Weekly Tax Brief

What you can deduct when volunteering

Details: Published: 26 July 2018 26 July 2018

While donations to charity of cash or property generally are tax deductible (if you itemize), donations of time or services aren’t. But you potentially can deduct out-of-pocket costs associated with volunteer work, such as supplies, uniforms, transportation and even travel. To be deductible, the costs can’t be reimbursed or be “personal, living or family” expenses. And they must be directly connected to the services you’re providing and be incurred only because of your volunteering. Additional rules apply; contact us with questions.

Choosing the best business entity structure post-TCJA

Details: Published: 23 July 2018 23 July 2018

For tax years beginning in 2018 and beyond, the Tax Cuts and Jobs Act (TCJA) created a flat 21% federal income tax rate for C corporations. Under prior law, C corporations were taxed at rates as high as 35%. The TCJA also reduced individual income tax rates, which apply to sole proprietorships and pass-through entities, including partnerships, S corporations, and, typically, limited liability companies (LLCs). The top rate, however, dropped only slightly, from 39.6% to 37%.

Home green home: Save tax by saving energy

Details: Published: 19 July 2018 19 July 2018

“Going green” at home can reduce your tax bill in addition to your energy bill, all while helping the environment. To reap all three benefits, you need to buy and install certain types of renewable energy equipment in your home. For 2018, you may be eligible for a tax credit of 30% of expenditures for installing qualified solar electricity generating equipment, solar water heating equipment, wind energy equipment, geothermal heat pump equipment and fuel cell electricity generating equipment. Additional rules and limits apply. To learn more, contact us.

2018 Q3 tax calendar: Key deadlines for businesses and other employers

Details: Published: 16 July 2018 16 July 2018

Here are some key tax-related deadlines for businesses and other employers during Quarter 3 of 2018. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. Contact us to ensure you’re meeting all applicable deadlines and to learn more about the filing requirements.

Do you know the ABCs of HSAs, FSAs and HRAs?

Details: Published: 12 July 2018 12 July 2018

Do you know the ABCs of HSAs, FSAs and HRAs? The accounts in this “alphabet soup” offer tax-advantaged health care funding. If you have a qualified high-deductible health plan (HDHP), you can contribute to an HSA. It can grow tax-deferred similar to an IRA. An HDHP isn’t required for you to contribute to an FSA. What you don’t use by year end, you lose, but there are exceptions. An HRA also doesn’t require an HDHP, but only your employer can contribute. Any unused portion typically is carried forward. Questions about taxes and health care expenses? Contact us.

Consider the tax advantages of investing in qualified small business stock

Details: Published: 05 July 2018 05 July 2018

Investing in qualified small business (QSB) stock offers some attractive tax advantages, especially considering that the TCJA didn’t cut long-term capital gains rates: If you buy QSB stock in 2018 and hold it beyond the 5-year mark in 2023, you can enjoy 100% exclusion of gain when you sell it. If you don’t want to hold the stock that long but within 60 days of selling it you buy other QSB stock with the proceeds, you can defer tax on the gain until you sell the new stock. Contact us for more about the various rules that apply and other important considerations.

The tax impact of the TCJA on estate planning

Details: Published: 28 June 2018 28 June 2018

The massive changes the TCJA made to income taxes have garnered the most attention. But the new law also made major changes to gift and estate taxes. While the TCJA didn’t repeal these taxes, it did significantly reduce the number of taxpayers who’ll be subject to them by more than doubling the gift and estate tax exemption. Yet factoring taxes into your estate planning is still important. First, the higher exemptions are only temporary. Second, you still may face state estate tax. Third, tax-smart estate planning can reduce income tax. Questions? Contact us.

Factor in state and local taxes when deciding where to live in retirement

Details: Published: 21 June 2018 21 June 2018

Thinking about retiring to another state? Consider state and local taxes. A state that has no personal income tax may appear to be the best option. But if you don’t also factor in property, sales and estate taxes, you could be hit with unpleasant tax surprises. Also look at what types of income a state taxes. Some don’t tax wages but do tax interest and dividends. Others offer tax breaks for retirement plan and Social Security income. And keep in mind the TCJA’s new $10,000 limit on the federal deduction for state and local taxes. Contact us to learn more.

What businesses need to know about the tax treatment of bitcoin and other virtual currencies

Details: Published: 14 June 2018 14 June 2018

Most small businesses aren’t yet accepting bitcoin or other virtual currency payments, but more and more larger businesses are. And the trend may trickle down to smaller businesses. What are the tax consequences? The IRS has yet to offer much guidance, but it has established that bitcoin should be treated as property, not currency, for federal income tax purposes. So businesses accepting bitcoin payments must report gross income based on the fair market value of the virtual currency when received, measured in equivalent U.S. dollars. Contact us to learn more.

Can you deduct business travel when it’s combined with a vacation?

Details: Published: 07 June 2018 07 June 2018

This summer are you going on a business trip in the U.S. and tacking on some vacation days? Are you a business owner or self-employed? You may be able to deduct some of your expenses. Transportation costs to and from the business activity location may be 100% deductible if the primary reason for the trip is business. Out-of-pocket expenses for business days are generally fully deductible. Examples include lodging, meals (subject to the 50% disallowance rule), seminar and convention fees, and cab fare. Additional rules and limits apply. Contact us with questions.

More Articles ...