Many expenses that may qualify as miscellaneous itemized deductions are deductible only to the extent they exceed, in aggregate, 2 percent of your adjusted gross income (AGI). Bunching these expenses into a single year may allow you to exceed this “floor.” So now is a good time to add up your potential deductions to date to see if bunching is a smart strategy for you this year.
Bunching into 2016
If your miscellan... more
If you go on a business trip within the United States and tack on some vacation days, you can deduct some of your expenses. But exactly what can you write off?
Transportation costs to and from the location of your business activity are 100 percent deductible as long as the primary reason for the trip is business rather than pleasure. On the other hand, if vacation is the primary reason for your... more
Giving away assets during your life will help reduce the size of your taxable estate, which is beneficial if you have a large estate that could be subject to estate taxes. For 2016, the lifetime gift and estate tax exemption is $5.45 million (twice that for married couples with proper estate planning strategies in place).
Even if your estate tax isn’t large enough for estate taxes to be a concern, there are income ... more
The Democratic and Republican nominating conventions triggered an early recess for Congress. Before recessing, the House voted to undo part of the Affordable Care Act (ACA) and approved a reduced budget for the Internal Revenue Service (IRS). Leading tax writers in the Senate addressed tax-related identity theft and home buying incentives. Key legislation initiatives include:
Before passage of the ACA, taxpayers ... more
Last year a break valued by many charitably inclined retirees was made permanent — the charitable IRA rollover. If you’re age 70½ or older, you can make direct contributions — up to $100,000 annually — from your IRA to qualified charitable organizations without owing any income tax on the distributions.
Satisfy Your RMD
A charitable IRA rollover can be used to satisfy required minimum distributions (RMDs)... more
Taxpayers who were granted the Eligible Manufacturing Personal Property (EMPP) Exemption for the 2016 tax year must now create an account through Michigan Treasury Online (MTO), certify their Essential Services Assessment (ESA) Statement, and pay their tax liability in full.
Once claimants were granted the exemption after filing Form 5278, the assessors transmitted the information to The Department of Treasury, who the... more
With recent storms causing flooding and wildfires happening nationwide, it’s a very ideal time to implement or revisit the disaster recovery plan for your business.
A “disaster” can come in many forms, such as:
A fire, flood, hurricane, tornado or ice storm that damages, destroys or isolates your business’ premises.
A power surge that fries your computer systems and the intellectual property it contains.
You can only deduct losses from an S corporation, partnership or LLC if you “materially participate” in the business. If you don’t, your losses are generally “passive” and can only be used to offset income from other passive activities. Any excess passive loss is suspended and must be carried forward to future years.
Material participation is determined based on the time you spend in a business activity. For ... more
As an employee benefit plan sponsor, your job seems never ending with the numerous Department of Labor (DOL) rules and regulations concerning a plan fiduciary. If you take an organized, methodical approach, you can satisfy your fiduciary obligations without it becoming an unduly onerous process. An added plus is that the more methodical you are, the more evidence you’ll have to show that you’ve met your fiduciary duti... more
The income tax credit for certain energy-efficient home improvements and equipment purchases was extended through 2016 by the Protecting Americans from Tax Hikes Act of 2015 (the PATH Act). So, you still have time to save both energy and taxes by making these eco-friendly investments.
The credit is for expenses related to your principal residence. It equals 10% of certain qualified improvement expenses ... more