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Tax

Know the ins and outs of “reasonable compensation” for a corporate business owner

C Corporations, Compensation, Small Business, Tax, Tax Planning /

Owners of incorporated businesses know that there’s a tax advantage to taking money out of a C corporation as compensation rather than as dividends. The reason: A corporation can deduct the salaries and bonuses that it pays executives, but not dividend payments. Thus, if funds are paid as dividends, they’re taxed twice, once to the […]

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How to ensure life insurance isn’t part of your taxable estate

Estate Planning, Estate Tax, Insurance, Life Insurance, Tax /

If you have a life insurance policy, you may want to ensure that the benefits your family will receive after your death won’t be included in your estate. That way, the benefits won’t be subject to federal estate tax. Current exemption amounts. For 2021, the federal estate and gift tax exemption is $11.7 million ($23.4

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Estimated tax payments: The deadline for the first 2021 installment is coming ups

AGI (Adjustable Gross Income), Annualized Income Method, Capital Gains, Income Tax, Tax, Tax Deadlines, Tax Planning /

April 15 is not only the deadline for filing your 2020 tax return, it’s also the deadline for the first quarterly estimated tax payment for 2021 if you’re required to make one. You may have to make estimated tax payments if you receive interest, dividends, alimony, self-employment income, capital gains, prize money, or other income.

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Retiring soon? Recent law changes may have an impact on your retirement savings

Independent Contractors, Retirement, Tax, Tax Planning, The SECURE Act /

If you’re approaching retirement, you probably want to ensure the money you’ve saved in retirement plans lasts as long as possible. If so, be aware that a law was recently enacted that makes significant changes to retirement accounts. The SECURE Act, which was signed into law in late 2019, made a number of changes of

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Did you make donations in 2020? There’s still time to get substantiation

(CARES ACT), 2020 Tax Return, Charitable, Deductions, Income Tax, Individual Income Tax, Internal Revenue Service (IRS), Itemized Deduction, Tax, Tax Deduction, Tax Planning /

If you’re like many Americans, letters from your favorite charities may be appearing in your mailbox acknowledging your 2020 donations. But what happens if you haven’t received such a letter — can you still claim a deduction for the gift on your 2020 income tax return? It depends. What is required. To support a charitable

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2021 individual taxes: Answers to your questions about limits

2020 Tax Return, Charitable, FICA, Income Tax, Itemized Deduction, Social Security, Tax, Tax Deduction, Tax Planning, Tax Savings /

Many people are more concerned about their 2020 tax bills right now than they are about their 2021 tax situations. That’s understandable because your 2020 individual tax return is due to be filed in less than three months (unless you file an extension). However, it’s a good idea to acquaint yourself with tax amounts that

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The right entity choice: Should you convert from a C to an S corporation?

Business Income Tax, C Corporations, Deductions, Employees, Income Tax, S Corporations, Shareholder, Small Business, Tax, Tax Planning /

The best choice of entity can affect your business in several ways, including the amount of your tax bill. In some cases, businesses decide to switch from one entity type to another. Although S corporations can provide substantial tax benefits over C corporations in some circumstances, there are potentially costly tax issues that you should

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The next estimated tax deadline is January 15 if you have to make a payment

(ATI) Adjusted Taxable Income, 2020 Estimated Tax Payment, Business Income Tax, Deductions, Income Tax, Partnerships, S Corporation, Self Employed, Social Security, Tax, Tax Withholding's /

If you’re self-employed and don’t have withholding from paychecks, you probably have to make estimated tax payments. These payments must be sent to the IRS on a quarterly basis. The fourth 2020 estimated tax payment deadline for individuals is Friday, January 15, 2021. Even if you do have some withholding from paychecks or payments you

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The QBI deduction basics and a year-end tax tip that might help you qualify

Limited Liability Company, LLC, Partnerships, Qualified Business Income Deducton (QBI), S Corporation, Small Business, Sole Proprietors, Tax, Tax Deduction, Tax Planning /

If you own a business, you may wonder if you’re eligible to take the qualified business income (QBI) deduction. Sometimes this is referred to as the pass-through deduction or the Section 199A deduction. The QBI deduction: Is available to owners of sole proprietorships, single-member limited liability companies (LLCs), partnerships, and S corporations, as well as

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The importance of S corporation basis and distribution elections

Business Deductions, Business Start Ups, C Corporation, S Corporation, Shareholder, Small Business, Strategic Business Planning, Tax, Tax Deduction, Tax Planning /

S corporations can provide tax advantages over C corporations in the right circumstances. This is true if you expect that the business will incur losses in its early years because shareholders in a C corporation generally get no tax benefit from such losses. Conversely, as an S corporation shareholder, you can deduct your percentage share

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