31May
2018
Are Women and Retirement Strategies a Mismatch?

Forty-four percent of American women are the primary breadwinner in their house.1 Yet only 10% of women feel very confident in their ability to fully retire with a comfortable lifestyle.2  Although more women are providing for their families, when it comes to preparing for retirement, they may be leaving their future to chance.  Women and College The reason behind this disparity isn’t a lack of education or independence. Today women are more likely to go to college and graduate than men.3 So what keeps them from taking charge of their long-term financial picture? One reason may be a lack of…

31May
2018
Sell (or Buy) a Corporate Business With a Tax-Free Reorganization

There are two basic ways to sell an incorporated business — sell the assets or sell the stock. For two good tax reasons, sellers usually prefer stock sales: 1. Assuming you’ve owned the shares for more than a year, your profits will generally be taxed at a maximum federal rate of only 15%. This applies equally to C and S corporations. 2. Double taxation is avoided when you sell C corporation stock, because the sale won’t trigger any taxable gain at the corporate level. However, there may be an even better alternative. If you can find another corporation to acquire…

31May
2018
The Basics of Estate Planning

With the many changes in the estate tax in recent years, you could be confused about the need for estate planning. But estate planning was never just about reducing estate taxes. It is also about ensuring that your estate is distributed according to your wishes and that your heirs are properly provided for. At a minimum, you probably need to take care of the following: Select a guardian for your minor children. This is probably the most important reason for parents with minor children to plan their estate. You need to select an individual who has a genuine concern for…

17May
2018
Ten Steps to Help Thwart Employee Theft

There are many types of fraud committed against businesses — from workers’ compensation scams to complex corporate swindles — but one of the most common types is simply employee theft. This can occur when employees take money from a cash register, forge names or change amounts on company checks, engage in creative bookkeeping a number of other schemes. The Fraud Triangle Certain situations drive some people to steal. It’s sometimes called the “fraud triangle” and it generally contains three elements: Pressure. This is often financial stress with the individual unable to share the problem and seeing no effective, legal way…

17May
2018
Plan Around the Medicare Tax on Investment Income

The 3.8% Medicare tax on net investment income took effect a few years ago. It only affects higher-income individuals, but that can include anyone who happens to have big one-time taxable income or gains in one year. This article covers some planning strategies that individuals can implement to avoid or minimize the tax. Net Investment Income Tax Basics The following types of income and gain (net of related deductions) are generally included in the definition of net investment income and thus potentially exposed to the 3.8% tax. Gains from selling assets held for investment including gains from selling investment real…

17May
2018
Understanding the Need for Key Employee Insurance

Let’s say your family company includes a great group of employees and business couldn’t be better. You know that much of your success is due to one or two people with skills and personalities that are hard to match. Suppose they were injured and out of work for a while? Or worse, suppose they died unexpectedly? Would your company survive? When an owner or a key employee of a closely held business dies or becomes disabled, there are five separate groups that are concerned about the immediate financial health and future of the operation: Employees who are anxious about the…

03May
2018
Exploring Six Common Myths about Trusts

Most of us know that a trust is a useful way to safeguard financial assets for your benefit or for someone else. But the common misconceptions about trusts could cause you to bypass them entirely, or plan to use them improperly.             Myth #1: Now that Federal Law Allows a $10-Million-Plus Exemption and Includes “Portability,” Estate Taxes Are No Longer a Problem  A properly written irrevocable trust can be an excellent vehicle to protect your financial assets against heavy federal and state estate taxes. Another type of trust is a revocable living trust, which is one of the…

03May
2018
Deducting Pass-Through Business Losses

Many business ventures generate tax losses, especially in the first few years of operation or under adverse conditions. When can losses be deducted — and how much can you deduct in any given year? This article explains new limitations on the ability of individual taxpayers to deduct losses from pass-through business entities, including sole proprietorships, limited liability companies (LLCs) treated as sole proprietorships for tax purposes, partnerships, LLCs treated as partnerships for tax purposes and S corporations. Old Rules Before the Tax Cuts and Jobs Act (TCJA), an individual taxpayer’s business losses could usually be fully deducted in the tax…

03May
2018
Dealing With an Inheritance

After receiving an inheritance, you need to determine how to incorporate those assets, whether stocks, bonds, real estate, or some other asset, into your finances. Consider these points during that process: Determine what you will receive and when. Inheritances don’t typically come in the form of one check. You are likely to receive pieces of different assets over a period of time. Work with the estate’s executor to determine what assets you are likely to receive and when you can expect them. Resist the urge to spend the inheritance. You may be tempted to spend your inheritance on things like…

10April
2018
Go Green, Save Green: Tax Breaks for Saving Energy

Earth Day is April 22. This occasion reminds us to consider implementing changes to help reduce the amount of energy we consume. But “going green” isn’t just good for the Earth — certain energy-saving expenditures also may qualify for generous tax breaks that are good for your pocketbook, too. Here are some tax credits for buying and installing certain types of energy-efficient residential equipment. Current Tax Breaks for Green Equipment On your 2017 through 2019 returns, you may be eligible for a tax credit of 30% of expenditures (including costs for site preparation, assembly, installation, piping, and wiring) for installing the…

05April
2018
Understanding the Business Cycle

What has upswings and downturns, troughs, peaks, and plateaus? Though such terms could easily describe a roller coaster ride, in fact they are commonly used to refer to something known as the business cycle. The business cycle — also known as the economic cycle — refers to fluctuations in economic activity over several months or years. Tracking the cycle helps professionals make forecasts about the direction of the economy. The National Bureau of Economic Research makes official declarations about the economic cycle, based on factors such as the growth of the gross domestic product, household income, and employment rates. Not…

05April
2018
Sell Corporate Stock Tax-Free to an ESOP

When business owners sell C corporation stock for a big profit, they usually qualify for the current maximum 20% maximum federal rate on long-term capital gains, assuming they’ve owned the shares for over a year. While a 20% capital gains rate is good, a tax-free sale to an ESOP could be even better. Current rules: The maximum federal income tax rate on C corporation dividends is now 20% for single people with taxable income above $425,800 ($479,000 for married joint-filing couples). Upper-income individuals may also owe the 3.8% Medicare surtax on dividend income. For other taxpayers with lower incomes, the…

05April
2018
Discussing Inheritances with Heirs

Many people are uncomfortable discussing with heirs how they will distribute their estate. Perhaps you don’t want your children to realize how much they may receive after your death. Or you may think your choice of heirs could change in the future. However, if you don’t discuss your estate plan, disagreements and conflicts could erupt once the details of inheritances are revealed. For instance, siblings may resent each other if distributions are not equal. Children may resent a spouse from a second marriage if they feel that spouse is using up their inheritance. At that time, you won’t be able…

28March
2018
Last-Minute Tax Planning Tips for 2017

This year, Tax Day for individuals, sole proprietors and C corporations is Tuesday, April 17. You still have time to consider some moves in 2018 to potentially save federal (and possibly state) income taxes for 2017. Here are three last-minute planning ideas. Last-Minute Section 179 Option for Businesses Did your business make improvements to real property in 2017? If so, you might qualify for a special Section 179 deduction. The Sec. 179 deduction privilege often allows eligible businesses to deduct the entire cost of depreciable asset additions in the year they’re placed in service. For 2017, the limit is $510,000. However,…

22March
2018
A Guide to Identifying White Collar Employee Fraud Risks

You can call it psychology or human nature. When some managers or employees are exposed to certain conditions, the odds go up that these individuals will commit fraud against your business. The situation is worse if your company doesn’t have a full range of internal controls designed to stop fraud before it happens. In other words, when the motive for fraud meets the opportunity for fraud, watch out!  Specifically, beware of these red flags: Personal financial stress. Sometimes, managers or employees with access to company assets are under serious personal financial stress (due to bad investments, divorce, family illness, drug…

22March
2018
Will You Have to Pay Tax on Social Security Benefits?

Some people are under the misconception that Social Security benefits are always free from federal income tax. However, depending on how much income you have from other sources, you may have to report up to 85% of your benefits as income on Form 1040 and pay the resulting federal income tax. If this happens, you’re effectively getting taxed twice on the same dollars: First, you’re taxed during your working years when you have to pay federal income taxes on Social Security tax amounts that are taken out of your salary or self-employment earnings. Then, you’re taxed again if you have…

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