Do you want to withdraw cash from your closely held corporation at a low tax cost? The easiest way is to distribute cash as a dividend. However, a dividend distribution is taxable to you as a shareholder but it’s not deductible by the corporation. But there are several alternatives that may allow you to withdraw … Read More
Many not-for-profits use fundraising methods that cross state boundaries. If yours is one of them, it may need to register in multiple jurisdictions. But keep in mind that registration requirements vary, sometimes dramatically, from state to state. For example, some states exempt certain nonprofits from registering and others require them to register but drop annual … Read More
We all know college is expensive. Fortunately, there are two sizable federal tax credits for higher education costs that you may be able to claim. The American Opportunity credit generally provides the biggest benefit to most taxpayers. It offers a maximum benefit of $2,500. But it phases out based on modified adjusted gross income (MAGI). … Read More
The IRS is offering a settlement to taxpayers under audit who participated in abusive “micro-captive” insurance transactions. In these deals, promoters and others persuade owners of closely held entities to participate in schemes that lack many of the attributes of genuine insurance. The IRS has long disallowed the related tax benefits claimed by taxpayers. The … Read More
The IRS bonus depreciation regulations, just released by the IRS, contain a crucial clarification. Qualified improvement property (QIP) placed in service after 2017 isn’t eligible for bonus depreciation unless a legislative change is made. When drafting the Tax Cuts and Jobs Act, Congress intended a permanent 15-year depreciation period for QIP. That change would have … Read More
Right now, football teams are trying to put as many wins on the board as possible to make this a special season. Sports can highlight important lessons for business owners about profitability. One is that companies must learn from their mistakes and adjust their profitability game plans accordingly. Typical fumbles include poor customer service, ineffective … Read More
A competition winner must pay tax on the prize. A teenager was awarded a car for good grades and attendance. Her school had entered her in a local car dealership’s competition, along with other qualifying students. Her name was then pulled in a drawing. She asserted that the car was a gift and should be … Read More
Are you a retiree who may owe taxes this year on your Social Security or pension income? The IRS has created a tool that calculates the taxable portion of benefits. It also incorporates that information into an overall estimate of the projected tax liability and withholding for the year. If a withholding change is needed, … Read More
Enforcement revenue at the IRS reaches “an all-time high,” according to a new report. A Treasury Inspector General for Tax Administration (TIGTA) audit showed that, in fiscal year 2018, the IRS collected a record $59.4 billion in enforcement revenue. This was despite a 4% decline in agency personnel over FY 2017. More than half ($30.2 … Read More
The IRS has issued final regs on the 100% additional first-year depreciation deduction. It allows businesses to write off most depreciable business assets in the year they’re placed in service. Changes from the regs proposed in August include qualified improvement property, leasehold improvement property, restaurant property, and retail improvement property. A taxpayer may choose to … Read More