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…

22March
2018
Succession Planning Requires Smart Strategies

Succession planning is important in any business, but it’s sometimes overlooked in family-owned operations. This is a big mistake. There are numerous former family-run companies that no longer exist due to poor or no succession plan. The plan needs to be well thought out and discussed with everyone affected. Don’t just assume that a son or daughter will want to carry on the family business. Even if your children say they will take over, they may not have the true desire required to continue a successful operation. The “heir to the throne” also may not have the business skills to…

08March
2018
Dynasty Trust Provides a Bridge to Keep on Giving

With a properly executed estate plan, your wealth can be enjoyed by your children and even their children. But did you know that by using a dynasty trust, you can extend the estate tax saving benefits for several generations, and perhaps indefinitely? A dynasty trust can build a bridge that protects your wealth from gift, estate and generation-skipping transfer (GST) taxes and helps you leave a lasting legacy. And, with today’s higher lifetime gift and GST tax exemptions, a dynasty trust is all the more powerful. Dynasty Trust in Action Transfers that skip a generation — such as gifts or…

08March
2018
Protect Your Company Retirement Plan from an IRS Attack

When your company sponsors a qualified retirement plan, you must comply with complex rules established by the IRS and the Department of Labor. Ignore the rules and your firm could face costly penalties from federal regulators — and plan participants might sue you for mishandling trust assets. In the worst-case scenario, the IRS could disqualify your company’s plan if you engage in prohibited transactions.   This is no time to be a do-it-yourselfer. You need the help of a skilled professional who knows the requirements and can help you stay in compliance. Here’s why. Under the so-called “prudent investor” guidelines,…

08March
2018
Getting Your Estate in Order

Don’t let the changing estate tax environment prevent you from getting your estate in order. Whatever happens with the future of estate tax, you’ll still want to ensure your assets are distributed according to your wishes. While most people will need the help of professionals to develop a formal estate plan, you can aid the process by organizing information and making basic decisions. Consider these steps: Calculate your estate’s value. In addition to assets you currently own, include assets your estate will acquire after your death, such as life insurance proceeds and pension benefits. For each asset, list the estimated…

08March
2018
Good News! More Families May Be Eligible for the Child Credit in 2018

The Tax Cuts and Jobs Act (TCJA), which was signed into law on December 22, 2017, made significant changes to the child credit. This credit is generally available to taxpayers with children under the age of 17, but the new law adds a new (smaller) credit for other dependents. Here are the details. Old Rules Under prior tax law, the child credit was $1,000 per “qualifying child.” But the credit was reduced for married couples filing jointly by $50 for every $1,000 (or part of $1,000) by which their adjusted gross income (AGI) exceeded $110,000. The phaseout thresholds were $75,000…

28February
2018
IRS Clarification: Home Equity Loan Interest May Still Be Deductible

The IRS recently announced that in many cases, taxpayers can continue to deduct interest paid on home equity loans. The tax agency issued the clarification because there were questions and concerns that such expenses were no longer deductible under the Tax Cuts and Jobs Act (TCJA), which was signed into law on December 22, 2017. Background Basics Taxpayers can deduct interest on mortgage debt that’s “acquisition debt” under the tax law. Acquisition debt means debt that is: 1. Secured by the taxpayer’s principal home and/or a second home, and 2. Incurred in acquiring, constructing, or substantially improving the home. This rule hasn’t been…

22February
2018
Videoconferencing: Sharpen Your Company’s Focus

Travel costs can quickly mount for many companies, so you may want to look into videoconferencing as a way to keep the spending down and the bottom line solid. Surveys put the cost of the average domestic business trip at around $1,000, Drawbacks of the Future    Psychological. You may need to train people to change the way they think about meetings and make them aware that this new technology provides the same benefits as most face-to-face gatherings. For some top-level discussions and sensitive negotiations, live interaction remains critical. And, of course, some customers will insist on being able to look you…

22February
2018
Coping With a Nightmare: Firing a Relative in a Family Business

Of course, you love your family members. But let’s say you hired them — and their spouses and children — to work in the family business and one of them is not working out. In fact, an outside consultant has told you that the person is incompetent, destructive to the business morale and should be let go. This is a nightmare for a family business owner: How do you fire a relative who just isn’t up to par?               The chances are good you will have to face this challenge at some point in…

22February
2018
Take a Last Resort Stand on Layoffs

At the first sign of a southbound economy some companies rush into panic mode. They slash the staff and hope for the best. Certainly, labor is the biggest expense for most businesses, which is why many managers believe there is no faster, more efficient way to improve the bottom line than by cutting staff. But when you add up some of the costs of layoffs, such as severance payments, continued healthcare costs for some and higher unemployment charges, you may realize you are defeating your purpose. And that’s only part of the picture. Since layoffs create uncertainty, they often prompt:…

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