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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.

A “Back Door” Roth IRA Can Benefit Higher-Income Taxpayers

Posted by on May 30, 2017 in Blog, General, Management, Tax Tips | Comments Off on A “Back Door” Roth IRA Can Benefit Higher-Income Taxpayers

A “Back Door” Roth IRA Can Benefit Higher-Income Taxpayers

One of the potential downsides to tax-deferred saving through a traditional retirement plan is that you’ll have to pay taxes when you make withdrawals at retirement. Roth plans, on the other hand, allow tax-free distributions; the tradeoff is that contributions to these plans don’t reduce your current-year’s taxable income. Unfortunately, your employer might not offer a Roth 401(k) or another Roth option, and modified adjusted gross income (MAGI)-based phaseouts may reduce or eliminate your ability to contribute to a Roth IRA. Fortunately,...

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Business Owners: When It Comes to IRS Audits, Be Prepared

Posted by on May 25, 2017 in Blog, General, Management, Tax Tips | Comments Off on Business Owners: When It Comes to IRS Audits, Be Prepared

Business Owners: When It Comes to IRS Audits, Be Prepared

If you filed your 2016 income tax return in April, rather than filing for an extension, you may be wondering if it’s likely your business could be audited by the IRS based on your filing. Here’s what every business owner should know about the auditing process. Catching the IRS’s eye Many business audits occur randomly, but a variety of tax-return-related items are likely to raise red flags with the IRS and may lead to an audit. Here are a few examples: Significant inconsistencies between previous years’ filings and your most current filing,...

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Real Estate Investor vs. Professional: Why It Matters

Posted by on May 18, 2017 in Blog, General, Management, Tax Tips | Comments Off on Real Estate Investor vs. Professional: Why It Matters

Real Estate Investor vs. Professional: Why It Matters

Income and losses from investment real estate or rental property are passive by definition — unless you’re a real estate professional. Why does this matter? Passive income may be subject to the 3.8% net investment income tax (NIIT), and passive losses generally are deductible only against passive income, with the excess being carried forward. Of course the NIIT is part of the Affordable Care Act (ACA) and might be eliminated under ACA repeal and replace legislation or tax reform legislation. But if or when such legislation will be passed and...

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Want to Help Your Child (or Grandchild) Buy a Home? Don’t Wait!

Posted by on May 11, 2017 in Blog, General, Management, Tax Tips | Comments Off on Want to Help Your Child (or Grandchild) Buy a Home? Don’t Wait!

Want to Help Your Child (or Grandchild) Buy a Home? Don’t Wait!

Mortgage interest rates are still at low levels, but are likely to increase as the Fed continues to raise rates. So if you’ve been thinking about helping your child — or grandchild — buy a home, consider acting soon. There also are some favorable tax factors that will help: 0% capital gains rate. If the child is in the 10% or 15% income tax bracket, instead of giving cash to help fund a down payment, consider giving long-term appreciated assets such as stock or mutual fund shares. The child can sell the assets without incurring any federal...

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Operating Across State Lines Presents Tax Risks — or Possibly Rewards

Posted by on May 11, 2017 in Blog, General, Management, Tax Tips | Comments Off on Operating Across State Lines Presents Tax Risks — or Possibly Rewards

Operating Across State Lines Presents Tax Risks — or Possibly Rewards

With the ease and popularity of e-commerce, as well as the incredible efficiency of many supply chains, all sorts of companies are finding it easier than ever to widen their markets. Doing so has become so much more feasible that many businesses quickly find themselves crossing state lines. But there lies a risk in doing this: Operating in another state means possibly being subject to taxation in that state. The resulting liability can, in some cases, inhibit profitability. But sometimes it can produce tax savings. Do you have “nexus”?...

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Choosing Between a Calendar Tax Year and a Fiscal Tax Year

Posted by on May 4, 2017 in Blog, General, Management, Tax Tips | Comments Off on Choosing Between a Calendar Tax Year and a Fiscal Tax Year

Choosing Between a Calendar Tax Year and a Fiscal Tax Year

Many business owners use a calendar year as their company’s tax year. It’s intuitive and aligns with most owners’ personal returns, making it about as simple as anything involving taxes can be. But for some businesses, choosing a fiscal tax year can make more sense. What’s a fiscal tax year? A fiscal tax year consists of 12 consecutive months that don’t begin on January 1 or end on December 31 — for example, July 1 through June 30 of the following year. The year doesn’t necessarily need to end on the last day of a month. It might end on the...

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Now’s a Great Time to Purge Old Tax Records

Posted by on May 1, 2017 in Blog, General, Management, Tax Tips | Comments Off on Now’s a Great Time to Purge Old Tax Records

Now’s a Great Time to Purge Old Tax Records

Whether you filed your 2016 tax return by the April 18 deadline or you filed for an extension, you may be overwhelmed by the amount of documentation involved. While you need to hold on to all of your 2016 tax records for now, it’s a great time to take a look at your records for previous tax years to see what you can purge. Consider the statute of limitations At minimum, keep tax records for as long as the IRS has the ability to audit your return or assess additional taxes, which generally is three years after you file your return. This means...

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Do You Know the Tax Implications of Your C Corp.’s Buy-Sell Agreement?

Posted by on Apr 27, 2017 in Blog, General, Management, Tax Tips | Comments Off on Do You Know the Tax Implications of Your C Corp.’s Buy-Sell Agreement?

Do You Know the Tax Implications of Your C Corp.’s Buy-Sell Agreement?

Private companies with more than one owner should have a buy-sell agreement to spell out how ownership shares will change hands should an owner depart. For businesses structured as C corporations, the agreements also have significant tax implications that are important to understand. Buy-sell basics A buy-sell agreement sets up the parameters for transferring ownership interests following stated “triggering events,” such as an owner’s death or long-term disability, loss of license or other legal incapacitation, retirement, bankruptcy, or...

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Individual Tax Calendar: Key Deadlines for the Remainder of 2017

Posted by on Apr 24, 2017 in Blog, General, Management, Tax Tips | Comments Off on Individual Tax Calendar: Key Deadlines for the Remainder of 2017

Individual Tax Calendar: Key Deadlines for the Remainder of 2017

While April 15 (April 18 this year) is the main tax deadline on most individual taxpayers’ minds, there are other deadlines throughout the rest of the year that are important to be aware of. To help you make sure you don’t miss any important 2017 deadlines, here’s a look at when some key tax-related forms, payments and other actions are due. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply specifically to you. Please review the calendar and let us know if you have any questions about the...

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Bartering May Be Cash-Free, But It’s Not Tax-Free

Posted by on Apr 20, 2017 in Blog, General, Management, Tax Tips | Comments Off on Bartering May Be Cash-Free, But It’s Not Tax-Free

Bartering May Be Cash-Free, But It’s Not Tax-Free

Bartering might seem like something that happened only in ancient times, but the it’s still common today. The general definition of bartering remains the same: the exchange of goods and services without the exchange of money. Because no cash changes hands in a typical barter transaction, it’s easy to forget about taxes. But, as one might expect, you can’t cut Uncle Sam out of the deal. A taxing transaction The IRS generally treats a barter exchange similarly to a transaction involving cash. You must report the fair market value of the...

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