Expense Future Payments As Cash

Credit Card Charges   All charges made to your credit cards before year end to pay business expenses may be deducted as current year expenses, although the payments may be made in the following year. In addition, all checks written and dated in current year, but cashed in the future regarding current year tax related […]

Tax Form 8971 – If Missed Could Cost You BIG!

Beneficiaries Acquiring Property From Descendants   As our society continues to age we are new seeing estates beginning to distribute their assets. On Tax Form 8971, you will find the list of these distributions and this form could be delivered at any point during the year. Please don’t forget to forward this to your Tax Preparer!!! […]

Not All Losses Are Deductible Right Away

S Corporation or Limited Liability Company (LLC) losses The amount of losses from an S corporation or an LLC you can deduct is limited to your basis (your capital adjusted for earnings, drawls, etc.) in each entity.   Tax Tip: The above ­mentioned losses are temporarily suspended and not deductible.

What Really Is Reasonable Compensation?

Reasonable Compensation for Shareholders who work for the Corporation When a stockholder works for her/his own corporation, she or must be on the company payroll and paid a reasonable amount of salary for the services performed. The Government Accountability Office has reported many employment tax abuses with respect to S corporation shareholders who worked for the […]

Pay Attention Foreigners Buying US Property

Foreign Investment in Real Property Tax Act (FIRPTA) The Foreign Investment in Real Property Tax Act (FIRPTA) requires a tax of 15% of the amount realized on the disposition of all US real property. A buyer of U.S. real property interest from a foreign investor is considered the withholding agent of the IRS and is obligated to […]

Foreign Gift and Inheritance Also Count In The US

Foreign Gifts and Inheritances, IRS Form 3520 If you received gifts or inheritances in excess of $100,000 during 2016; make sure to report it on the form 3520 “Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts” to the IRS. This is due at the same time as your personal income […]

In 2017 Gift and Estate Tax Might Go Away

Gift Tax The life­time gift exclusion is $5,450,000. Any amount in excess of this threshold is taxed at 40%. The annual gift exclusion remains $14,000 per person per year. Inheritance Tax/Estate Tax and Planning The life­time estate exclusion is $5,450,000. Any amount in excess of this threshold is taxed at 40%. The estate portability, by […]

Business Valuation

If you know the actual fair market value of your business, then you are in possession of a very valuable tool. Some pundits go so far as to say that business valuation is one of the most important concepts in finance. While that might be debatable, there is no question that every business owner should […]

Plan to Best Defer or Acceleration

Defer/Accelerate Income   Most small businesses utilize cash basis of accounting for their taxes, may defer their current billing and collection efforts to future year, if they believe to have less income or predict the tax rates will be lower next year, and their conduct doesn’t violate any laws. Conversely, if they believe they will have more […]

Benefits to Accelerated Expensing of Assets

First Year Bonus Depreciation The bonus depreciation expense for property acquired and placed in service during 2016 has been extended through 2019. The amount of deprecation is 50 percent for cost of property placed in service during the year, in addition to regular deprecation.   Section 179 Depreciation Under IRC Section 179, now permanent and indexed […]