Category Archive for "Tax Tips"

How S Corporations Can Save on Federal Employment Taxes

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If you own an unincorporated small business, you may be getting fed up with high self-employment (SE) tax bills. One way to lower your SE tax liability is to convert your business to an S corporation. SE Tax Basics Sole…

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Quick Tax Tip: Don’t Overlook Miscellaneous Itemized Deductions

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Many people itemize deductions on Schedule A of their tax returns, rather than taking the standard deduction. Your tax preparer will generally advise you to do so if your allowable itemized deductions exceed the standard deduction. Most itemized deductions are…

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Quick Tip: ‘Loan Payments’ Can Be Taxable Corporate Distributions to Shareholders

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There can be negative tax consequences when purported loan payments are recast as corporate distributions to shareholders. In some cases, the courts have ruled that withdrawals from two closely held corporations were constructive corporate distributions rather than loan proceeds and repayments….

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Lessons from Tax Court: Defaulting on Retirement Plan Loans May Cause Taxable Distributions

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In one decision, the U.S. Tax Court concluded that the IRS was correct in determining that a taxpayer who failed to make timely payments on loans from her employer’s qualified retirement plan defaulted on the loans and received deemed taxable…

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Lessons From Tax Court: MBA Costs Can Be Deductible, But Don’t Get Carried Away!

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As an employee or self-employed individual, can you deduct the cost of getting an MBA? What about expenses incurred to improve your general knowledge? Two recent U.S. Tax Court decisions provide answers to these questions. But, first, here’s some background…

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A Few Examples of Deductible Heavy Vehicles

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Here’s part two of last week’s article on Year End Tax Strategies for 2017: Example 1: New Heavy Vehicle Your business uses the calendar year for tax purposes. You buy a new $65,000 Cadillac Escalade and use it 100% for…

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Year-End Tax Strategies for Small Businesses

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It’s not too late to take steps to significantly reduce your 2016 business income tax bill and lay the groundwork for tax savings in future years. Here’s a summary of some of the most effective year-end tax-saving moves for small…

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Quick Tax Tips: Are Frequent Flyer Miles Ever Taxable?

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If you recently redeemed frequent flyer miles to treat the family to a fun summer vacation or to take your spouse on a romantic getaway, you might assume that there are no tax implications involved. And you’re probably right —…

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Quick Tip: Are You Timing Business Income and Expenses to Your Tax Advantage?

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Typically, it’s better to defer tax. One way is through controlling when your business recognizes income and incurs deductible expenses. Here are two timing strategies that can help businesses do this: Defer income to next year. If your business uses…

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IRA Owner Taxed on Attempted Loan Transaction

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In another decision, the Tax Court concluded that a multi-step transaction intended to result in a loan from the taxpayer’s IRA to a third party — to be held by the IRA as an investment — resulted in a taxable…

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