As the end of the year is fast approaching, we should consider any last-minute strategies that might help reduce your 2019 tax bill. Last year was the first year to be impacted by the Tax Cuts and Jobs Act of 2017 (TCJA). While there was no significant new legislation in 2019 affecting individual taxes, situations...Read More
As the year draws to a close, it’s time for us to discuss whether there are any last-minute actions we can take to reduce your business-related 2019 tax liability. The actions necessary will depend on the year-end estimate of your business taxable income. Section 179 Expensing and Bonus Depreciation Two of the biggest tax incentives...Read More
UPDATE 12/28/19: For a detailed walkthrough and instructions for completing the new W-4 for 2020, please read this article. In response to the shock of some taxpayers who are still reeling from the amount due with their 2018 tax returns, the IRS has published a draft of the updated Form W-4, which is used to...Read More
Health savings accounts (HSAs) are used in conjunction with high deductible health plans and offer five tax advantages compared to traditional savings accounts: Your own contributions to the HSA are tax-deductible in the current year. Employer contributions to the HSA are excluded from income. Earnings inside the HSA (i.e. interest, dividends, and capital gains) are...Read More
What is tax conformity? Tax conformity is a state’s adoption of the federal definitions of income, as contained in the Internal Revenue Code (IRC). For individuals, it’s the calculation of federal adjusted gross income; for businesses, it’s federal taxable income. Traditionally, Virginia adopts those definitions as of a fixed date — usually, but not always,...Read More
Parents who own businesses have a few tax incentives for hiring their children to work in their business: Shifting income to a lower (or 0%) tax bracket: If you hire your child to work in the business, any wages paid to him/her will be deductible by the business. Suppose that your combined federal and state...Read More
Note: This piece was originally meant to be included in my Year-end business Tax Planning post, but I broke it out separately due to the length and complexity of the subject. One of the biggest changes for 2018 is the new qualified business income deduction. If you are a sole proprietor, a partner in a...Read More
As I’m sure you’re aware, the Tax Cuts and Jobs Act of 2017 (TCJA) was enacted at the end of last year. It’s the largest tax overhaul since the 1986 Tax Reform Act and will affect almost every business in the United States. In light of all the changes that took effect this year, I...Read More
Just as the daylight hours are getting shorter, so is the time for fine-tuning any last-minute strategies to lower your 2018 tax bill. Unlike recent years, in which the tax rules have been fairly stable, 2018 brings extensive changes as a result of a large tax overhaul that passed Congress last December. These changes will...Read More
A potential downside of tax-deferred saving through a traditional retirement plan is that you’ll have to pay taxes when you make withdrawals at retirement. Roth plans, on the other hand, allow tax-free distributions; the tradeoff is that contributions to these plans don’t reduce your current-year taxable income. Unfortunately, your employer might not offer a Roth...Read More