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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.

Larger Deduction Might Be Available to Businesses Providing Meals to Their Employees

Posted by on Aug 31, 2017 in Blog, General, Management, Tax Tips | 0 comments

Larger Deduction Might Be Available to Businesses Providing Meals to Their Employees

When businesses provide meals to their employees, generally their deduction is limited to 50%. But there are exceptions to the rule. One is if the meal qualifies as a de minimis fringe benefit under the Internal Revenue Code. A recent U.S. Tax Court ruling could ultimately mean more employer-provided meals will be 100% deductible under this exception. The court found that the Boston Bruins hockey team’s pregame meals to players and personnel at out-of-town hotels qualified as a de minimis fringe benefit. Qualifying requirements For meals to...

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Yes, You Can Undo a Roth IRA Conversion

Posted by on Aug 28, 2017 in Blog, General, Management, Tax Tips | 0 comments

Yes, You Can Undo a Roth IRA Conversion

Converting a traditional IRA to a Roth IRA can provide tax-free growth and the ability to withdraw funds tax-free in retirement. But what if you convert a traditional IRA — subject to income taxes on all earnings and deductible contributions — and then discover you would have been better off if you hadn’t converted it? Fortunately, it’s possible to undo a Roth IRA conversion, using a “recharacterization.” Reasons to recharacterize There are several possible reasons to undo a Roth IRA conversion. They might include: You lack sufficient liquid...

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How to Determine If You Need to Worry About Estate Taxes

Posted by on Aug 24, 2017 in Blog, General, Management, Tax Tips | Comments Off on How to Determine If You Need to Worry About Estate Taxes

How to Determine If You Need to Worry About Estate Taxes

Among the taxes being considered for repeal as part of tax reform legislation is the estate tax. This tax applies to transfers of wealth at death, hence why it’s commonly referred to as the “death tax.” Its sibling, the gift tax (also being considered for repeal) applies to transfers during life. Yet most taxpayers won’t face these taxes even if the taxes remain in place. Exclusions and exemptions For 2017, the lifetime gift and estate tax exemption is $5.49 million per taxpayer. (The exemption is annually indexed for inflation.) If your...

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Put Your Audit in Reverse to Save Sales and Use Tax

Posted by on Aug 21, 2017 in Blog, General, Management, Tax Tips | Comments Off on Put Your Audit in Reverse to Save Sales and Use Tax

Put Your Audit in Reverse to Save Sales and Use Tax

It’s a good bet your state tax authorities will let you know if you haven’t paid enough sales and use taxes, but what are the odds that you’ll be notified if you’ve paid too much? The chances are slim — so slim that many businesses use reverse audits to find overpayments so they can seek refunds. Take all of your exemptions In most states, businesses are exempt from sales tax on equipment used in manufacturing or recycling, and many states don’t require them to pay taxes on the utilities and chemicals used in these processes, either. In some...

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Will Congress Revive Expired Tax Breaks?

Posted by on Aug 17, 2017 in Blog, General, Management, Tax Tips | Comments Off on Will Congress Revive Expired Tax Breaks?

Will Congress Revive Expired Tax Breaks?

Most of the talk about possible tax legislation this year has focused on either wide-sweeping tax reform or taxes that are part of the Affordable Care Act. But there are a few other potential tax developments for individuals to keep an eye on. Back in December of 2015, Congress passed the PATH Act, which made a multitude of tax breaks permanent. However, there were a few valuable breaks for individuals that it extended only through 2016. The question now is whether or not Congress will extend them for 2017. The education break One tax break...

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Material Participation Key to Deducting LLC and LLP Losses

Posted by on Aug 14, 2017 in Blog, General, Management, Tax Tips | Comments Off on Material Participation Key to Deducting LLC and LLP Losses

Material Participation Key to Deducting LLC and LLP Losses

If your business is a limited liability company (LLC) or a limited liability partnership (LLP), you know these structures offer liability protection and flexibility as well as tax advantages. But did you know they once also had a significant tax disadvantage: The IRS used to treat all LLC and LLP owners as limited partners for purposes of the passive activity loss (PAL) rules, which can result in negative tax consequences. Fortunately, today LLC and LLP owners can be treated as general partners, which means they can meet any one of seven...

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A Refresher on the ACA’s Tax Penalty on Individuals Without Health Insurance

Posted by on Aug 10, 2017 in Blog, General, Management, Tax Tips | Comments Off on A Refresher on the ACA’s Tax Penalty on Individuals Without Health Insurance

A Refresher on the ACA’s Tax Penalty on Individuals Without Health Insurance

Now that Affordable Care Act (ACA) repeal and replacement efforts appear to have collapsed, at least for the time being, it’s a good time for a refresher on the tax penalty the ACA imposes on individuals who fail to have “minimum essential” health insurance coverage for any month of the year. This requirement is commonly called the “individual mandate.” Penalty exemptions First, let’s take a quick look at the available exceptions to the penalty. Taxpayers may be exempt if they fit into one of these categories for 2017: Their household income...

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6 Ways to Control Your Unemployment Tax Costs

Posted by on Aug 7, 2017 in Blog, General, Management, Tax Tips | Comments Off on 6 Ways to Control Your Unemployment Tax Costs

6 Ways to Control Your Unemployment Tax Costs

Unemployment tax rates for employers vary from state to state. Your unemployment tax bill may be influenced by several factors. These could include the number of former employees who’ve filed unemployment claims with the state, your current number of employees, and your business’s age. Typically, the more claims made against a business, the higher the unemployment tax bill. Here are six ways to control your unemployment tax costs: 1. Buy down your unemployment tax rate if your state permits it. Some states allow employers to annually buy down...

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3 Midyear Tax Planning Strategies for Individuals

Posted by on Aug 3, 2017 in Blog, General, Management, Tax Tips | Comments Off on 3 Midyear Tax Planning Strategies for Individuals

3 Midyear Tax Planning Strategies for Individuals

In the quest to reduce your tax bill, year-end planning can only go so far because tax-saving strategies take time to implement. Here are three strategies that can be more effective if you begin executing them midyear: 1. Consider your bracket The top income tax rate is 39.6% for taxpayers with taxable income over $418,400 (singles), $444,550 (heads of households) and $470,700 (married filing jointly; half that amount for married filing separately). If you expect this year’s income to be near the threshold, consider strategies for reducing...

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ESOPs Offer Businesses Tax and Other Benefits

Posted by on Jul 31, 2017 in Blog, General, Management, Tax Tips | Comments Off on ESOPs Offer Businesses Tax and Other Benefits

ESOPs Offer Businesses Tax and Other Benefits

With an employee stock ownership plan (ESOP), employee participants take part ownership of the business through a retirement savings arrangement. With this type of plan the business and its existing owner(s) can benefit from some potential tax breaks, an extra-motivated workforce, and potentially a smoother path for succession planning. How ESOPs work To implement an ESOP, you establish a trust fund and either: Contribute shares of stock or money to buy the stock (an “unleveraged” ESOP), or Borrow funds to initially buy the stock, and then...

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