018. The CTS Financial Group Tax-Time Planning guide offers you tips for your 2017 return and ideas to help you stay on track this year.
In Issue 11 of The OHL Wire, we look at what will change on 1 July 2015 and how does divorce affect your tax and super fund. We also look at everything you need to know about taxation and deceased estates in Australia. We discuss the rules and requirements for buying property through a self-managed super fund (SMSF) in NSW. We check out upcoming events in Sydney and provide you a few ideas on how to spend your tax refund as the tax year is coming to an end.
Check out our Winter 2011 Client Advisor Newsletter. It includes articles on unemployment, manufacturing deductions, tips for starting a new business and more! Please contact us if you have any questions or we can assist you in any manner.
Check out our Client Advisor for Winter 2011. Includes articles on hiring practices, unemployment optoins, manufacturing deductions, tips for starting a new business and more!
The recently enacted federal healthcare legislation will affect virtually everyone and will mean significant changes for patients, insurers, employers, hospitals and physicians. This is one of the largest changes to the tax laws in the past 30 years. Are you interested in finding out how the Reform will affect you or your business? We want to help. We are offering presentations to businesses and groups to provide information on how the Reform may impact you.
For more information visit our website at www.kl-cpa.com.
Enterprise Excellence is Inclusive Excellence.pdfKaiNexus
Enterprise excellence and inclusive excellence are closely linked, and real-world challenges have shown that both are essential to the success of any organization. To achieve enterprise excellence, organizations must focus on improving their operations and processes while creating an inclusive environment that engages everyone. In this interactive session, the facilitator will highlight commonly established business practices and how they limit our ability to engage everyone every day. More importantly, though, participants will likely gain increased awareness of what we can do differently to maximize enterprise excellence through deliberate inclusion.
What is Enterprise Excellence?
Enterprise Excellence is a holistic approach that's aimed at achieving world-class performance across all aspects of the organization.
What might I learn?
A way to engage all in creating Inclusive Excellence. Lessons from the US military and their parallels to the story of Harry Potter. How belt systems and CI teams can destroy inclusive practices. How leadership language invites people to the party. There are three things leaders can do to engage everyone every day: maximizing psychological safety to create environments where folks learn, contribute, and challenge the status quo.
Who might benefit? Anyone and everyone leading folks from the shop floor to top floor.
Dr. William Harvey is a seasoned Operations Leader with extensive experience in chemical processing, manufacturing, and operations management. At Michelman, he currently oversees multiple sites, leading teams in strategic planning and coaching/practicing continuous improvement. William is set to start his eighth year of teaching at the University of Cincinnati where he teaches marketing, finance, and management. William holds various certifications in change management, quality, leadership, operational excellence, team building, and DiSC, among others.
Tata Group Dials Taiwan for Its Chipmaking Ambition in Gujarat’s DholeraAvirahi City Dholera
The Tata Group, a titan of Indian industry, is making waves with its advanced talks with Taiwanese chipmakers Powerchip Semiconductor Manufacturing Corporation (PSMC) and UMC Group. The goal? Establishing a cutting-edge semiconductor fabrication unit (fab) in Dholera, Gujarat. This isn’t just any project; it’s a potential game changer for India’s chipmaking aspirations and a boon for investors seeking promising residential projects in dholera sir.
Visit : https://www.avirahi.com/blog/tata-group-dials-taiwan-for-its-chipmaking-ambition-in-gujarats-dholera/
RMD24 | Debunking the non-endemic revenue myth Marvin Vacquier Droop | First ...BBPMedia1
Marvin neemt je in deze presentatie mee in de voordelen van non-endemic advertising op retail media netwerken. Hij brengt ook de uitdagingen in beeld die de markt op dit moment heeft op het gebied van retail media voor niet-leveranciers.
Retail media wordt gezien als het nieuwe advertising-medium en ook mediabureaus richten massaal retail media-afdelingen op. Merken die niet in de betreffende winkel liggen staan ook nog niet in de rij om op de retail media netwerken te adverteren. Marvin belicht de uitdagingen die er zijn om echt aansluiting te vinden op die markt van non-endemic advertising.
The world of search engine optimization (SEO) is buzzing with discussions after Google confirmed that around 2,500 leaked internal documents related to its Search feature are indeed authentic. The revelation has sparked significant concerns within the SEO community. The leaked documents were initially reported by SEO experts Rand Fishkin and Mike King, igniting widespread analysis and discourse. For More Info:- https://news.arihantwebtech.com/search-disrupted-googles-leaked-documents-rock-the-seo-world/
Premium MEAN Stack Development Solutions for Modern BusinessesSynapseIndia
Stay ahead of the curve with our premium MEAN Stack Development Solutions. Our expert developers utilize MongoDB, Express.js, AngularJS, and Node.js to create modern and responsive web applications. Trust us for cutting-edge solutions that drive your business growth and success.
Know more: https://www.synapseindia.com/technology/mean-stack-development-company.html
RMD24 | Retail media: hoe zet je dit in als je geen AH of Unilever bent? Heid...BBPMedia1
Grote partijen zijn al een tijdje onderweg met retail media. Ondertussen worden in dit domein ook de kansen zichtbaar voor andere spelers in de markt. Maar met die kansen ontstaan ook vragen: Zelf retail media worden of erop adverteren? In welke fase van de funnel past het en hoe integreer je het in een mediaplan? Wat is nu precies het verschil met marketplaces en Programmatic ads? In dit half uur beslechten we de dilemma's en krijg je antwoorden op wanneer het voor jou tijd is om de volgende stap te zetten.
Digital Transformation and IT Strategy Toolkit and TemplatesAurelien Domont, MBA
This Digital Transformation and IT Strategy Toolkit was created by ex-McKinsey, Deloitte and BCG Management Consultants, after more than 5,000 hours of work. It is considered the world's best & most comprehensive Digital Transformation and IT Strategy Toolkit. It includes all the Frameworks, Best Practices & Templates required to successfully undertake the Digital Transformation of your organization and define a robust IT Strategy.
Editable Toolkit to help you reuse our content: 700 Powerpoint slides | 35 Excel sheets | 84 minutes of Video training
This PowerPoint presentation is only a small preview of our Toolkits. For more details, visit www.domontconsulting.com
What is the TDS Return Filing Due Date for FY 2024-25.pdfseoforlegalpillers
It is crucial for the taxpayers to understand about the TDS Return Filing Due Date, so that they can fulfill your TDS obligations efficiently. Taxpayers can avoid penalties by sticking to the deadlines and by accurate filing of TDS. Timely filing of TDS will make sure about the availability of tax credits. You can also seek the professional guidance of experts like Legal Pillers for timely filing of the TDS Return.
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VAT Registration Outlined In UAE: Benefits and Requirementsuae taxgpt
Vat Registration is a legal obligation for businesses meeting the threshold requirement, helping companies avoid fines and ramifications. Contact now!
https://viralsocialtrends.com/vat-registration-outlined-in-uae/
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Putting the SPARK into Virtual Training.pptxCynthia Clay
This 60-minute webinar, sponsored by Adobe, was delivered for the Training Mag Network. It explored the five elements of SPARK: Storytelling, Purpose, Action, Relationships, and Kudos. Knowing how to tell a well-structured story is key to building long-term memory. Stating a clear purpose that doesn't take away from the discovery learning process is critical. Ensuring that people move from theory to practical application is imperative. Creating strong social learning is the key to commitment and engagement. Validating and affirming participants' comments is the way to create a positive learning environment.
2. You may be thinking “Is it that time again – time to try and
figure out what this year’s tax bill might turn out to be?” or,
perhaps, “Tax planning – why do I need to do that?”
Whether you’re new to tax planning or you have done it
consistently for years, tax planning for 2010 will likely be
both important and difficult.
With substantial healthcare legislation enacted and the lapse
(albeit temporary) of the estate tax and impending sunset
provisions of many of the Bush Administration’s tax cuts,
2010 stands to be a critical year for changes in tax law.
Despite some efforts to address these issues earlier this year,
it appears clear that lawmakers will not do so until after
the November elections. This makes 2010 year-end tax
planning particularly challenging and tenuous.
There are other uncertainties to consider, such as the
economy. How will my business do in the next year? Will
I still have my job next year? While these questions can’t
be answered by tax planning, the process will help you
focus on what is known, consider what is tentative,
highlight your options and understand the tax impact
of each.
Introduction
3. We recognize that not every year-end tax strategy
will apply to every reader. As you read through the list
below, check those items that you feel might apply to
your situation. Then you can easily go back to review
and follow up on the more pertinent planning points,
particularly should any last-minute legislation be enacted.
This letter certainly does not include every tax planning
opportunity that may be available to you. Be sure to
involve us, your CPAs. We are the ones keeping up with
the latest tax developments and can help you strategize
to reduce and/or defer your taxes.
4. No one likes to pay taxes any sooner than they have to. So,
year-end strategies typically focus on deferring income from this
year into future years and accelerating deductions from future
years into this year. (Although for 2010 planning, the reverse
may be applicable for some.)
Year-end tax planning involves considering two years at the same
time – this year and next. If possible, planning may involve the
next two to three years, but that is usually difficult to do. Also,
tax planning should be a dynamic process, changing as your
situation and the tax laws change. For more complex situations,
planning should be done throughout each year, revisiting specifics
at least twice.
Following are some basic principles that can help guide your
overall thinking:
➤ If you expect your tax rate to be higher next year, it might
make sense to accelerate income into this year and defer
deductions into next year.
➤ If you think your tax rate might be lower next year, consider
deferring income to next year and accelerating deductions
into this year.
➤ If your deductions might be restricted next year, accelerate
some into this year.
The
Basics
5. ➤ If you expect to qualify for the
standard deduction in either
year, consider shifting qualified
expenditures into the year
you expect to itemize your
deductions.
➤ Fewer deductions are allowed
for alternative minimum tax
(AMT). If you expect to pay
AMT in one year and not the
other, you may want to shift
deductions into the non-AMT year.
When evaluating specific items of income or deduction, you need to
consider your marginal tax rate – the highest rate at which your last,
or marginal, dollar of income will be taxed. However, because there are
typically several changes being considered simultaneously, the overall
projected tax result is what matters.
Finally, we all need to be reminded that, while the tax impact is a critical
component of any financial planning, it is only one piece of the puzzle. It is
one cost in light of the overall cost-benefit analysis we should consider. It
should not solely drive the financial decisions we make.
6. It is helpful to know the specific tax issues that are currently
up in the air. Fortunately, several business-related uncertainties
were resolved in the Small Business Jobs Act of 2010 that
became law on Sept. 27, 2010. We’ll discuss those in more
detail below. Following are a few of the more significant tax
issues still in question.
On Jan. 1, 2011, the graduated individual income tax rates
are scheduled to revert back to those we got accustomed to
several years ago, with each bracket having a higher rate than
now. Under the administration’s fiscal year 2011 budget
proposals, the lowest four brackets will remain at 10, 15, 25,
and 28 percent, but the top two brackets will increase – 33
percent will move to 36 percent, and 35 percent will move
to 39.6 percent. In addition, the preferential rates of 0-15
percent afforded certain capital gains and qualified dividends
are anticipated to be stretched upward, resulting in a top
rate of 20 percent.
While we don’t know where the final results will end up, most
everyone agrees that tax rates will not be lower in 2011.
This affects not only individual earnings but also those of
sole proprietorships and those passed through to individuals
by trusts, partnerships and S corporations.
The Current
Unknown
7. For 2010, the dreaded phaseout rule that previously reduced
write-offs for the most popular itemized deductions (including
home mortgage interest, state and local taxes and charitable
donations) is gone. We’ll talk more about this opportunity later.
Current budget proposals include an inflation-adjusted phaseout
plan for 2011 and beyond.
By now we’ve all heard about the lack of federal estate tax in
2010 – and that a fix is needed to prevent the return of higher
tax rates and lower exemptions in 2011 and beyond. Most
experts expect that the 2009 rules will be reinstated, with an
exclusion of $3.5 million and a maximum tax rate of 45 percent.
There are other areas of uncertainty as well, some of which are
addressed as we talk about the following planning strategies in
greater detail.
8. Timing of salaries, bonuses, etc.
It’s possible that compensation you earn in 2010 can be paid
to you in early 2011. Your employer may even be entitled to
its tax deduction in 2010. If you are self-employed and your
business operates on the cash method, you can delay sending
out bills for 2010 work until late in the year, so payment
arrives in 2011, making it taxable in 2011. However, there
are constructive receipt rules to be mindful of.
Alternatively, if you are trying to increase 2010 income, you
might offer a discount to clients who prepay.
Capital gains and losses
Generally, gains and losses from securities
sales are recognized on the trade date, not
the settlement date. December trades will be
2010 transactions, even if the settlement date
is in January 2011. Sales at a loss can reduce
other capital gains, and a net loss of up to
$3,000 can be used to offset other income.
Before you pull the trigger on a sale and
recognize a gain, check your holding period.
Long-term capital gains (held for longer than
one year) are eligible for a significantly lower
tax rate – generally no more than 15 percent.
Individuals
9. It’s anticipated that the top capital gains tax rate could move up to 20 percent
beginning in 2011, so this might be a good time to accelerate a gain into 2010
and save 5 percent.
Also, capital gains can be as low as 0 percent – the same is true of qualified
dividends. For those whose marginal tax rate does not exceed 15 percent, the
tax rate on these special types of income is reduced to zero. If you are single
and your taxable income for 2010 is under $34,000, or you are married filing
jointly with taxable income under $68,000, the 0 percent rate applies to you.
Many people with taxable income below these thresholds do not receive
qualified dividends or recognize long-term capital gains that qualify for the
0 percent rate. While the kiddie tax rules prevent your children from qualifying,
gifts to others that are in lower tax brackets (e.g., retired parents) might be a
good technique. If you gift appreciated stock to someone in the
10 or 15 percent tax brackets, they could sell the investment
and qualify for the 0 percent tax rate on the gain. Be sure to
discuss such a plan with your CPA first so you do not trigger
gift taxes while trying to save on income tax.
When selling to recognize a capital loss, do not run afoul of
the wash sale rules. A wash sale occurs if you repurchase
substantially identical assets within the 61-day period beginning
30 days prior to your loss sale and ending 30 days after the
sale. A wash sale will wipe out any loss you thought you had.
When planning year-end stock sales, be sure to consider any
capital loss carry-forward that may be available to you in 2010
– losses incurred in prior years that were not fully utilized.
10. Installment sales
Selling an asset at a gain and collecting the
proceeds in future years may allow you to
defer part of the income until the years in
which you receive the payments. But be
careful – this may also be risky because you
would be financing the sale yourself and
could be faced with collection challenges.
While the installment sale option has been popular and effective over
the years, with capital gains rates at an all-time low in 2010, be sure to
consider electing to report the entire gain in 2010. So, while financing
a sale might make good financial sense (e.g., while you have someone
interested in buying), it may or may not make sense to stretch any
resulting gains out into future years that have higher tax rates.
Credit card payments
Paying tax-deductible expenditures, including charitable contributions,
with a credit card secures the deduction, even if you do not actually pay
the credit card company until the following year. A pledge – or promise
– to make the contribution is not good enough. You actually have to
make the payment or charge it to your credit card.
11. Suspended passive activity losses
The most common passive activity is rental real estate, but could also be a
trade or business that you do not actively participate in. Losses from passive
activities are limited and thus are often carried over (suspended) to future
years instead of being available to offset current income.
If you own a passive activity with a suspended loss, and you do not expect
sufficient passive income in 2010 to allow you to deduct the suspended loss,
consider disposing of the activity before Dec. 31. Disposal frees up the suspended
loss and allows it to be used in the current year.
Charitable contributions
Consider contributing appreciated securities instead of cash. You can deduct the
fair market value of long-term capital gain property contributed to charity,
even though your basis in that security might be significantly less. Not only do
you get a higher deduction, you also avoid taxes on the gain that would have
been recognized if you sold it and donated the proceeds. However, if you’re
determined to get rid of securities that have declined in value since you
bought them – sell them first to realize the loss, then gift the proceeds. And
remember the annual capital loss limitations.
As of now, contributions made directly from your IRA
do not get the preferred treatment they did in 2009
(for those age 70½ or older, allowing no income to be
triggered, but also not allowing the charitable deduction).
However, there is talk in Congress of retroactively
reinstating this provision to Jan. 1, 2010. So you might
want to hold off on some of your planned giving until
after the November elections, when Congress is
scheduled to consider this and other issues.
12. Tax credits for home improvements
A tax credit for 30 percent of the cost of qualifying home improvements,
up to a maximum aggregate credit of $1,500, is available for certain
improvements placed in service in 2010. The credit is limited to
$1,500 cumulatively – not annually – so if you have claimed the credit
previously, the full amount will not be available in 2010. The credit
applies to energy-efficient improvements such as insulation, exterior
windows and exterior doors, as well as heating and air conditioning
systems and water heaters. You will need to complete your purchase
before Dec. 31 to qualify for the credit in 2010. There is currently no
provision for this credit after 2010.
Tax credits for alternative vehicles
Several different tax credits are available to purchasers of various types
of motor vehicles that use fuel-saving or alternative-fuel technologies.
The credits vary in amount by the type of credit and type of vehicle.
Check with the manufacturer to see what tax credits may be available
if you are considering the purchase of a new vehicle. Some of these
credits expire after 2010, so this may be the year to make a purchase
if you’re considering one.
13. Alternative minimum tax (AMT)
Think of the AMT as a separate tax system that shadows
regular income tax – if you don’t pay “enough” regular
income tax, you might be subject to AMT to increase the
total that you pay. An increasing number of middle-income
earners, especially retirees, are falling victim to AMT. High
itemized deductions (other than charitable contributions),
high personal exemptions and large capital gains are common
triggers of AMT. Before implementing any year-end tax
strategy, be sure to consider the impact of AMT.
Funding your retirement plans
To qualify for a deduction in 2010, your retirement plan
generally must be in place before the end of the year
although some must be set up sooner. Exceptions are
IRAs and SEP (simplified employee pension) plans, which
can be created and funded by April 15, 2011, or by the
extended due date of your return in the case of a SEP.
Thus, should you discover next year that you need a few
more deductions for 2010, you may be able to get them
with an IRA or SEP. You also may qualify for a tax credit
for doing so.
14. Roth IRA conversion
There are several advantages that Roth IRAs have over
traditional IRAs, but a conversion from a traditional IRA
to a Roth IRA results in taxable income. Even so, there are
several reasons that you might want to consider converting
part or all of your traditional IRA accounts to Roth IRAs
in 2010.
First, there is no longer an income limitation restricting who
is eligible to convert. Second, for 2010 only, the resulting
taxable income can be split 50-50 between 2011 and 2012.
So there will be no impact on 2010 taxable income and you
get to spread the income over the two following years – an
ideal deferral opportunity. However, remember that tax
rates are anticipated to increase in 2011. You can opt out
of the deferral and pick up all of the income in 2010. This
might be advisable, depending on your specific situation.
For example, if you are expecting business or other losses
in 2010, income from a Roth conversion could be partially or
fully sheltered by these losses, resulting in little or no tax.
15. Other individual considerations
Following are a few additional items to consider:
➤ Consider paying anticipated state income taxes before year-end. Just remember
that accelerating taxes won’t do any good if you’re subject to the AMT.
➤ Ensure that you have basis to claim losses from pass-through entities. Don’t
just assume that you do, especially if you have claimed losses in previous years.
➤ Maximize the benefit of the standard deduction – it might make sense to
accelerate or defer deductions into one year or the other, allowing you to
benefit from the “free” standard deduction one year and itemized deductions
the next. This approach is also helpful for deductions subject to an income
limitation.
➤ Consider buying over-the-counter drugs this year. The new healthcare law
provides that for purchases after 2010, flex plans and health reimbursement
arrangements (HRAs) can no longer reimburse the cost of these items.
➤ If you have self-employment income and are considering purchasing health
insurance, it might make sense to do this before year-end. As long as there is
earned income from self-employed sources, self-employed health insurance is an
“above-the-line” deduction (deductible even if you don’t itemize). Also, thanks
to the Small Business Jobs Act of 2010, it not only reduces income tax, but also
self-employment tax. Alternatively, if you already have health insurance but are
considering long-term care insurance, this also qualifies for the deduction.
➤ If you qualify for making a health savings account (HSA) contribution, consider
maximizing your contribution before year-end. The beauty of an HSA is that you
do not have to use the funds for medical expenses this year, but the contributions
are currently deductible.
16. Estate and Gift
Taxes Other than the significant fact that there is currently no estate tax for 2010,
there is nothing particularly unique when it comes to general estate and gift
tax planning for 2010. We’ve all seen the jokes – the best estate tax planning
advice for 2010 is to make sure you die this year.
Estate planning
Joking aside, the key is keeping your estate plan flexible until we know what
rules will be in effect. Make sure your will distributes your assets in the
appropriate manner. If you have younger children, your will should appoint
a guardian in the event of the death of both parents. You certainly do not
want the probate court making decisions on your behalf.
With states looking for additional revenue to balance their budgets, state
inheritance taxes are receiving increased attention. Be sure your estate plan
minimizes inheritance taxes in your state of residence and in any states in
which you own property. It is also important to note that there may still be
federal information filing requirements related to a death in 2010.
Gift tax
The annual gift tax exclusion for 2010 remained at the 2009 level of $13,000.
If you are married, you can gift up to $26,000 per donee by using the gift-splitting
rules while avoiding any federal gift tax ramifications. Gifting is a good way
to reduce your taxable estate and may be important in a good estate plan.
For example, if you and your spouse have two children, with gift-splitting
you can give each child $26,000 in late December and another $26,000 in
early January. If your children are married and/or you have grandchildren,
the opportunity increases exponentially.
17. Businesses
The Small Business Jobs Act of 2010 was passed last month and provides some
significant tax benefits for businesses. It extended the life of expiring provisions
we’re familiar with and added some new deductions that we’ve not seen before.
These and other year-end business tax planning ideas are detailed below.
Section 179 deduction
Instead of depreciating an asset over several years, Internal Revenue Code
Section 179 allows the expensing of all or a portion of certain qualifying assets
in the year placed in service. There are limitations, the most significant of which
is the nature of the asset – it must be used in an active trade or business and
generally must be personal property (not real property).
For 2010, we now have the highest amount available to expense under Section 179
that we’ve ever had – $500,000. This amount applies to assets placed in service
for years beginning in 2010 and 2011. For total investments of qualifying property
exceeding $2 million, there is a dollar-for-dollar reduction of the $500,000
expense available.
A brand new provision is to allow Section 179
expensing of up to $250,000 of qualified real
property, which includes qualified leasehold
improvements, qualified restaurant property
and qualified retail improvements. To qualify,
the building must be occupied exclusively by
the lessee, it must have been in service for
more than three years and the improvements
can only be to the interior.
18. Bonus depreciation
Property that does not qualify for an immediate tax write-off
under Section 179 may qualify for an increased first-year
depreciation deduction under bonus depreciation rules,
which were also just recently extended for one year. This
deduction is equal to 50 percent of the cost of qualifying
property purchased and placed in service by Dec. 31, 2010.
To qualify for bonus depreciation, the property must be new.
Used property does not qualify. In addition, the property
must:
➤ Have an applicable modified accelerated cost recovery
system (MACRS) recovery period of 20 years or less
➤ Be water utility property or certain computer software
➤ Be qualified leasehold improvement property
Losses from pass-through entities
Economic pressures are causing many historically profitable
businesses to experience operating losses. If you are an owner
of a pass-through business entity operating as a partnership,
LLC, S corporation or trust, and the business incurs a loss
in 2010, you need to plan ahead to be sure you can take
advantage of that loss on your personal tax return.
19. If your business activity is “passive” – generally a rental real estate
activity or a business in which you do not materially participate –
you may not be able to deduct the loss unless you also experience
passive income. Even if you are actively involved in the business, your
loss may not be deductible if you do not have “basis.” These rules
are complicated, and you should consult with your tax professional.
You may be able to take steps before the end of the tax year to
invest more in the business or otherwise increase your basis, thus
allowing you to deduct the loss this year.
Employee-related benefits
Many of the same tax savings opportunities related to employees
continue as in prior years, such as establishing and contributing to a
retirement plan. However, a few new ones are now available that
we should be mindful of. Be sure you are benefiting from any of the
following that you may qualify for:
➤ Health insurance tax credit – Under the 2010 health care
act, a tax credit is provided for an eligible small employer (ESE)
to purchase health insurance for its employees. An ESE is one that
pays for at least 50 percent of the premium cost for employees
and generally has no more than 25 full-time equivalent employees
employed during the year, and whose employees have annual
full-time equivalent wages that average no
more than $50,000.
20. ➤ Payroll tax holiday for new hires – The Hiring
Incentives to Restore Employment (HIRE) Act introduced
a payroll tax holiday for wages paid to new hires. It
exempts employers from paying the employer share of
Social Security taxes on wages paid in 2010 to qualified
newly hired workers. These are workers who: (1) begin
employment with the employer after Feb. 3, 2010, and
before Jan. 1, 2011, (2) were previously unemployed and
(3) do not replace other employees of the employer.
So, while this provision was available for most of 2010,
you might want to make sure you benefited from this
provision if you were eligible.
Pay corporate dividends
Traditional C corporations (ones that have not elected
S corporation status) face the dreaded “double tax” –
profits are taxed at the corporate level and dividends
paid out to shareholders are again subject to tax.
However, given the maximum 15 percent tax rate for
qualified dividends, many have seen this as an opportunity
to pay out accumulated earnings at relatively low rates
(compared to the 39.6 percent rates that applied previously).
With the likelihood that the tax rate on dividends will
increase (to 20 percent or higher), it may be worth
accelerating any planned dividends into 2010 to benefit
from the lower rate.