Know the ins and outs of ‘reasonable compensation’
Owners of incorporated businesses know that there’s a tax advantage to taking money out of a C corporation as compensation rather than as dividends. The reason: A corporation can deduct the salaries and bonuses that it pays executives, but not dividend payments. Thus, if funds are paid as dividends, they’re taxed twice, once to the […]
IRS Tax Tip: Gather records early for a smoother tax season
As taxpayers are getting ready to file their taxes, one of the first things they’ll do is gather their records. To avoid refund delays, taxpayers should gather all year-end income documents before filing a 2019 tax return. It’s important for folks to have all the needed documents on hand before starting to prepare their return. […]
IRS Tax Tip: Know the difference between standardized and itemized deductions
It’s a good idea for people to find out if they should file using the standard deduction or itemize their deductions. Deductions reduce the amount of taxable income when filing a federal income tax return. In other words, they can reduce the amount of tax someone owes. Individuals should understand they have a choice of […]
Note changes to ACA thresholds and signs of more audits
It’s almost time for the annual open enrollment period, so it’s important to note that the IRS recently announced the affordability percentage for 2020 under the Affordable Care Act will decrease to 9.78 percent. This is a slight decrease from the 2019 threshold of 9.86 percent. Employers should make sure that your insurance broker is […]
Year-end planning tips to help lower your tax bill
As the end of the year approaches, it is a good time to think of planning moves that will help lower your tax bill for this year and possibly the next. We have compiled a checklist of actions based on current tax rules that may help you save tax dollars if you act before year-end. […]
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% […]