Category Archives: Federal Income Taxes
What you need to know about the tax treatment of ISOs
Incentive stock options 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… Read More »
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… Read More »
Help prevent tax identity theft by filing early
If you’re like many Americans, you might not start thinking about filing your tax return until close to this year’s April 18 deadline. You might even want to file for an extension so you don’t have to send your return to the IRS until October 16. But there’s another date you should keep in mind: January 23. That’s… Read More »
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),… Read More »
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 during life, because it reduces potential estate tax at death. There are many 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… Read More »
A brief overview of the President-elect’s tax plan for individuals
Now that Donald Trump has been elected President of the United States and Republicans have retained control of both chambers of Congress, an overhaul of the U.S. tax code next year is likely. President-elect Trump’s tax reform plan, released earlier this year, includes the following changes that would affect individuals: Reducing the number of… Read More »
A quick look at the President-elect’s tax plan for businesses
The election of Donald Trump as President of the United States could result in major tax law changes in 2017. Proposed changes spelled out in Trump’s tax reform plan released earlier this year that would affect businesses include: Reducing the top corporate income tax rate from 35% to 15%, Abolishing the corporate alternative minimum… Read More »
It’s critical to be aware of the tax rules surrounding your NQDC plan
Nonqualified deferred compensation (NQDC) plans pay executives at some time in the future for services to be currently performed. They differ from qualified plans, such as 401(k)s, in that: NQDC plans can favor certain highly compensated employees, Although the executive’s tax liability on the deferred income also may be deferred, the employer can’t deduct… Read More »
Beware of income-based limits on itemized deductions and personal exemptions
Many tax breaks are reduced or eliminated for higher-income taxpayers. Two of particular note are the itemized deduction reduction and the personal exemption phaseout. Income thresholds If your adjusted gross income (AGI) exceeds the applicable threshold, most of your itemized deductions will be reduced by 3% of the AGI amount that exceeds the threshold… Read More »
Are you timing business income and expenses to your tax advantage?
Typically, it’s better to defer tax. One way is through controlling when your business recognizes income and incurs deductible expenses. Here are two timing strategies that can help businesses do this: Defer income to next year. If your business uses the cash method of accounting, you can defer billing for your products or services. Or,… Read More »