Planning for Capital Gains

In order to effectively plan to minimize capital gain taxes, a basic understanding of the capital gain rules is necessary, especially those regarding capital gain rates and capital losses. Current capital gain rates used to compute a taxpayer’s tax liability on the sale of securities and other investment property consists of the following: Ordinary income […]

Deducting Health Care Costs

Taxpayers have a few opportunities to deduct health care and medical costs when computing taxable income. These opportunities could result in either a deduction to adjusted gross income (“AGI”) or a deduction from AGI, with the former typically being more advantageous than the latter. Health care costs that may be deductible include: Health insurance premiums […]

Property Capitalization Rules

The Internal Revenue Service (“IRS”) issued final regulations governing repairs to and capitalization of tangible property effective January 1, 2014 that will affect and challenge nearly every business. These final regulations were crafted to provide a general framework for distinguishing between capital expenditures and deductible supply, repair and maintenance costs. Generally, taxpayers (e.g. sole proprietors, […]

Business Use of Autos

If a taxpayer uses a vehicle for both business and personal use, the expenses attributable to the business purpose may be deductible. Before any deduction can be taken, the taxpayer must be able to substantiate their business use by adequate records or sufficient corroborating evidence. Once the business miles are substantiated, the vehicle’s operating expenses […]

Reducing Your Self-Employment Taxes

A sole proprietorship is an unincorporated business where the individual owns the business assets directly and has the unlimited personal liability for any debts, claims, or other obligations associated with the business. The profit from a small business operated as a sole proprietorship is reported on Schedule C of the business owner’s personal income tax […]

Renting Out a Home

Homes which are both rented out and used for personal use during the same tax year are considered mixed-use homes and subject to specific tax reporting rules. Taxpayers need to determine the homes tax classification and apply the reporting rules that correspond to their level of use. Do you know which rules apply to the […]

Gain Exclusion on the Sale of Principal Residence

Before selling your home, it is imperative that you consider the tax ramifications associated with the sale. With proper tax planning, you can exclude all or a portion of any gain on the sale of your principal residence. Taxpayers can exclude up to $250,000 of gain ($500,000 for married couples and certain surviving spouses) on […]

Accounting Checklist for Small Businesses

As the end of the calendar year approaches, small business owners or their accountants need to begin the process of closing the company’s books. Do you know what you should be doing before and after December 31st to close your books? Certain steps in the year-end closing of your company’s books need to be performed […]

IRA Required Minimum Distribution

Some investment companies estimate that nearly 40% of people over age 70 1/2 who own IRA accounts have yet to make their required minimum distributions as required by law. Although some people wait until the end of the year to maximize the amount of tax-deferred compounding in their IRA account, others simply are unaware of […]

Tax Provisions Set to Expire

Over 50 tax provisions included in previously enacted legislation are set to expire at the end of 2013. Although Congress could pass legislation continuing some or all of the expiring tax provisions as a way to continue economic growth and consumer spending, there are no guarantees they will do so. If no action is taken […]