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The Section 199 deduction is intended to encourage domestic manufacturing. In fact, it’s often referred to as the “manufacturers’ deduction.” But this potentially valuable tax break can be used by many other types of businesses besides manufacturing companies. Sec. 199 deduction 101 The Sec. 199 deduction, also called the “domestic production activities deduction,” is 9% of the lesser of qualified production activities income or taxable income. The deduction is also...
Read moreWas a college student in your family last year? Or were you a student yourself? You may be eligible for some valuable tax breaks on your 2016 return. To max out your higher education breaks, you need to see which ones you’re eligible for and then claim the one(s) that will provide the greatest benefit. In most cases you can take only one break per student, and, for some breaks,...
Read more“I’m taking a sick day!” This familiar refrain usually is uttered with just cause, but not always. What if there were no sick days? No, we’re not suggesting employees be forced to work when they’re under the weather. Rather, many businesses are adopting a different paradigm when it comes to paid time off (PTO). Under the “PTO bank” concept, employers merge most (or all) of the traditional components of excused...
Read moreIt’s crucial to review and update your estate plan in light of significant life changes or new tax laws. It’s equally important to be aware of strategies that can be implemented after your death to achieve your estate planning goals. The flexibility postmortem strategies provide is especially important during times of estate tax law uncertainty, like now. If you’re married, here are two postmortem estate planning strategies you should know...
Read moreInvestment interest — interest on debt used to buy assets held for investment, such as margin debt used to buy securities — generally is deductible for both regular tax and alternative minimum tax purposes. But special rules apply that can make this itemized deduction less beneficial than you might think. Limits on the deduction First, you can’t deduct interest you incurred to produce tax-exempt income. For example, if you borrow...
Read moreAt the beginning of the year, many people decide they’re going to get in the best shape of their lives. Similarly, many business owners declare that they intend to cut costs and operate at peak efficiency going forward. But, like keeping up an exercise routine, controlling costs takes an ongoing effort. You need to not only review expenses now, but also commit yourself to doing so regularly. Here are some...
Read moreBonus depreciation allows businesses to recover the costs of depreciable property more quickly by claiming additional first-year depreciation for qualified assets. The PATH Act, signed into law a little over a year ago, extended 50% bonus depreciation through 2017. Claiming this break is generally beneficial, though in some cases a business might save more tax in the long run if they forgo it. However, 2016 may be an especially good...
Read moreWhile it’s natural to set up trusts in the state where you live, you may be losing out on significant benefits available in more “trust-friendly” states. For example, some states: • Don’t tax trust income,• Authorize domestic asset protection trusts, which provide added protection against creditors’ claims,• Permit silent trusts, under which beneficiaries need not be notified of their interests,• Allow perpetual trusts, enabling grantors to establish “dynasty” trusts that...
Read moreIRS permits same-sex couples to recalculate marital exclusion amounts http://bit.ly/2jsmUPY
Read moreMany businesses receive payment in advance for goods and services. Examples include magazine subscriptions, long-term supply contracts, organization memberships, computer software licenses and gift cards. Generally, advance payments are included in taxable income in the year they’re received, even if you defer a portion of the income for financial reporting purposes. But there are exceptions that might provide you some savings when you file your 2016 income tax return. Deferral...
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