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The Individual Shared Responsibility Provision brings changes to 2014 Income Tax Returns

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Curious about the Health Care Law’s effect on your federal tax liability? Call us to setup an appointment!

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Money Distributed to Partners (Basis & Equity)

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Concerning money (or property) distributed to Partners:

The partner’s basis is decreased (but never below zero) by the following items:

  • The money and adjusted basis of property distributed to the partner by the partnership.
  • The partner’s distributive share of the partnership losses (including capital losses).
  • The partner’s distributive share of nondeductible partnership expenses that are not capital expenditures. This includes the partner’s share of any section 179 expenses, even if the partner cannot deduct the entire amount on his or her individual ...
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Partner’s Share of Company Liabilities

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If a partner’s share of partnership liabilities increases, or a partner’s individual liabilities increase because he or she assumes partnership liabilities, this increase is treated as a contribution of money by the partner to the partnership. However, a partner’s basis in a partnership is only increased by an increase in partnership liabilities that:

(1) create or increase the partnership’s basis in any of its assets, (2) gives rise to a current deduction to the partnership, or (3) is a nondeductible, noncapital ...

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Gifts to Clients or Customers

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A deduction is not available for business gifts made in excess of $25 to a person during the tax year.

If a taxpayer gives a gift to a member of a customer’s family, the gift is generally considered an indirect gift to the customer. This rule does not apply if taxpayer has a bona fide, independent business connection with that family member and the gift is not intended for the customer’s eventual use.

If the taxpayer and the taxpayer’s spouse both give ...

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Listed Property for Depreciation Purposes

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Listed property is any of the following:

  • Passenger automobiles weighing 6,000 pounds or less
  • Any other property used for transportation, unless it is an excepted vehicle
  • Property generally used for entertainment, recreation, or amusement (including photographic, phonographic, communication, and video-recording equipment)
  • Computers and related peripheral equipment, unless used only at a regular business establishment and owned or leased by the person operating the establishment. A regular business establishment includes a portion of a dwelling unit that is used both regularly and exclusively for business

Beginning ...

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Calculating Alternative Minimum Tax Income

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In calculating the Alternative Minimum Tax Income, the first step is to add certain adjustments to taxable income. These include:

  • Personal and dependent exemptions
  • The amount claimed for the standard deduction or, if itemized deductions were claimed, the following items
    1. Medical expenses deducted, not greater than 10% of AGI
    2. State and local tax deductions
    3. Real estate and property tax deductions
    4. Certain interest
    5. Most miscellaneous deductions

Itemized deductions for charitable contributions and casualty and theft loss are not added back in when calculating the Alternative Minimum Tax Income.

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Individual Retirement Arrangements (IRAs)

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An individual retirement account is a trust or custodial account set up in the United States for the exclusive benefit of a taxpayer or his beneficiaries. A taxpayer creates this account with a written document. The document must show that the account meets all of the following requirements:

  • The trustee or custodian must be a bank, a federally insured credit union, a savings and loan association, or an entity approved by the IRS to act as trustee or custodian.
  • The trustee or ...
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U.S. Tax Revenue for 2012

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US Income for TY2012

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Incorporate your business to get tax breaks.

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In the eyes of many small business owners, the corporate world is the realm of massive conglomerates such as Microsoft and General Motors. To be successful and hold the line financially, however, tax experts agree that even the smallest of businesses may benefit by incorporating.

An S corporation, as defined by the Internal Revenue Service, must be a domestic corporation that consists of no more than 100 “allowable shareholders” — including individuals, certain trusts and estates. It may not include partnerships, ...

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When are my estimated tax payments due?

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When are my estimated taxes due?

Never accused of oversimplifying things, the IRS doesn’t break the tax year into four three-month quarters. The first quarter is three months (January 1 to March 31), but the second “quarter” is two months long (April 1 to May 31), the third is three months (June 1 to August 31) and the fourth covers the final four months of the year.

The installment payments are due on April 15, June 15, September 15 and January 15 ...

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