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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.

Do You Need to File a 2016 Gift Tax Return by April 18?

Posted by on Feb 20, 2017 in Blog, General, Management, Tax Tips | Comments Off on Do You Need to File a 2016 Gift Tax Return by April 18?

Do You Need to File a 2016 Gift Tax Return by April 18?

As part of your estate planning strategy, you may have made significant gifts to your children, grandchildren or other heirs last year. Or perhaps you just wanted to provide loved ones with some helpful financial support. Regardless of the reason for making a gift, it’s important to know under what circumstances you’re required to file a gift tax return. Some transfers require a return even if you don’t owe tax. And sometimes it’s desirable to file a return even if it isn’t required. When filing is required Generally, you’ll need to file a...

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SEPs: A Powerful Retroactive Tax Planning Tool

Posted by on Feb 16, 2017 in Blog, General, Management, Tax Tips | Comments Off on SEPs: A Powerful Retroactive Tax Planning Tool

SEPs: A Powerful Retroactive Tax Planning Tool

Simplified Employee Pensions (SEPs) are sometimes regarded as the “no-brainer” first choice for high-income small-business owners who don’t currently have tax-advantaged retirement plans set up for themselves. Why? A SEP is easy to establish, unlike other types of retirement plans, and a powerful retroactive tax planning tool: The deadline for setting up a SEP is favorable and contribution limits are generous. There are a couple of downsides to SEPs if the business has employees other than the owner: 1) Contributions must be made for all...

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What You Need to Know About the Tax Treatment of ISOs

Posted by on Feb 16, 2017 in Blog, General, Management, Tax Tips | Comments Off on What You Need to Know About the Tax Treatment of ISOs

What You Need to Know About the Tax Treatment of ISOs

Incentive stock options (ISOs) allow you to buy company stock in the future at a fixed price equal to or greater than the stock’s fair market value on the grant date. If the stock appreciates, you can buy shares at a price below what they’re then trading for. However, complex tax rules apply to this type of compensation. Current tax treatment ISOs must comply with many rules but receive tax-favored treatment: You owe no tax when ISOs are granted. You owe no regular income tax when you exercise ISOs, but there could be alternative minimum tax...

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Take Small-Business Tax Credits Where Credits Are Due

Posted by on Feb 13, 2017 in Blog, General, Management, Tax Tips | Comments Off on Take Small-Business Tax Credits Where Credits Are Due

Take Small-Business Tax Credits Where Credits Are Due

Tax credits reduce tax liability dollar-for-dollar, making them particularly valuable. Two available credits are especially for small businesses that provide certain employee benefits. And one of them might not be available after 2017. 1. Small-business health care credit The Affordable Care Act (ACA) offers a credit to certain small employers that provide employees with health coverage. The maximum credit is 50% of group health coverage premiums paid by the employer, provided it contributes at least 50% of the total premium or of a benchmark...

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The “Manufacturers’ Deduction” Isn’t Just for Manufacturers

Posted by on Feb 9, 2017 in Blog, General, Management, Tax Tips | Comments Off on The “Manufacturers’ Deduction” Isn’t Just for Manufacturers

The “Manufacturers’ Deduction” Isn’t Just for Manufacturers

The Section 199 deduction is intended to encourage domestic manufacturing. In fact, it’s often referred to as the “manufacturers’ deduction.” But this potentially valuable tax break can be used by many other types of businesses besides manufacturing companies. Sec. 199 deduction 101 The Sec. 199 deduction, also called the “domestic production activities deduction,” is 9% of the lesser of qualified production activities income or taxable income. The deduction is also limited to 50% of W-2 wages paid by the taxpayer that are allocable to...

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2016 Higher-Education Breaks Can Save Your Family Taxes

Posted by on Feb 6, 2017 in Blog, General, Management, Tax Tips | Comments Off on 2016 Higher-Education Breaks Can Save Your Family Taxes

2016 Higher-Education Breaks Can Save Your Family Taxes

Did you have a college student in your family last year? Were you a student yourself? If so, you may be eligible for some valuable tax breaks on your 2016 return. To max out your higher education breaks, you need to see which ones you’re eligible for and then claim the one(s) that provide the greatest benefit. In most cases you can take only one break per student, and, for some breaks, only one per tax return. Credits vs. deductions Tax credits can be especially valuable because they reduce taxes dollar-for-dollar; deductions reduce only the...

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The Investment Interest Expense Deduction: Less Beneficial Than You Might Think

Posted by on Feb 2, 2017 in Blog, General, Management, Tax Tips | Comments Off on The Investment Interest Expense Deduction: Less Beneficial Than You Might Think

The Investment Interest Expense Deduction: Less Beneficial Than You Might Think

Investment interest — interest on debt used to buy assets held for investment, such as margin debt used to buy securities — is generally deductible for both regular tax and alternative minimum tax (AMT) purposes. But special rules apply that can make this itemized deduction less beneficial than you might think. Limits on the deduction First, you can’t deduct interest you incurred to produce tax-exempt income. For example, if you borrow money to invest in municipal bonds, which are exempt from federal income tax, you can’t deduct the interest....

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Why 2016 May Be an Especially Good Year to Take Bonus Depreciation

Posted by on Jan 30, 2017 in Blog, General, Management, Tax Tips | Comments Off on Why 2016 May Be an Especially Good Year to Take Bonus Depreciation

Why 2016 May Be an Especially Good Year to Take Bonus Depreciation

Bonus depreciation allows businesses to recover the costs of depreciable property more quickly by claiming additional first-year depreciation for qualified assets. The PATH Act, signed into law a little over a year ago, extended 50% bonus depreciation through 2017. Claiming this break is generally beneficial, though in some cases a business could save more tax in the long run if they forgo it. However, 2016 may be an especially good year to take bonus depreciation – something to keep in mind when you’re filing your 2016 tax return....

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Deduction for State and Local Sales Tax Benefits Some, but Not All, Taxpayers

Posted by on Jan 26, 2017 in Blog, General, Management, Tax Tips | Comments Off on Deduction for State and Local Sales Tax Benefits Some, but Not All, Taxpayers

Deduction for State and Local Sales Tax Benefits Some, but Not All, Taxpayers

The break allowing taxpayers to take an itemized deduction for state and local sales taxes in lieu of state and local income taxes was made “permanent” a little over a year ago. This break can be valuable to those residing in states with no or low income taxes or who purchase major items, such as a car or boat. Your 2016 tax return How do you determine whether you can save more by deducting sales tax on your 2016 return? Compare your potential deduction for state and local income tax to your potential deduction for state and local sales tax....

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Can You Defer Taxes On Advance Payments?

Posted by on Jan 23, 2017 in Blog, General, Management, Tax Tips | Comments Off on Can You Defer Taxes On Advance Payments?

Can You Defer Taxes On Advance Payments?

Many businesses receive payment in advance for goods and services. Examples include magazine subscriptions, long-term supply contracts, organization memberships, computer software licenses, and gift cards. Generally, advance payments are included in taxable income in the year they’re received, even if you defer a portion of the income for financial reporting purposes. But there are exceptions that could provide you with some savings when you file your 2016 income tax return. Deferral opportunities The IRS allows limited deferral of income...

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