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Educational institutions get extended penalty relief for tuition reporting change. The IRS has announced that it is extending previously granted relief from penalties under the tax code for eligible educational institutions required to file Forms 1098-T, “Tuition Statement,” for the 2017 calendar year. No penalties will be imposed if the institution reports the aggregate amount billed for qualified tuition and related expenses on Form 1098-T instead of the aggregate amount...
Read moreBipartisan bill introduced in Senate to strengthen retirement savings. On Nov. 17, Senate Finance Committee Chair Orrin Hatch (R-UT) and Ranking Member Ron Wyden (D-OR) introduced the “Retirement Enhancement and Savings Act of 2016.” It would repeal the maximum age for traditional IRA contributions, authorize multiple employer-defined contribution plans and remove the 10% automatic enrollment safe harbor cap. It also would increase the credit limitation for small employer pension plan...
Read more“Mailbox rule” reigns supreme. A federal district court dismissed a suit by married taxpayers who claimed they’d filed a timely, amended income tax return entitling them to a refund. The IRS said it didn’t receive it. The couple produced copies of Form 843, “Claim for Refund and Request for Abatement,” and their lawyer’s cover letter. But the court held that, because the taxpayers didn’t send the return via registered or...
Read moreTypically, much of the estate planning process focuses on money. But the most successful estate plans are founded on relationships. Building and preserving family wealth isn’t an end in itself. Rather, it’s a tool for promoting shared family values or encouraging family members to lead responsible, productive, healthy lives. Drafting a family mission statement can be an effective way to define and communicate these values. Communicate clearly Because each family...
Read moreLife insurance can be a powerful financial and estate planning tool, but its benefits may be reduced or even eliminated if you designate the wrong beneficiary or fail to change beneficiaries when your circumstances change. Here are common pitfalls to avoid: Naming your estate as beneficiary. Doing so subjects life insurance proceeds to unnecessary state inheritance taxes (in many states), exposes the proceeds to your estate’s creditors and ensures that...
Read moreThe election of Donald Trump as President of the United States could result in major tax law changes in 2017. Proposed changes spelled out in Trump’s tax reform plan released earlier this year that would affect businesses include: • Reducing the top corporate income tax rate from 35% to 15%, • Abolishing the corporate alternative minimum tax, • Allowing owners of flow-through entities to pay tax on business income at...
Read moreSpecial tax benefits for military members. The IRS reminds service members that they may qualify for special tax benefits. These include: partially or fully tax-free combat pay; deductions for reservists for unreimbursed travel expenses, under certain conditions; and the earned income tax credit for low- and moderate-income service members. If stationed abroad, military members get an automatic extension to file an income tax return. Plus, most bases offer free tax...
Read moreWhat’s your status? An accurate tax return depends partly on using the right filing status. When one taxpayer’s living situation changed during the year, the IRS said he used the wrong filing status, and rejected his tax return. During that year, the taxpayer, his wife and minor children all lived together, but then separated. His return was prepared using the head of household status, which generally results in lower tax....
Read moreSaving for retirement can be tough if you’re putting most of your money and time into operating a small business. However, many retirement plans aren’t difficult to set up and it’s important to start saving so you can enjoy a comfortable future. So if you haven’t already set up a tax-advantaged plan, consider doing so this year. Note: If you have employees, they generally must be allowed to participate...
Read moreU.S. multinationals optimistic for another repatriation holiday. President-elect Trump’s election win moves large U.S. corporations closer than they’ve been in years to a big tax break on approximately $2.6 trillion in foreign profits. A “repatriation holiday” happened in 2004 as an economic stimulus measure and similar plans have been proposed by Trump and other Republicans. The 2004 holiday allowed U.S. companies to bring back or repatriate earnings from their foreign...
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