30November
2017
IRS Increases Annual Gift Tax Exclusion for 2018

The IRS has announced that the annual gift tax exclusion is increasing next year due to inflation. After five years of being stuck at $14,000, the exclusion will be $15,000 per recipient for 2018 — its highest point ever. Section 529 Plans: Make Five Years of Gifts in a Year Normally, a gift made directly to a family member to pay for college education costs would be covered by the annual gift tax exclusion, up to the limit of $14,000 in 2017 ($15,000 in 2018). But there’s a special tax break available for transfers to a Section 529 plan, a type…

30November
2017
Let a Contingency Plan Steer You Through a Fraud Disaster

The first thing every Boy Scout or Girl Scout learns is to “be prepared.” Business owners would do well to remember this motto when they’re developing fraud control procedures. Even if you don’t believe your employees are capable of defrauding the company, it could happen. And if you have a fraud contingency plan in place, you’ll be prepared to handle it. Keep a Clear Head A fraud contingency plan is your disaster road map. When you learn that a trusted employee has been stealing from you, you’ll likely be distressed — which is no time to trust your instincts for…

30November
2017
How Roth IRA Withdrawals Are Taxed

You may think that all withdrawals from Roth IRAs are federal-income-tax-free. Unfortunately, that’s not true. Some withdrawals are taxable. On top of that, withdrawals before age 59 1/2 can potentially get hit with a 10% premature withdrawal penalty tax. Here’s what you need to know about Roth withdrawals and taxes. Only Qualified Withdrawals Are Tax-Free Roth withdrawals are tax-free if you: Are at least age 59 1/2 (or disabled or dead) and Have had at least one Roth IRA open for over five years. Then, all withdrawals from any of your Roth accounts are qualified withdrawals. As such, they are…

30November
2017
Hire Your Kids and Save Taxes

Here’s a great tax-saving idea for those who have teenagers who can work part-time in the family business. Hire the kids as legitimate employees. This strategy works best if your business operates as: A husband-wife partnership (owned only by you and your spouse). A husband-wife Limited Liability Company (LLC), which is treated as a husband-wife partnership for federal tax purposes. A sole proprietorship. A single-member LLC, which is treated as a sole proprietorship for federal tax purposes. This same strategy also works well (though not quite as favorably) for other types of family business entities, such as a C or…

16November
2017
Consider a GRAT to Transfer a Business

Succession planning for your business can be daunting. Along with selecting the right family member or other individual to carry on the business, you must weigh a variety of tax and financial planning issues. Some closely held business owners have found it pays to use a grantor retained annuity trust (GRAT). An Alphabet Soup of Trusts GRATs aren’t the only type of grantor trusts available for estate planning. You might also want to consider a grantor retained unitrust (GRUT) or grantor retained income trust (GRIT). Like a GRAT, both are irrevocable trusts created by the transfer of assets and followed…

16November
2017
Claiming Business Deductions for Work-Related Education Costs

If you’re headed back in the classroom, or thinking about it, you might be wondering if the tuition expenses are tax deductible. To be considered work-related education for business deduction purposes, the training must meet one or both of the following standards: Standard No. 1: The education is expressly required by applicable law or regulations in order for you to retain your current professional status.Standard No. 2: The education maintains or improves skills required in your current profession or business. Example 1: A self-employed radiologist runs his business as a single-member LLC. He is treated as a sole proprietor for tax…

16November
2017
Sharing an Inheritance

Married individuals who receive a large inheritance face a tough decision — should you share the inheritance with your spouse or hold the assets separately? Legally, you aren’t required to share the inheritance, even in community property states where almost all other income must be split equally. Even if all other marital assets are owned jointly, you might want to consider keeping an inheritance separate for a couple of reasons: Should you get divorced, you probably wouldn’t have to split a separately-held inheritance with your spouse. When you die, you control who receives the inheritance. If the inheritance is owned…

02November
2017
The Importance of an E-Mail Disclaimer

E-mail is ubiquitous in the American workplace and along with its growth comes the risk of lawsuits that can cost your company a bundle. In most cases an employer is held responsible for information contained in corporate e-mail messages. That means a company must take steps to ensure that e-mail communications don’t pose a legal risk. To help insulate yourself, add legal disclaimers to either the beginning or end of your e-mails.             A disclaimer can help protect you in these areas: Confidentiality. A disclaimer at the end of e-mail messages that the material is…

02November
2017
Uncle Sam Wants to WARN Employers About a Layoff Law

If your business finds that it must lay off a large number of employees, make sure you are in compliance with a federal law that requires some employers to provide advance notification. This little-known law is called the Federal Worker Adjustment Retraining and Notification Act (WARN). Under the law, employers who are covered must give 60 days notice of a plant closing or mass layoff. This notice must be given both to employees and to state and local governments. Failing to do so can result in civil penalties and employees can sue for as much as 60 days’ pay and…

02November
2017
Keeping the Business in the Family

Many successful small companies are family owned and run. And, there’s a good reason for it. It takes passion to make a go of it in business, and especially for a smaller one. A family owned business can benefit from the special dedication of a founder at the helm and possibly a spouse, siblings and children working alongside. But the devotion and dedication to the business also needs to apply to the succession plan for the company. Outside Resources for Family-Owned Businesses For smaller family-owned companies, it’s sometimes difficult to get perspective on challenging business problems. Family members may find…