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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 the PATH Act extended through 2016 was the...

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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 “material participation” tests to avoid passive...

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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 is below the federal income tax return filing...

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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 their rate. If you’re eligible, this could save...

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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 your taxable income and staying out of the top...

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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 contribute cash to the plan to enable it to repay...

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