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Recently Published
Alerts
- Congressional Inaction Creates Estate Planning Mess
- NAIC Adopts Temporary Changes to SSAP 10
- Surviving the Upturn... Be "The Other"
Articles
- Excess Capacity - Tax Advantage or Disadvantage?
- The Federal Government to the Rescue: Five-Year NOL Carryback
- Review Your Capital Assets for Possible Impairments
Business Surveys
- Survey of Chicago Area Business Leaders, September 2009
- Survey of Advisors to Family-Owned Businesses
- Survey of Chicago Area Business Leaders, February 2009
Construction Edge
- Managing Indirect Costs Calls for a Keen Eye ... and a Plan
- An Escalation Clause Can Help Curtail Materials Cost Woes
- Four Ways Dishonest Employees Can Steal Your Money
Insurance Edge
- Risk-Focused Exams for Reinsurance: What's Going On?
- SSAP 43R-Revised Loan-Backed and Structured Securities
- Insurance SAS 70: A Move Toward Action in Governance
Legal Talent
- Varying Rates for Contract Attorneys: Caveat Emptor!
- Top 10 Reasons to Hire Temporary Help in a Down Economy
- Five Organizational Tips for Staffing a Document Review Project
Manufacturing Edge
- Excess Capacity - Tax Advantage or Disadvantage?
- The Federal Government to the Rescue: Five-Year NOL Carryback
- Review Your Capital Assets for Possible Impairments
Not-for-Profit Edge
- Effective Dashboards for Not-for-Profit Boards
- Nonprofits Need Innovative Thinking to Survive the “New Normal”
- Online Donation Portals Ease Contributions, Receipt Process
Tax Highlights
Beneficiary of a Foreign Trust? You Have Reporting Requirements!
In recent months, the Internal Revenue Service has continued to increase its scrutiny of offshore accounts and entities, as evidenced by the government’s recent high-profile cases against UBS, and over 15,000 US residents admitting to hiding money in foreign bank...
read moreIRS Changes Mind on Home-Mortgage Interest Limitations
OverviewIndividual taxpayers who itemize deductions can claim a deduction for interest paid on a home mortgage. The law allows a taxpayer to deduct mortgage interest on up to $1 million of “acquisition indebtedness” (i.e., debts used to purchase, construct or...
read moreROTH IRA Conversions in 2010 - Advantages and Disadvantages
Starting on the first day of 2010 there was a major change relating to Roth IRAs. In past years if taxpayers had over $100,000 in modified adjusted gross income (AGI), they could NOT convert (roll over) other retirement plans into...
read moreNew York Tax Law Updates
Mandatory New-Hire ProceduresBeginning October 26, 2009, employers are required to notify all new employees in writing of their rate of pay, regular payday and overtime rate (if applicable). In addition, the law requires the employer to obtain written acknowledgment from...
read moreContributions for Haiti Earthquake Relief
Recently passed legislation allows taxpayers who itemize deductions to accelerate the benefit for qualified contributions to charities providing disaster relief in Haiti. Cash contributions made for Haiti earthquake relief after January 11, 2010 and before March 1, 2010 may be...
read more20 Factor Common Law Test for Employee Classification
The courts have put together a series of questions based on the common law principles to determine a worker's classification. The courts have noted that no one factor is determinative, and simply having more than half of the factors doesn’t...
read moreEmployee vs. Independent Contractor - Brief Review of the Rules
Classifying a worker as an employee versus an independent contractors is not always clear. This classification will impact the amount of tax that you pay as well as affect the additional costs a business may incur (most of these costs...
read moreNew Net Operating Loss Rules Benefit Larger Business - First Time Homebuyer Credit Extended and Expanded
On November 6, President Obama signed the “Worker, Homeownership, and Business Assistance Act of 2009.” The bill, expected to cost about $24 billion, was originally intended to extend unemployment benefits. While that provision is still part of the bill, the bill is receiving...
read moreA Closer Look at Target Employee Groups for the Work Opportunity Tax Credit
This article is a follow-up to our July 2009 Tax Highlights discussion of Overlooked Business tax credits and briefly describes the target group of potential employees that could generate tax credits for your business. Congress has identified 12 different categories of potential...
read morePrivate Foundation Tax Planning Update
As year-end approaches, it is a good time to evaluate your Foundation’s position with regard to the Section 4940 excise tax on investment income. The Section 4940 tax is typically applied at a rate of 2% of investment income. Investment income includes dividends, interest,...
read moreAre You Leaving Money On The Table?
Your company might be eligible for reimbursement of up to 50% of employee training costs, if it meets the eligibility requirements set by the Illinois Department of Commerce and Economic Opportunity.During the current economic climate with record breaking unemployment numbers,...
read moreBeware: IRS to Conduct 6,000 Audits of Employee/ Independent Contractor Classifications
Starting in February 2010 IRS officials will start random audits of approximately 6,000 US employers for employment tax compliance and proper worker classification. These random audits are intended to help close the estimated $15 billion "tax gap" that the GAO...
read moreIRS Waives RMD for 2009 and Allows Rollover of 2009 RMDs Already Distributed
A required minimum distribution (RMD) is the smallest annual amount that must be withdrawn from an IRA or an employer’s retirement plan each year after reaching a required minimum age. Generally, this occurs when the account owner reaches age 70½. (There...
read moreResidential Energy Credits Extended
Home ImprovementsThe Emergency Economic Stabilization Act of 2008 (the 2008 Act) and The American Recovery and Reinvestment Act of 2009 (the 2009 Act) extend and modify the lifetime nonrefundable credit for qualifying home improvements, which expired for expenditures after December...
read moreShould You Be Paying Your Taxes Electronically?
The economic downturn has hurt state governments as much as taxpayers. With states in need of money, it’s no surprise that the number of states requiring electronic payment of taxes for both businesses and individuals is on the rise. Electronic...
read moreService Providers Beware: You Could Have Nexus in California Without Having Physical Presence
California’s 2009–2010 budget, which was signed by Governor Arnold Schwarzenegger on February 20, 2009, contains significant changes to California tax law. These changes could impact companies with sales to California customers even if the companies do not have a physical...
read moreOne Overlooked Business Tax Credit—The Work Opportunity Tax Credit!
In today’s economy, the concept of “squeezing every dollar” has become a necessity. Businesses are looking for ways to cut expenses so that they are not only competitive, but also to keep the doors open. Looking at the federal government...
read moreThe Economy Is Down—Bring Your Tax Bill Down With It
These stressful economic times might offer a few short-, mid- and long-term tax planning strategies that will help alleviate your tax bill. Losses are never a good thing. However, when it comes to your business, you might be able to...
read moreAre IRA or Section 529 Plan Losses Deductible?
If your IRA or Section 529 plan has decreased in value you may be wondering if you can deduct your losses. In most cases there is no deduction for losses within an IRA or Section 529 plan. However, it may...
read moreCalifornia Now Processing a Portion of Pre-2007 LLC Fees
What is the California LLC fee?California imposes a fee of up to $11,790 on LLCs that are organized in California, are registered with the Secretary of State to transact business in California or are doing business in California. This fee...
read moreSolar Energy Can Lower Your Taxes!
We’ve all heard of the concept “going green” to save on energy costs. This catchphrase has raised an important issue and has changed our lives in one way or another. Most of us understand the environmental impact, or lack thereof,...
read moreIRS Proposes Change to Tax Treatment of Employer-Provided Cell Phones
As cellular telephone technology continues to evolve, many employers and employees are finding the tax substantiation requirements for employee-provided cell phones increasingly cumbersome. Recently, the IRS issued Notice 2009-46, which aims to change the substantiation requirements for employee-provided cell phones....
read moreNew and Improved First-Time Homebuyers Credit—Take Advantage If You Can!
The stimulus bill that recently passed contained a very nice incentive for first-time homebuyers. The definition of a "first-time homebuyer" is someone who at the date of purchase has not owned a residence for the prior three years. The new...
read moreNew S Corporation Open-Account Regulations Require Careful Taxpayer Planning
The IRS has just imposed a $25,000 per-shareholder threshold limit on open-account debt for S corporations. Unless S corporations properly plan and document shareholder advances to the company, the new regulations will mean more administrative work and different tax results.How...
read moreLife Insurance Proceeds From Business-Owned Policies Might Not Be Tax-Free—New Rules Apply to Policies Issued After August 16, 2006
It is often important for a business to own insurance that will provide funds to help replace a "key person" who dies unexpectedly. In other instances, a business may obtain a policy to provide funds to purchase an equity interest...
read moreFederal Tax Break For New Car, Motorcycle or Motorhome Purchases
As part of the stimulus act passed earlier this year, there is a new 2009 tax deduction for new cars, motorcycles or motorhomes purchased after February 16, 2009 and before January 1, 2010. The intent was to assist those respective...
read moreNew IRS Payroll Regulations for Disregarded Entities
Recently, the IRS decreed that single member limited liability companies and qualified subchapter S subsidiaries were "disregarded entities" for income tax purposes. This seemed to offer the best of both worlds—some limited liability for legal purposes and, hopefully, ignored for...
read moreDrop in Mileage Rate for 2009
The standard mileage rate for business travel dropped to 55 cents for 2009. This is a 3.5 cent decrease from 2008. This change will have tax consequences for both employers and employees if the mileage allowance continues to be reimbursed...
read moreForeign Withholding Information Reporting
The Internal Revenue Service recently announced that it is sharpening its focus on the responsibility of U.S. taxpayers to report payments and withhold federal income tax from payments to foreign persons. Income Subject to WithholdingEffectively Connected Income—Effectively connected income (ECI)...
read moreReceive Significant Federal and Illinois Tax Credits for Helping Low-Income Communities
Would you like to receive significant federal and Illinois tax credits totaling up to 78% of your investment and get a return on that investment while helping low-income communities? Sound too good to be true? This actually can be accomplished...
read morePossible Tax Deduction for Subnormal Inventory Goods
In January 2009, we discussed the lower of cost or market method of valuing inventory. The rapid decline of many basic commodity prices could provide a tax deduction in 2008 for calendar year taxpayers who have inventory on hand at...
read moreStimulus Act Provides Substantial Tax Breaks for Businesses and Individuals
On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act of 2009 (ARRA). While approximately two-thirds of the nearly $800 billion stimulus act is focused on government spending initiatives intended to create jobs and jumpstart...
read moreCome Clean with Illinois Use Tax!
The Illinois Department of Revenue (IDOR) has initiated an aggressive approach to collect unreported use tax. Taxpayers who IDOR believes have unreported use tax are being contacted and allowed to "voluntarily report" their past due use tax liability within 60...
read moreStrict New Rules Regarding Disclosure and/or Use of Tax Information by Tax Return Preparers
The IRS has issued new rules regarding the disclosure and/or use of tax information by tax return preparers. These new rules apply to disclosures and/or use of tax information after December 31, 2008. The rules are designed to protect confidential...
read moreInventory Valuation—Lower of Cost or Market Could Be Beneficial for 2008
In the current dreary economic climate, many businesses are realizing that the market value of their inventory is lower, sometimes significantly lower, than what the business paid to produce or acquire that inventory. Also, most commodity prices declined drastically in...
read moreMandatory Illinois Nonresident Withholding Begins with 2008 Tax Filings
Effective for taxable year ending on or after December 31, 2008, new withholding requirements apply to all pass-through entities with Illinois business income.Who is required to withhold?All pass-through entities that have Illinois income for a taxable year allocable to a...
read moreSave on Taxes: Convert Your Private Foundation to a Donor-Advised Fund
A Donor-Advised Fund (DAF) is one solution for an individual who established a private foundation, but has been overburdened by administrative costs and tasks. In Blackman Kallick's experience, private foundations with less than $2 million of assets can sometimes achieve...
read moreHealth Insurance for S Corporation Shareholder Employees
An S corporation (S corp) paying a health insurance premium on behalf of a 2% shareholder employee is a common fringe benefit. Most of us understand the economic effect of this arrangement, but what about the tax implications? What rules...
read moreNew Year, New Chicago Tax Rates
With the projected budget deficit, the city of Chicago is once again raising some of its taxes. We frequently find that taxpayers are unaware about the myriad of local taxes that apply to businesses located in Cook County and Chicago....
read moreNew Diesel-Fueled Car Credit
In response to high gas prices and a renewed interest in environmental causes by the American public, Congress has added many provisions to the tax code to encourage taxpayers to conserve. The Energy Policy Act of 2005 introduced an alternative...
read moreDoes the Ohio CAT Have You in Its Claws?
What is the Ohio CAT?Enacted on July 1, 2005, the Ohio Commercial Activity Tax (CAT) is an annual privilege tax measured by gross receipts from business activities in Ohio. If you have customers in Ohio, read the CAT rules carefully...
read moreIRS Rules on Substantiation of Noncash Charitable Contributions
The recent proposed regulations for substantiation and reporting of charitable contributions implement the changes created by the American Jobs Creation Act of 2004 and the Pension Protection Act of 2006 (PPA).There are many changes created by the American Jobs Creation...
read moreDeceptive Notices Try to Obtain Your Hard-Earned Dollars
Criminals and fraudsters sometimes take advantage of tough economic times by increasing their efforts to defraud a vulnerable public as well as struggling hard-working business people. During our current struggling economy, be alert for solicitations for personal and financial information—even...
read more501(c)(3) Not-for-Profit Organizations—Act Now to Potentially Save Money on Unemployment Taxes
As we struggle through this economic downturn, unemployment inevitably begins to rise. And as unemployment rates rise, so do unemployment compensation claims. Those benefits are paid through unemployment insurance tax premiums. As the number of benefit payouts increases, employers have...
read moreMy Bank Became Insolvent, What Are the Tax Implications for Nonbusiness Funds?
In the recent volatile economic climate, many taxpayers are finding that their financial institutions are at risk of becoming insolvent. Most nonbusiness bad debts may only be reported as a short-term capital loss on Schedule D when the amounts are...
read moreIRS Allows High-Low Per Diem Method as Substantiation of Travel and Meal Expenses
Employees who travel for business are often reimbursed by their employer for ordinary and necessary business expenses such as lodging, meals and incidental expenses. If paid as part of an "accountable plan," as defined by Section 62(a)(2)(A), said reimbursements do...
read moreGuidance Issued on New Required Information Reporting in Maryland—Potential Penalties of $10,000 per Day for Noncompliance
Maryland's new information reporting requirement adds a significant burden to C corporations filing in Maryland. We believe the legislature plans to use the information gathered to estimate the change in revenue if certain changes to the tax law are made....
read moreIRS to Automatically Assess Penalties for Late-Filed Forms 5471
Form 5471 is utilized by certain U.S. persons (including U.S. businesses) and U.S. residents who are officers, directors or shareholders in certain foreign corporations. Form 5471 is an information form and is generally required to be sent in with the...
read moreWisconsin Software Refund Opportunity
On July 11, 2008, the Wisconsin Supreme Court made a landmark decision in the case of the Wisconsin Department of Revenue v. Menasha Corporation. Menasha purchased SAP R/3 System software and sales tax was collected on the purchase price. This...
read moreDon't Forget to Have All New Employees Complete Form I-9
The "Employment Eligibility Form," also known as "Form I-9," is one of the most common forms that employers are required to complete. This form requires all employers to verify that each employee hired after November 6, 1986, is authorized to...
read moreOhio Appellate Court Holds Commercial Activity Tax (CAT) on Food Products to be Unconstitutional
In a judgment rendered on September 2, 2008, by the Court of Appeals of Ohio in Ohio Grocers Association et al. v. William W. Wilkins in His Official Capacity as Ohio Tax Commissioner (Ohio), the Ohio CAT was held unconstitutional...
read moreMandatory E-Filing Required of Certain Heavy Highway Vehicle Use Tax Returns
The government just issued a news release, IR 2008-94, requiring taxpayers with 25 or more trucks, tractors or other heavy vehicles, as defined below, to file the Heavy Highway Vehicle Use Tax return electronically. Keep reading for further details.Type of...
read moreHow Can an IC-DISC Save on Taxes When Doing Business Abroad?
One way to tap into foreign markets without going overseas could be through the use of an interest charge domestic international sales company (IC-DISC).Before you start doing business in a foreign country, it pays to understand that nation’s tax laws. American...
read moreCalifornia Appellate Court Holds LLC Fee Unconstitutional
In a judgment filed on August 11, 2008 by the California Court of Appeal (the Court) in Ventas Finance, LLC (Ventas) v. California Franchise Tax Board (FTB), the Limited Liability Company (LLC) gross receipts fees were held unconstitutional. The Court...
read moreNew Housing Act Contains Several Changes Affecting Both Individuals and Businesses
The Housing and Economic Recovery Act of 2008 (the Housing Act) is designed primarily to help troubled borrowers and their lenders, including Fannie Mae and Freddie Mac. However, it also contains changes, incentives and tax breaks for certain homebuyers, homeowners,...
read more"Kiddie Tax" Expanded to Include Junior in College for 2008
Congress passed an increase in the tax rate for children (aka "kiddie tax") over 20 years ago to prevent parents from sheltering income in accounts under the names of their lower-tax-rate children. The original law stated that certain investment income...
read moreDue Date for Partnership and Fiduciary Income Tax Returns to Change Next Year?
The IRS issued proposed regulations that announced a change in the extended due date for certain business returns to help individuals better meet their filing deadlines. Currently, partnership and fiduciary income tax returns are due on April 15 and are...
read moreAutos—Recycle, Reuse and Donate?
Do you have an old car that is offering very little in trade-in value or that you are looking to get rid of without the hassle of selling? You could receive tax savings by donating to charity.In order to obtain...
read morePrivate Trust Companies
Historically, high net worth families hire professional trustees to ensure that their wealth is transferred appropriately to the beneficiaries of their trusts. However, these families also have concerns regarding this method. Changes from the original trustee/trust holder agreement can take...
read moreTrusts, Investment Advisory Fees and the Supreme Court Knight Decision
Because of the enormous responsibilities that come with acting as a trustee, many trustees utilize the services of a professional investment advisor to manage trust assets. The involvement of investment advisors has resulted in the question of whether or nor...
read moreForeign Investment in U.S. Real Property
This article provides U.S. tax information for individuals who are U.S. nonresidents who are not U.S. citizens. The assumption has been made that there will be none or very limited personal use of the U.S.-based real estate. This article also...
read moreGot Sales and Use Tax Issues?
Sales and use tax is a significant revenue source for state governments. Historically, sales and use tax has accounted for close to half of all state tax revenue. Sales tax has been imposed on the purchase of tangible personal property...
read moreIRS Increases Standard Mileage Rates Beginning July 1, 2008
The Internal Revenue Service announced on June 23, 2008 that the optional standard mileage rates will be increased on July 1, 2008. The IRS has made these adjustments in response to the increase in gasoline prices.The rate will increase to...
read moreIllinois Offers 5% Sales Tax Credit on Production-Related Tangible Personal Property
On January 11, 2008, the state of Illinois enacted Public Act 095-0707 (the Act), which has temporarily expanded the sales tax exemption for manufacturing machinery and equipment to include production-related tangible personal property (property purchased on July 1, 2007 through...
read moreSave $$ by Going Green With Your Building
Under prior law, the cost of energy-saving investments generally had to be capitalized and depreciated. Now, Section 179D provides a deduction for energy-efficient commercial buildings through December 31, 2013. A deduction of up to $1.80 per square foot is allowed...
read moreYour Child is Going to College—Are You Ready?
While attending grammar and high school, your children are continually preparing for the challenges of postsecondary education. Although the transition from high school to college can be difficult, your children are generally well-equipped and ready to tackle the challenges that...
read moreIt's Finally Summer, Watch Out for Those "Phish"!
The Internet has become an integral business tool over the last 10 years. It’s rare to find a person who does not have at least one e-mail address. While e-mail has made communication more efficient in some respects, spam (i.e.,...
read moreEmployee or Independent Contractor? Being Wrong Could Mean Stiff Penalties
The recent congressional testimony of Blackwater, a private military contractor receiving federal contracts, brings to light the controversy of classifying a worker either as an employee or independent contractor. Also, the recent $319 million IRS assessment against FedEx, for just...
read moreCook County Sales Tax Increase
If you are collecting and remitting Cook County sales tax, please note that the Cook County sales tax rate is increasing by 1% on July 1, 2008. Please remember to reprogram your cash registers and accounting systems.For more information, please...
read moreDeduction for Student Loan Interest
A deduction toward adjusted gross income (AGI) is allowed for interest paid on a higher education student loan for the taxpayer, taxpayer’s spouse or any dependent of the taxpayer as of the date the indebtedness was incurred. The deduction is...
read moreHybrid Cars Save on Gas—and Taxes
With the increase in gas prices, hybrid cars are becoming more popular, especially with the added bonus of an income tax credit.How does the hybrid car tax credit work?A credit of up to $3,000 is available, depending on the vehicle's...
read moreUsing Propane Forklifts? Get a Tax Credit
A 50¢ per gallon refundable income tax credit can be claimed for alternative fuel, including propane sold for use or used as fuel in a motor vehicle, including forklifts.What must you do to claim this credit?Register as an alternative fueler...
read moreEnergy-efficient Homebuilders: Come and Get Your Credits
Eligible contractors can qualify for a credit of $2,000 for new energy-efficient homes built and sold before Jan. 1, 2009.What are the requirements for the credit?To qualify for the $2,000 credit, the new home must:Be located in the U.S. and...
read moreInterest Charge-Domestic International Sales Corporations (IC-DISCs) Offer up to 20% Tax Savings on Exports
The IC-DISC has been around since 1984 and has yet to be challenged by the World Trade Organization (WTO), unlike other exporting incentives. With the current low dividend rates the IC-DISC is now more attractive tax-savings vehicle. Though several bills...
read moreEmployee Stock Option Plans (ESOPs) Offer Tax and Economic Benefits
Most people think of the United Airlines bankruptcy when they think of ESOPs. That's unfortunate, because ESOPs provide company ownership and employees with both tax and economic advantages. Most importantly, an ESOP does not have to control the company to...
read moreTexas 2-Step: Hello Margin Tax
On May 18, 2006, Texas Governor Rick Perry signed House Bill 3 into law, establishing the new Texas margin tax superseding the state's old franchise tax. This tax is effective for 2007 returns that are filed in 2008.Which businesses must...
read moreU.S. 'Persons' Required to Report Foreign Financial Accounts by June 30
Every United States person with a financial interest or signature authority over any financial account in a foreign country must report that relationship when the aggregate value exceeds $10,000 at any time during the tax year. This may include accounts...
read moreHas Your Mutual Insurance Company Gone Public? You Could Get a Tax Refund on Stock Gains
Mutual life insurance companies are owned solely by their policyholders, who have similar rights—other than the ability to sell the stock—to stockholders in a publicly traded company. Since the mid-1990s, many mutual insurance companies have been undergoing demutualization, a process...
read moreChicago Increases Real Estate Transfer Tax
Chicago has increased to 1.05% its tax on real property transfers. This tax is imposed on the transfer of title to, or beneficial interest in, real property located in Chicago, and applies whether or not the transfer resulted in a...
read moreTax Strategies for Providing Employee Health Coverage
Health insurance can be one of the biggest employee benefits a business provides—and one that employees most expect of their employer. Today, with health insurance costs rising more than 10% a year, employers are looking for health plans that offer...
read moreCollege Costs Are Rising Faster than Gas Prices: Is There Help?
As the price of higher education continues to rise, many parents are looking for tax benefits to help reduce the cost. Some options available for you or your college-age children include:Deduction for Qualified Tuition and Related ExpensesUsing U.S. Savings Bond...
read moreDeduction Allowed for Qualified Tuition and Related Expenses
A tax deduction toward adjusted gross income (AGI) is allowed for qualified tuition and related expenses paid during the taxable year, limited to:$4,000, if your AGI does not exceed $65,000 ($130,000 for a joint return);$2,000, if your AGI is between...
read moreUsing U.S. Savings Bond Interest to Pay Educational Expenses
Qualified U.S. savings bond interest used to pay higher-education tuition and fees during the taxable year are not includible in gross income to the extent that the aggregate redemption proceeds from the bonds redeemed during the year do not exceed...
read moreHope Credit up to $1,800 Applies to First Two Years of College
Under the Hope Credit, a tax credit is allowed for qualified expenses paid for the first two years of post-secondary education. For tax year 2008, taxpayers can claim up to $1,800 of credit (up from $1,650 in 2007). The credit...
read moreLifetime Learning Credit up to $2,000 Applies to All Years of Post-Secondary Education
The Lifetime Learning Credit is another option to consider when you pay qualified education expenses for post-secondary education. This credit is equal to 20% of the first $10,000 paid each year for qualified education expenses. Unlike the Hope Credit, the...
read moreCoverdell Education Savings Accounts Invest After-tax Dollars
Coverdell Education Savings Accounts are tax-exempt trusts. Contributions are made using after-tax dollars, similar to a Roth IRA, and are not deductible at the time of contribution. A tax benefit is created when there are qualified distributions from the account,...
read moreSection 529 Qualified Tuition Programs: A Savings Opportunity for High-Income Taxpayers
Section 529 of the Internal Revenue Code provides rules for the income tax treatment of qualified tuition programs sponsored by a state or by a private college or university.Which two types of tuition programs qualify under Section 529?Prepaid tuition programs—A...
read moreLow Interest Rates Provide Opportunity for Gifting
The low interest rate environment provides an opportunity to transfer assets to children and other beneficiaries at little or no gift-tax cost. Although there are several strategies for gifting, two of the most effective transfer techniques involve the use of...
read moreMore on Electronic Form 990-N
On February 13, 2008, the Internal Revenue Service released the electronic Form 990-N (e-Postcard). Pursuant to a provision of the Pension Protection Act of 2006, tax-exempt organizations with annual gross receipts of $25,000 or less, that were previously exempt from...
read moreDraft of IRS Form 990 Instructions Released
On April 7, 2008, the Internal Revenue Service published a draft of the 2008 IRS Form 990 instructions. The IRS will be accepting comments and suggestions on the draft until June 1, 2008, and expects to revise and finalize the...
read moreHealth Insurance Wage Reporting Requirements for S Corporation Shareholder/Employee
A greater than 2% shareholder/employee in an S corporation is entitled to an above-the-line deduction for accident and health insurance premiums that are paid or reimbursed by the S corporation and included in the shareholder/employee's income.To be eligible for this...
read moreBeware, Expanded Wash Sale Rules Look Through to Owners' IRA Stock Sales
The IRS has prohibited a technique used to avoid the wash sale rules. The wash sale rules prevent the recognition of a loss where substantially identical stock or securities are bought within a 61-day period surrounding the sale of a...
read moreSubstantiation of Charitable Contributions Required Before Filing 2007 Tax Returns
The Pension Protection Act of 2006 has elevated the substantiation requirements for charitable contributions. IRC Section 170(a) allows for a deduction of charitable contributions, but new code Section 170(f)(17) states that no deduction is allowed under Section 170(a) for any...
read moreCash Advances Might Not Be Taxable on Receipt When in Exchange for Volume Purchase Commitments for Accrual Basis Taxpayers
Businesses sometime enter into agreements with vendors who grant exclusive supplier status for a period of years. This is a common practice for many restaurants and retailers. In return, the vendor usually advances a payment that might be contingent on...
read moreNew Revenue Procedure Allows for Earlier Accrual of Payroll Taxes
The IRS had argued that payroll taxes were deductible when the related compensation was paid. Consequently, year-end wages and bonuses that were fixed and determinable at year-end, could be deductible when accrued but the related payroll taxes were deductible in...
read moreDomestic Production Deduction Doubles In 2007
The domestic production deduction for income from qualifying activities has doubled to 6% for 2007. Many of our clients have activities that change from year to year, especially costs related to producing certain products. As a reminder, qualifying activities generally...
read moreZero Percent Capital Gains Tax Rate in 2008 to 2010 for Certain Taxpayers
The capital gains/qualified dividend tax rate drops to zero for those taxpayers who are in the 10% or 15% tax bracket in any year from 2008 to 2010. While many of our clients will not qualify for the 0% capital...
read moreThe Michigan Business Tax: How It Will Affect Your Company
On July 12, 2007, Michigan Governor Jennifer Granholm signed Senate Bill 94 into law, which establishes a new Michigan Business Tax (MBT) that supersedes the Michigan Single Business Tax (SBT) that was scheduled to expire on December 31, 2007. The...
read moreIncreased Depreciation Deductions Available for 2008
With the passing of the Economic Stimulus Act of 2008, taxpayers have the opportunity for increased depreciation deductions. Taxpayers have two ways to maximize this deduction. First, Section 179 limits have been raised to $250,000, which is double the amount...
read moreDon't Forget About the Research and Development Credit
We've noticed that many of our clients might be entitled to a research and development credit for certain activities. The credit might also be available for software development in certain circumstances.Read more information about the R&D credit.For more information, contact...
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