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Adam’s Tax Accounting Service Blog

Note: Tax advice, articles, and content contained on this site are intended for informational and educational purposes only. They are not a substitute for professional advice. Tax matters are can be extremely complex and vary greatly for each individual or company. Please click here to read our complete disclosure and disclaimer for the information presented on this site.

Tax Impact of Investor vs. Trader Status

Posted by on Sep 22, 2016 in Blog, General, Management, Tax Tips | Comments Off on Tax Impact of Investor vs. Trader Status

Tax Impact of Investor vs. Trader Status

If you invest, whether you’re considered as an investor or a trader can have a significant impact on your tax bill. Do you know the difference? Investors Most people who trade stocks are classified as investors for tax purposes. This means any net gains are treated as capital gains rather than ordinary income. That’s good if your net gains are long-term (that is, you’ve held the investment more than a year) because you can enjoy the lower long-term capital gains rate. However, any investment-related expenses (such as margin interest, stock...

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Looking For a Retirement Plan For Your Business? Here’s One SIMPLE Option

Posted by on Sep 19, 2016 in Blog, General, Management, Tax Tips | Comments Off on Looking For a Retirement Plan For Your Business? Here’s One SIMPLE Option

Looking For a Retirement Plan For Your Business? Here’s One SIMPLE Option

Has your small business procrastinated in setting up a retirement plan? You might want to take a look at a SIMPLE IRA. SIMPLE stands for “savings incentive match plan for employees.” If you decide a SIMPLE IRA is right for your company, you must establish it by no later than October 1 of the year for which you want to make your initial deductible contribution. (If you’re a new employer and come into existence after October 1, you can establish the SIMPLE IRA as soon as administratively feasible.) SIMPLE IRA Pros and cons Here are some of the...

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Are Frequent Flyer Miles Ever Taxable?

Posted by on Sep 15, 2016 in Blog, General, Management, Tax Tips | Comments Off on Are Frequent Flyer Miles Ever Taxable?

Are Frequent Flyer Miles Ever Taxable?

If you recently redeemed frequent flyer miles to treat the family to a fun summer vacation or to take your spouse on a romantic getaway, you might assume that there are no tax implications involved. You’re probably right, but there’s a chance your miles could be taxable. Usually tax free As a general rule, miles awarded by airlines for flying with them are considered nontaxable rebates. The same goes for miles awarded for using a credit or debit card. The IRS partially addressed the issue in Announcement 2002-18, where it said “Consistent...

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The IRS Can Reclassify S Corporation Distributions As Wages

Posted by on Sep 12, 2016 in Blog, General, Management, Tax Tips | Comments Off on The IRS Can Reclassify S Corporation Distributions As Wages

The IRS Can Reclassify S Corporation Distributions As Wages

If you run your business as an S corporation, you’re probably both a shareholder and an employee. As such, the corporation pays you a salary that reflects the work you do for the business. This means you (and your company) must remit payroll tax on some or all of your wages. By distributing profits in the form of dividends rather than salary, an S corporation and its owners can avoid payroll taxes on these amounts. Because of the additional 0.9% Medicare tax on wages in excess of $200,000 ($250,000 for joint filers and $125,000 for married...

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Now’s The Time To Start Thinking About “Bunching” Miscellaneous Itemized Deductions

Posted by on Sep 8, 2016 in Blog, General, Management, Tax Tips | Comments Off on Now’s The Time To Start Thinking About “Bunching” Miscellaneous Itemized Deductions

Now’s The Time To Start Thinking About “Bunching” Miscellaneous Itemized Deductions

Many of the expenses that may qualify as miscellaneous itemized deductions are deductible only to the extent they exceed, in aggregate, 2% 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. Should you bunch into 2016? If your miscellaneous itemized deductions are getting close, or have already exceed, the 2% floor you might want to consider incurring and...

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Using Independent Contractors? Protect Your Business With These Tips

Posted by on Sep 5, 2016 in Blog, General, Management, Tax Tips | Comments Off on Using Independent Contractors? Protect Your Business With These Tips

Using Independent Contractors? Protect Your Business With These Tips

Many businesses use independent contractors as a way to keep payroll taxes to a minimum and reduce the cost of fringe benefits. But using outside workers may result in other problems. It’s common for the IRS to question businesses about whether workers should be classified as employees or independent contractors for federal employment tax purposes. If the IRS reclassifies a worker as an employee, your company could be hit with back taxes, interest and penalties. You could also be liable for employee benefits that should have been provided but...

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What You Need To Know About Estimated Tax Payments

Posted by on Sep 1, 2016 in Blog, General, Management, Tax Tips | Comments Off on What You Need To Know About Estimated Tax Payments

What You Need To Know About Estimated Tax Payments

Paying the proper amount of tax by the annual federal income tax filing deadline isn’t enough to avoid interest and penalties; you must also meet requirements for paying tax throughout the year through withholding and/or quarterly estimated tax payments. If you have income from sources such as self-employment, interest, dividends, alimony, rent, prizes, awards or the sales of assets, you may have to pay estimated tax. The rules Generally, you must pay estimated tax if both of these statements apply: You expect to owe at least $1,000 in tax...

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Combining Business and Vacation Travel: What Can You Deduct?

Posted by on Aug 29, 2016 in Blog, General, Management, Tax Tips | Comments Off on Combining Business and Vacation Travel: What Can You Deduct?

Combining Business and Vacation Travel: What Can You Deduct?

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 expenses Transportation costs to and from the location of your business activity are 100% 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 travel, then generally none of your transportation expenses are deductible. What costs can be included in your deduction? Travel to...

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3 Strategies For Tax-smart Giving

Posted by on Aug 25, 2016 in Blog, General, Management, Tax Tips | Comments Off on 3 Strategies For Tax-smart Giving

3 Strategies For Tax-smart Giving

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 other income tax consequences to consider. It’s also possible the estate tax exemption could be reduced or your wealth could increase...

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Accelerate Depreciation Deductions With A Cost Segregation Study

Posted by on Aug 22, 2016 in Blog, General, Management, Tax Tips | Comments Off on Accelerate Depreciation Deductions With A Cost Segregation Study

Accelerate Depreciation Deductions With A Cost Segregation Study

Business owners could see substantial tax savings faster by conducting cost segregation studies. These studies identify property components and their costs, allowing you to maximize current depreciation deductions by using shorter lives and speeding up depreciation rates available for the qualifying parts of the property. Depreciation rules Buildings generally are depreciated over 27.5 years (residential rental) or 39 years (commercial) using the straight-line method. This recovery period applies to real property, which includes buildings as...

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