Posts Tagged "tax savings"

Year-end tax checklist

Posted on Nov 5, 2017

As the year draws to a close, there are several tax-saving ideas you should consider.Use this checklist to make sure you don’t miss an opportunity before the year is out. Retirement distributions and contributions. Make final contributions to your qualified retirement plan, and take any required minimum distributions from yourretirement accounts. The penalty for not taking minimum distributions can be high. Investment management. Rebalance your investment portfolio, and take any final investment gains and losses. Capital losses can be used to net against your capital gains. You can also take up to $3,000 of capital losses in excess of capital gains each year and use it to lower your ordinary income. Last-minute charitable giving. Make a late-year charitable donation. Even better, make the donation with appreciated stock you’ve owned more than a year. You can often can make a larger donation – and get a larger deduction – without paying capital gains taxes. Noncash contribution opportunity.Gather up noncash items for donation,document the items and give those in good condition to your favorite charity. Make sure you get a receipt from the charity, and take a photo of the items donated just in case. Gifts to dependents and others.You may provide gifts to an individual tax-free of up to $14,000 per year in total. Remember that all gifts given (birthdays, holidays, etc.) count toward the total. Organize records now.Start collecting and organizing your end-of-year tax records. Estimate your tax liability and make any required estimated tax...

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Business tax: time to consider Section 179?

Posted on Oct 25, 2017

Section 179 expensing can be a very powerful tax-planning tool for small- and medium-sized businesses acquiring capital assets. While it doesn’t change the amount of depreciation you can take over the life of a capital purchase, it can change the timing by allowing you to deduct your purchase in the first year you place it in service. Review these details if you’re considering depreciating your business assets under Section 179: Section 179 allows deducting the expense of up to $510,000 of qualified business purchases. A Section 179 deduction cannot create a loss for the business. A Section 179 deduction must be for business use. If an asset is not entirely used for business, the allowance is reduced. If you sell a Section 179 asset prior to the full depreciation period, you will have to record any sales proceeds as taxable income. Many states limit the use of this federal shifting of depreciation. Taking Section 179 for capital purchases can be useful, but it’s not for everyone. Using it for an immediate tax break means it’ll no longer be available for future...

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Say Goodbye to the College Tuition Deduction

Posted on Sep 20, 2017

Congress decided not to extend this $4,000 deduction for 2017, leaving many parents worried that college will now be more expensive. However, Congress left in place two popular education credits that may offer a more valuable tax break: The AOTC. The American Opportunity Tax Credit (AOTC) is a credit of up to $2,500 per student per year for qualified undergraduate tuition, fees and course materials.The deduction phases out at higher income levels, and is eliminated altogether for married couples with a modified adjusted gross income of $180,000 ($90,000 for singles). Lifetime Learning Credit. The Lifetime Learning Credit provides an annual credit of 20 percent on the first $10,000 of tuition and fees, for either undergraduate or graduate level classes. There is no lifetime limit on the credit, but only couples making less than $131,000 per year (or singles making $65,000) qualify. Unlike the AOTC, this deduction is per tax return, not per student. So who is affected by the loss of the tuition and fees deduction? If you are paying for your student’s graduate-level courses and are making too much to qualify for the Lifetime Learning Credit, the tuition and fees deduction is generally the only means you have to reduce your tax bill. Thankfully, there are many other tax benefits that help reduce the cost of education. There are breaks for employer-provided tuition assistance, deductions for student loan interest, tax-beneficial college savings options, and many other tax-planning...

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Five home office deduction mistakes

Posted on Jul 25, 2017

Here are five common mistakes of those who deduct home office expenses. 1. Not taking it. Some believe the home office deduction is too complicated, while others believe taking the deduction increases your chance of being audited. 2. Not exclusive or regular. The space you use must be used exclusively and regularly for your business. Exclusively: Your home office cannot be used for another purpose. Regularly: It should be the primary place for conducting regular business activities, such as record-keeping and ordering. 3. Mixing up your other work. If you are an employee for someone else in addition to running your own business, be careful in using your home office to do work for your employer.Generally, IRS rules state you can only use a home office deduction as an employee if your employer doesn’t provide you with a local office. 4. The recapture problem. When selling your home you will need to account for any home office depreciation. This depreciation recapture rule creates a possible tax liability for many unsuspecting home office users. 5. Not getting help. The home office deduction can be tricky, so ask for help, especially if you fall under one of these...

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Three actions to save for retirement

Posted on Jul 20, 2017

If you haven’t started saving for retirement or you haven’t saved enough , here are three actions you can take to put you in a better position during your golden years: 1.Contribute as much as possible every year to a 401(k) pretax retirement plan, up to the $18,000 maximum, or $24,000 if you are age 50 or older. 2.Contribute as much as possible to a Traditional or Roth IRA every year, up to the $5,500 maximum, or $6,500 if you are age 50 or older. 3. Contribute as much as possible to a health savings account (HSA), which can be used to offset medical expenses, up to $3,400 a year, or $4,400 if you are age 55 orolder. If you’d like to review your tax-advantaged retirement strategy, call us to schedule an...

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