IRS

2016 Tax Planning Guide

 

Our 2016/2017 Tax Planning Guide is now available. The election of a new President in addition to Republicans retaining control of Congress could result in significant changes in tax laws in the upcoming year.  Our online Tax Planning Guide will give you access to updated tax and financial planning information throughout the year as legislative changes are made. Feel free to forward it to friends and family who you think might find it interesting or helpful. We hope this guide will prove to be a convenient resource for you throughout the year.  Just a few of the topics covered in the guide are:

  • Changes to some business and individual tax filing deadlines effective in 2017
  • Tax planning for investments and net investment income tax
  • How […]

Tax Credits for Qualified Plug-In Electric Vehicles

Electric Car GettyImages-530338908 091516Passenger automobiles that are propelled solely or significantly by electric power have been in the news lately, thanks in part to the buzz surrounding the Tesla Model 3, an “economy” model set to be priced at $35,000 and available in late 2017 or early 2018.  Given all the recent media attention, this seemed like a good time to remind you that federal tax credits of up to $7,500 are still available to help offset the purchase price of electric vehicles.  The IRS has devoted a section of its website to explain how the credits work, and provide a list of all the manufacturers and models for which a credit is still available, including the current amount of the credit […]

By |July 15th, 2016|Categories: Individual Tax, IRS|Tags: , , |Comments Off on Tax Credits for Qualified Plug-In Electric Vehicles

Helping S Corporations Avoid Unreasonable Compensation Audits

Since compensation is subject to employment taxes (i.e., primarily Social Security and Medicare taxes) and distributions to shareholders are not, many S corporation owners reduce their compensation and increase their shareholder distributions in an attempt to avoid the employment taxes.   In some cases this is justifiable, and in some it is not.  The IRS is well aware of this issue; in fact, one of the IRS’s hottest audit triggers for S corporations is insufficient compensation paid to employee-shareholders.

The Journal of Accountancy recently published an article that provides nine steps to help S corporations reduce the likelihood of an IRS examination for unreasonable owner compensation.  Read the article here.

 

By |May 17th, 2016|Categories: BCo Community News, Business Operations, Business Tax, IRS|Tags: , , , |Comments Off on Helping S Corporations Avoid Unreasonable Compensation Audits

IRS Increases Interest Rates for First Time Since 2011

Effective as of the 2nd calendar quarter beginning April 1, 2016, the Internal Revenue Service has increased the interest rates by 1% for all non-corporate and corporate taxpayers.

For taxpayers other than corporations (individuals, trusts, etc.), the overpayment and underpayment rates have increased from 3% to 4%.

The corporate underpayment penalty has increased from 2% to 3% and the interest rate on corporate overpayments exceeding $10,000 has increased from 0.5% to 1.5%. The underpayment penalty for large corporations has also increased, from 5% to 6%.

These rate increases are due to the increase in federal short-term rates that took effect February 1, 2016.

California rates will remain unchanged throughout the 2nd quarter (June 30, 2016).

More details regarding the rate increase can be found on the IRS […]

By |May 16th, 2016|Categories: BCo Community News, Business Tax, Individual Tax, IRS, Trusts and Estates|Tags: , , , , |Comments Off on IRS Increases Interest Rates for First Time Since 2011

Maximizing Benefits of §529 Plans

Using a §529 plan to pay for higher education costs can be a great tax savings tool in itself; although contributions are not tax deductible federally or for California, they are deductible in 34 other states. All withdrawals and earnings are tax-free if used to pay for qualified higher education expenses (“QHEE”) for a designated beneficiary. The plans can be transferred to any ‘qualified member’ of the beneficiary’s family (as defined by the IRS in Pub. 970), so the funds do not have to be lost if there is excess after the first beneficiary completes their higher education or decides not to use it at all.

For estate planning purposes, the §529 accounts do not count towards the owner’s gross estate for […]