Rss Feed Tweeter button Facebook button

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.

Few Changes to Retirement Plan Contribution Limits for 2017

Posted by on Jan 2, 2017 in Blog, General, Management, Tax Tips | Comments Off on Few Changes to Retirement Plan Contribution Limits for 2017

Few Changes to Retirement Plan Contribution Limits for 2017

Retirement plan contribution limits are indexed for inflation, but with inflation remaining low most of the limits remain unchanged for 2017. The only limit that has increased from the 2016 level is for contributions to defined contribution plans, which has gone up by $1,000. Type of limit 2017 limit Elective deferrals to 401(k), 403(b), 457(b)(2) and 457(c)(1) plans $18,000 Contributions to defined contribution plans $54,000 Contributions to SIMPLEs $12,500 Contributions to IRAs $5,500 Catch-up contributions to 401(k), 403(b), 457(b)(2) and...

read more

Want to Save for Education? Make 2016 ESA Contributions by December 31

Posted by on Dec 29, 2016 in Blog, General, Management, Tax Tips | Comments Off on Want to Save for Education? Make 2016 ESA Contributions by December 31

Want to Save for Education? Make 2016 ESA Contributions by December 31

There are many ways to save for your child’s or grandchild’s education. But one has annual contribution limits, and if you don’t make a 2016 contribution by December 31, the opportunity will be lost forever. We’re talking about Coverdell Education Savings Accounts (ESAs). How ESAs work With an ESA, you contribute money now that the beneficiary can use later to pay qualified education expenses: Although contributions aren’t deductible, plan assets can grow tax-deferred, and distributions used for qualified education expenses are tax-free. You...

read more

Take Stock of Your Inventory Accounting Method’s Impact on Your Tax Bill

Posted by on Dec 26, 2016 in Blog, General, Management, Tax Tips | Comments Off on Take Stock of Your Inventory Accounting Method’s Impact on Your Tax Bill

Take Stock of Your Inventory Accounting Method’s Impact on Your Tax Bill

If your business involves the production, purchase or sale of merchandise, your inventory accounting method can have a significant impact on your tax liability. In some cases, using the last-in, first-out (LIFO) inventory accounting method, rather than first-in, first-out (FIFO), can reduce taxable income and give your cash flow a boost. However, tax savings aren’t the only factor to consider. FIFO vs. LIFO FIFO assumes that merchandise is sold in the order it was acquired or produced. So the cost of goods sold is based on older — and often...

read more

Ensure Your Year-End Donations Will Be Deductible on Your 2016 Return

Posted by on Dec 22, 2016 in Blog, General, Management, Tax Tips | Comments Off on Ensure Your Year-End Donations Will Be Deductible on Your 2016 Return

Ensure Your Year-End Donations Will Be Deductible on Your 2016 Return

Donations to qualified charities are generally fully deductible, and they may be the easiest deductible expense to time to your tax advantage. After all, you control exactly when and how much you give. To ensure your donations will be deductible on your 2016 return, you must make them by year end to qualified charities. When’s the delivery date? In order for a donation to be deductible on your 2016 return, it must be made by Dec. 31, 2016. According to the IRS, a donation generally is “made” at the time of its “unconditional delivery.” But...

read more

Why Making Annual Exclusion Gifts Before Year End Can Still Be a Good Idea

Posted by on Dec 19, 2016 in Blog, General, Management, Tax Tips | Comments Off on Why Making Annual Exclusion Gifts Before Year End Can Still Be a Good Idea

Why Making Annual Exclusion Gifts Before Year End Can Still Be a Good Idea

A tried-and-true estate planning strategy is to make tax-free gifts to loved ones while you’re still alive, because it reduces potential estate tax at death. There are several ways to make tax-free gifts, but one of the simplest is to take advantage of the annual gift tax exclusion with direct gifts. Even in a potentially changing estate tax environment, making annual exclusion gifts before year end can still be a good idea. What is the annual exclusion? The 2016 gift tax annual exclusion allows you to give up to $14,000 per recipient...

read more

Workers Age 50 and Up: Boost Retirement Savings Before Year End with Catch-up Contributions

Posted by on Dec 12, 2016 in Blog, General, Management, Tax Tips | Comments Off on Workers Age 50 and Up: Boost Retirement Savings Before Year End with Catch-up Contributions

Workers Age 50 and Up: Boost Retirement Savings Before Year End with Catch-up Contributions

Whether you didn’t save as much for retirement as you would have wished earlier in your career or you’d like to make the most of tax-advantaged savings opportunities, if you’ll be age 50 or older on December 31, consider making “catch-up” contributions to your employer-sponsored retirement plan by that date. These are additional contributions beyond the regular annual limits that can be made to certain retirement accounts. 401(k)s and SIMPLEs Under 2016 401(k) limits, if you’re age 50 or older, after you’ve reached the $18,000 maximum limit...

read more

Can You Pay Bonuses in 2017 But Deduct Them This Year?

Posted by on Dec 8, 2016 in Blog, General, Management, Tax Tips | Comments Off on Can You Pay Bonuses in 2017 But Deduct Them This Year?

Can You Pay Bonuses in 2017 But Deduct Them This Year?

You may be aware of the rule that allows businesses to deduct bonuses employees have earned during a tax year if the bonuses are paid within 2½ months after the end of that year (by March 15 for a calendar-year company). But this favorable tax treatment isn’t always available. For one thing, only accrual-basis taxpayers can take advantage of the 2½ month rule — cash-basis taxpayers must deduct bonuses in the year they’re paid, regardless of when they’re earned. However, even for accrual-basis taxpayers, the 2½ month rule isn’t automatic. The...

read more

There’s Still Time to Benefit on Your 2016 Tax Bill by Buying Business Assets

Posted by on Dec 5, 2016 in Blog, General, Management, Tax Tips | Comments Off on There’s Still Time to Benefit on Your 2016 Tax Bill by Buying Business Assets

There’s Still Time to Benefit on Your 2016 Tax Bill by Buying Business Assets

In order to take advantage of two important depreciation tax breaks for business assets, you must place the assets in service by the end of the tax year. So you still have time to act for 2016. Section 179 deduction The Sec. 179 deduction is valuable because it allows businesses to deduct as depreciation up to 100% of the cost of qualifying assets in year 1 instead of depreciating the cost over a number of years. Sec. 179 can be used for fixed assets, such as equipment, software and leasehold improvements. Air conditioning and heating units...

read more

Year-End Tax Strategies for Accrual-Basis Taxpayers

Posted by on Dec 1, 2016 in Blog, General, Management, Tax Tips | Comments Off on Year-End Tax Strategies for Accrual-Basis Taxpayers

Year-End Tax Strategies for Accrual-Basis Taxpayers

The last month of the year offers accrual-basis taxpayers an opportunity to make some timely moves that might enable them to save money on their 2016 tax bill. Record and recognize The key to saving tax as an accrual-basis taxpayer is to properly record and recognize expenses that were incurred this year but won’t be paid until 2017. This enables you to deduct those expenses on your 2016 federal tax return. Common examples of these expenses include: Commissions, salaries and wages, Payroll taxes, Advertising, Interest, Utilities, Insurance,...

read more

Accelerating Your Property Tax Deduction To Reduce Your 2016 Tax Bill

Posted by on Nov 28, 2016 in Blog, General, Management, Tax Tips | Comments Off on Accelerating Your Property Tax Deduction To Reduce Your 2016 Tax Bill

Accelerating Your Property Tax Deduction To Reduce Your 2016 Tax Bill

Smart timing of deductible expenses can reduce your tax liability, but poor timing can unnecessarily increase it. When you don’t expect to be subject to the alternative minimum tax (AMT) in the current year, accelerating deductible expenses into the current year typically is a good idea because it will defer tax, which usually is beneficial. One deductible expense you may be able to control is your property tax payment. You can prepay (by December 31) property taxes that relate to 2016 but that are due in 2017, and deduct the payment on your...

read more