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The Tax Deduction Ins and Outs of Donating Artwork to Charity

The Tax Deduction Ins and Outs of Donating Artwork to Charity

If you collect art and are charitably inclined, appreciated artwork can make one of the best charitable gifts from a tax perspective. In general, donating appreciated property is doubly beneficial because you can both enjoy a valuable tax deduction and avoid the capital gains taxes you’d owe if you sold the property. The extra benefit from donating artwork comes from the fact that the top long-term capital gains rate for art and other “collectibles” is 28%, as opposed to 20% for most other appreciated property. Requirements The first thing to keep in mind if you’re considering donating...

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Be Sure Your Employee Travel Expense Reimbursements Pass Muster with the IRS

Be Sure Your Employee Travel Expense Reimbursements Pass Muster with the IRS

If your business reimburses employees’ work-related travel expenses you know it can help you attract and retain employees. If you don’t, you might want to start, because changes under the Tax Cuts and Jobs Act (TCJA) make such reimbursements even more attractive to employees. Travel reimbursements also come with tax benefits, but you must follow a method that passes muster with the IRS. The TCJA’s impact Before the TCJA, unreimbursed work-related travel expenses were generally deductible on an employee’s individual tax return (subject to a 50% limit for meals and entertainment) as a...

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2018 Q4 Tax Calendar: Key Deadlines for Businesses and Other Employers

2018 Q4 Tax Calendar: Key Deadlines for Businesses and Other Employers

Here are some of the key tax-related deadlines affecting businesses and other employers during the fourth quarter of 2018. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. October 15 If a calendar-year C corporation that filed an automatic six-month extension: File a 2017 income tax return (Form 1120) and pay any tax, interest and penalties due. Make contributions for 2017 to certain employer-sponsored retirement plans. October 31 Report income tax withholding and FICA taxes for third quarter 2018 (Form 941) and pay any tax due. (See...

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You Might Save Tax if Your Vacation Home Qualifies as a Rental Property

You Might Save Tax if Your Vacation Home Qualifies as a Rental Property

If you own a vacation home and you both rent it out and use it personally, you might save tax by taking steps to make sure it qualifies as a rental property this year. Vacation home expenses that qualify as rental property expenses aren’t subject to the Tax Cuts and Jobs Act’s (TCJA’s) new limit on the itemized deduction for state and local taxes (SALT) or the lower debt limit for the itemized mortgage interest deduction. Rental or personal property? If you rent out your vacation home for 15 days or more, the expenses you can deduct depend on how the home is classified for tax purposes,...

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How to Reduce the Tax Risk of Using Independent Contractors

How to Reduce the Tax Risk of Using Independent Contractors

Classifying a worker as an independent contractor frees a business from payroll tax liability and allows it to forgo providing overtime pay, unemployment compensation, and other employee benefits. It also frees the business from responsibility for withholding income taxes and the worker’s share of payroll taxes. This is why the federal government views misclassifying a bona fide employee as an independent contractor unfavorably. If the IRS reclassifies an independent contractor as an employee, your business could be hit with back taxes, interest, and penalties. Key factors When assessing...

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Keep it SIMPLE: A Tax-Advantaged Retirement Plan Solution for Small Businesses

Keep it SIMPLE: A Tax-Advantaged Retirement Plan Solution for Small Businesses

If your small business doesn’t a retirement plan for its employees, you may want to consider a SIMPLE IRA. Offering a retirement plan can help you attract and retain employees while providing your business with valuable tax deductions. For a variety of reasons, a SIMPLE IRA can be a particularly appealing option for small businesses. The deadline for setting one up for this year is October 1, 2018. The basics SIMPLE stands for “savings incentive match plan for employees.” These plans are simple to set up and administer. Unlike 401(k) plans, SIMPLE IRAs don’t require annual filings or...

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