Building a Strong Relationship and a Strong Business
Challenge: Chris Giarla and his wife owned several McDonald’s restaurants, but they felt they weren’t getting the help they needed from their accounting firm to address their business needs and to help guide them through some complex issues they were facing at the time. “We weren’t happy,” says Chris. “We had five restaurants at the […]
Retirement planning: Name those contingents
Making a contingency plan in the event of unforeseen circumstances is a good business practice. The same is true when planning for retirement. All retirement accounts require the owner to name a beneficiary – the person who will assume the assets of the account upon the death of the owner. But what happens if the […]
A healthy consideration
A popular incentive for business owners is to provide their employees health club or gym memberships. It is important to note, however, that employers who pay for a fitness program offsite for employees must include that cost as a fringe benefit in the employees’ compensation and report it on their W-2s. Once the membership fees […]
Tax planning tips for 2016 investment income
The 3.8% Net Investment Income Tax (3.8% NIIT) is imposed on net investment income of higher-income individuals. This tax applies to individuals with modified adjusted gross income (MAGI) exceeding the following “thresholds,” which are not indexed for inflation: $250,000 for married individuals filing jointly; $200,000 if single; and $125,000 if married filing separately. The 3.8% […]
Defer your income by delaying distributions from IRAs
Sometimes it’s OK to delay the inevitable. Generally, once you reach age 70½ or if you inherit someone else’s IRA or qualified retirement plan account, there are strict rules that require you to begin taking Required Minimum Distributions (RMDs) from the account. However, there are various ways to delay or defer the RMDs, thereby allowing […]
Some tax breaks are set to expire after 2016
For over a decade, we have been faced with a long list of popular tax breaks with set expiration dates. In the past, Congress temporarily extended the majority of these tax breaks every few years. In December 2015, President Barack Obama signed the Protecting Americans From Tax Hikes Act Of 2015 (PATH Act), which removed […]
New education tax provisions are available this year
Over the past 15 months, Congress passed several pieces of legislation containing a variety of new tax provisions, including some tax breaks for education expenses. Taxpayers must have Form 1098-T in order to claim education credits or tuition deductions. Generally, educational institutions are required to provide Form 1098-T to students and file a copy of Form […]
Teachers get a (tax) break
Historically, teachers have been allowed an “above the line” deduction (with an annual cap of $250) for various school supplies. However, starting in 2016, in addition to allowing teachers a deduction for school supplies, the PATH Act allows teachers to also deduct (subject to the overall annual cap of $250) amounts paid for certain professional […]
Deferring income could help you stay in a lower tax bracket
Deferring income into 2017 is a good idea if you believe that your marginal tax rate for 2017 will be equal to or less than your 2016 marginal tax rate. In addition, deferring income into 2017 could increase various credits and deductions for 2016 that would otherwise be phased out as your adjusted gross income […]
Take advantage of deductions to reduce tax liability
Taxpayers can take advantage of two types of deductions. So-called “above-the-line” deductions reduce both your adjusted gross income (AGI) and your modified adjusted gross income (MAGI), while “itemized” deductions (i.e., below-the-line deductions) do not reduce either AGI or MAGI. Deductions that reduce your AGI (or MAGI) are particularly favorable because they not only reduce your […]