The time to consider tax-saving opportunities for your business is
before its tax year-end.
Some of these opportunities may apply regardless of whether your
business is conducted as a sole proprietorship, partnership,
limited liability company, S corporation, or regular corporation.
Other opportunities may apply only to a particular type of business
organization.
Click on the links below to read more about year-end, and
year-round, tax-saving opportunities for:
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Individual income taxes, whether paid through employer
withholding or quarterly estimates, are probably one of your
largest annual expenditures. So, just as you would shop around for
the best price for food, clothing or merchandise, you want to
consider opportunities to reduce or defer your annual tax
obligation.
Click on the links below to read more about tax-saving
strategies and items that individuals should consider in an effort
to reduce or defer their annual tax obligation.
• 2010
Year-End...
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The recently enacted "Tax Relief, Unemployment Insurance
Reauthorization, and Job Creation Act of 2010" is a sweeping tax
package that includes, among many other items, an extension of the
Bush-era tax cuts for two years, estate tax relief, a two-year
"patch" of the alternative minimum tax (AMT), a
two-percentage-point cut in employee-paid payroll taxes and in
self-employment tax for 2011, new incentives to invest in machinery
and equipment, and a host of retroactively resuscitated and
extended...
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Part 3 of 3
Hiring Unemployed Workers: Hire a
worker who has been unemployed for at least 60 days before year-end
if you are thinking of adding to payroll soon. Your business will
be exempt from paying the employer's 6.2% share of the Social
Security payroll tax on the formerly unemployed new-hire for the
remainder of 2010. Plus, if you keep that formerly unemployed
new-hire on the payroll for a continuous 52 weeks, your business
will be eligible for a nonrefundable tax credit of...
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Part 2 of 3
Flexible Spending Account: Increase the amount you set
aside for next year in your employer's health flexible spending
account (FSA) if you set aside too little for this year. Don't
forget that you cannot set aside amounts to get tax-free
reimbursements for over-the-counter drugs, such as aspirin and
antacids (2010 is the last year that FSAs can be used for
nonprescription drugs).
Selling Securities: As you evaluate investments
held in your taxable brokerage firm accounts, consider...
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Part 1 of 3
The midterm elections have changed the Congressional landscape,
with Republicans winning control of the House of Representatives
and picking up seats in the Senate. Even so, it's still too early
to know exactly how this will affect open tax issues for 2010 and
2011.
Specifically, when the “lame-duck” Congress returns this month, it
must decide whether to “patch” the alternative minimum tax (AMT)
for 2010 (increase exemption amounts, and allow personal credits to
offset the AMT), as it...
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2010: The Right Time to Convert to a Roth?
2010 offers a unique opportunity for high-income
individuals to convert their 401k to a Roth IRA.
As you may know, Distributions from a traditional IRA are generally
taxed at ordinary income rates currently reaching as high as 35%.
(Future tax rates are currently scheduled to rise.) The taxable
portion includes earnings within the tax-deferred account and
amounts attributable to deductible contributions.
Conversely, "qualified distributions" from a Roth...
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2010 Small Business Jobs Act: How Small Businesses Will
be Affected
The recently enacted 2010 Small Business Jobs Act
includes an assortment of changes for small businesses. Listed
below are several, but not all, of the tax breaks and incentives,
as well as the offsets (revenues and raisers) of the new law. For
more details on these changes, click
here.
Tax Breaks and Incentives
- Enhanced small business
expensing
- General business credits of eligible small businesses for 2010
allowed to be carried...
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The
recently enacted 2010
Small Business Jobs Act includes an
assortment of changes for small businesses. Listed below are
several, but not all, of the tax breaks and incentives, as
well as the offsets (revenues and raisers) of the new
law.
Tax Breaks and Incentives
- Enhanced small business expensing
- General business credits of eligible small
businesses for 2010 allowed to be carried back five
years
- General
business credits of eligible small businesses in 2010 aren't
subject to AMT
- S corporation...
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Deciding About a Roth IRA Conversion
Before you know it, the end of the year will be here. For many
individuals contemplating a conversion from a traditional IRA to a
Roth IRA, it is time to make some critical decisions.
Click
here to read more.
Hiring Your Child: Answers to Tax FAQs
Suppose that your child needs an after-school job
while your company is looking to hire extra help. Practical
solution: If you are in a position of authority, you could put your
child on the payroll.
There are several...
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We all know that today’s marketplace is global. What you may not
know is how important it is to minimize your risk when it comes to
foreign currency. Your company may be exposed to foreign currency
risk even if you don’t do business in a foreign currency. However,
there are ways to minimize those risks including foreign currency
hedging. Hedging involves taking an equal and opposite position to
protect against price fluctuations.
It is easy to see where you have foreign currency risk when...
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In addition to health-care related taxes and fees, several other
areas have been targeted to raise more revenue as an offset
to the overall cost of the entire Health Care package. These
additional provisions are estimated to raise $28.1 billion over the
2010-2020 scoring period.
Biofuel
Credit
The cellulosic
biofuel credit was intended to reward taxpayers that use
alternative fuels in industrial and other processes. The Patient
Protection Act, as amended by the House Reconciliation Act,...
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The Patient Protection Act, as amended by the House Reconciliation
Act, raises the threshold for the itemized medical expense
deduction from 7.5 percent of adjusted gross income (AGI) to 10
percent of AGI for regular income tax purposes effective for tax
years beginning after December 31, 2012. However, individuals age
65 and older (and their spouses) would be temporarily exempt from
the increase. The exemption for seniors would apply to any tax year
beginning after December 31, 2012 and ending...
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The Patient Protection Act, as amended by the House Reconciliation
Act, modifi es the definitions of qualified medical expenses for
health FSAs, HSAs, and HRAs to conform them to the defi nition used
for the medical expense itemized deduction (excluding
over-the-counter medicines prescribed by a health care
professional). The health care package also caps health FSA
contributions at $2,500 per year after 2012, which is indexed
annually for inflation after 2013.
The Patient Protection Act, as...
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The Patient Protection Act, as amended by the House
Reconciliation Act, imposes annual nondeductible fees on various
health-related industries, such as medical device manufacturers and
importers, health insurance providers and others. The annual fees
would be allocated across industry sectors according to market
share. The patient Protection Act, as amended, delays the effective
dates of the taxes on brand name pharmaceuticals sales by one year
until 2011 and on health insurance providers for...
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The Patient Protection Act, as amended by the House Reconciliation
Act, will impose a 40 percent nonrefundable excise tax on group
insurers if annual premium payments exceed an inflation adjusted
$10,200 for individual coverage and $27,500 for family coverage
beginning in 2018.
The Patient Protection Act, as amended by the House Reconciliation
Act, also provides higher premium levels for retirees and employees
in certain high-risk professions: $11,850 for individual coverage
and $30,950 for...
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The Patient Protection Act, as amended by the House
Reconciliation Act, broadens the Medicare tax base for higher
income taxpayers by:
1. Imposing an additional of 0.9 percent on earned income in excess
of $200,000 for individuals and $250,000 for families; and
2. Imposing an unearned income Medicare contribution of 3.8 percent
on investment income for individuals with AGI above $200,000 and
joint fi lers with AGI above $250,000.
Impact
The 3.8 percent Medicare “contribution” would be effective...
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The Patient Protection Act, as amended by the House
Reconciliation Act, provides a temporary sliding-scale small
employer tax credit to help offset the cost of employer-provided
coverage. Generally, a small employer is one with fewer than 25
employees and average annual wages of less than $40,000.
In 2011 through 2013, eligible employers may qualify for a tax
credit for up to 35 percent of their contribution toward the
employee’s health insurance premium. In 2014 and beyond, eligible
employers...
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The Patient Protection Act, as amended by the House Reconciliation
Act, does not require employers to provide health insurance
coverage. However, employers that do not provide minimum essential
coverage will be liable for an additional tax. The health care
package also requires automatic enrollment in health insurance
plans sponsored by large and mid-size employers.
Employers (essentially large and mid-size employers for purposes of
the House Amended Patient Protection Act) that fail to...
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The Patient Protection Act, as amended by the House Reconciliation
Act, requires individuals not otherwise eligible for Medicaid or
Medicare or other government sponsored coverage to maintain minimum
essential coverage beginning after 2013. Individuals who fail to
maintain minimum essential coverage would be liable for a penalty.
The Patient Protection Act uses a formula to calculate the penalty
taking into account the taxpayer’s household income and a flat
dollar amount.
The Patient Protection...
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