Tax Extenders to Use in Your Tax Planning

Temporary tax provisions that have been passed by Congress on an annual basis for several years are more commonly referred to as “tax extenders.”  Most of the approximately 50 tax provisions that comprise the usual list of tax extenders were originally enacted as economic incentives; they were meant to encourage taxpayers to spend money in […]

Health Care Penalty

If a taxpayer, their spouse (if married and filing jointly) or any of their dependents did not have minimum essential health care coverage or a health coverage exemption for each month during 2014, they will be required to compute and report a health care penalty (a.k.a. shared responsibility payment) on their 2014 income tax return. […]

Health Coverage Exemptions

As required by the Affordable Care Act (a.k.a. “Obamacare”) individuals were required beginning in 2014 to purchase qualified health care coverage for themselves, their spouse (if filing jointly) and their dependents. If the taxpayer failed to obtain coverage or allowed the coverage to lapse during the year, they must qualify for a health coverage exemption […]

Qualified Tuition Programs

Qualified Tuition Programs (“QTP”), a.k.a. Section 529 College Savings Plans, are education tax incentive programs that enable a person to either prepay a beneficiary’s tuition (i.e., prepaid plans) or contribute to a savings account established for paying a beneficiary’s qualified education expenses (i.e., savings plans). The two types can be summarized as follows: Prepaid Plans […]

Selecting the Right Education Tax Incentive

The taxpayer has several tax credits and deductions they can claim to reduce their income tax if they have incurred education costs during the year. The difficulty is claiming the one which creates the greatest benefit. The first step in selecting the credit or deduction that is most beneficial to your circumstances is to compare […]

Stock Donations

Donating appreciated stock is an excellent tax-efficient method of funding charitable gifts because the taxpayer making the donation avoids paying capital gains tax on the appreciation while still being able to deduct the fair market value of the stock as a charitable contribution. The taxpayer’s process for valuing, substantiating and reporting the stock donation depends […]

Maximizing Charitable Deductions

Taxpayers can lower their taxable income by incurring travel, paying for out-of-pocket expenses as a volunteer, or directly giving money or property to any of the following: Churches, synagogues, temples, mosques or other religious organizations; Federal, state and local governments (if the contribution is solely for a public purpose); Nonprofit schools and hospitals; Public parks […]

Special Loss Allowance for Passive Losses

Passive activities are defined as any trade or business activity in which the taxpayer does not materially participate. The deductibility of losses from passive activities is limited to income generated from other passive activities. Any passive losses not allowed are carried forward to subsequent tax years. Although rental real estate is generally a passive activity, […]

Maximizing Real Property Depreciation

Cost segregation is the practice of identifying depreciable assets and their costs, and classifying those assets into the appropriate depreciable life in order to obtain the maximum allowable depreciation under federal tax law. The following three-step process for allocating costs helps taxpayers assign as much cost as possible to the most advantageous depreciable life: Make […]

Small Business Stock Losses

Section 1244 of the tax code encourages new investment in small businesses by permitting investors to claim an ordinary loss on disposition (including worthlessness) of eligible small business stock. The maximum deductible ordinary loss under Section 1244 is limited to $50,000 per year ($100,000 for married filing joint). If the loss exceeds the annual deductible […]