The IRS recently announced various 2024 inflation-adjusted federal tax amounts that affect individual taxpayers. Most of the federal income tax rate bracket thresholds are about 5.4% higher than for 2023. That means that you can generally have about 5.4% more income next year without owing more to the federal government. Standard deduction. Here are the […]
Key 2024 inflation-adjusted tax amounts for individuals Read More »
Do you want to withdraw cash from your closely held corporation at a minimum tax cost? The simplest way is to distribute cash as a dividend. However, a dividend distribution isn’t tax-efficient since it’s taxable to you to the extent of your corporation’s “earnings and profits.” It’s also not deductible by the corporation. Five alternatives.
Making withdrawals from your closely held corporation that aren’t taxed as dividends Read More »
High-income taxpayers face a 3.8% net investment income tax (NIIT) that’s imposed in addition to regular income tax. Fortunately, there are some steps you may be able to take to reduce its impact. The NIIT applies to you only if modified adjusted gross income (MAGI) exceeds: $250,000 for married taxpayers filing jointly and surviving spouses,
Plan ahead for the 3.8% Net Investment Income Tax Read More »
Are you thinking about selling stock shares at a loss to offset gains that you’ve realized during 2020? If so, it’s important not to run afoul of the “wash sale” rule. IRS may disallow the loss. Under this rule, if you sell stock or securities for a loss and buy substantially identical stock or securities
Steer clear of the wash sale rule if you’re selling stock by year end Read More »
Are you wondering if the passive activity loss rules affect business ventures you’re engaged in — or might engage in? If the ventures are passive activities, the passive activity loss rules prevent you from deducting expenses that are generated by them in excess of their income. You can’t deduct the excess expenses (losses) against earned
Understanding the passive activity loss rules Read More »
Wouldn’t it be great if your employees worked as if they owned the company? An employee stock ownership plan (ESOP) could make this a reality. Under an ESOP, employee participants take part ownership of the business through a retirement savings arrangement. Meanwhile, the business and its existing owner(s) can benefit from some tax breaks, an
ESOPs offer businesses a variety of potential benefits Read More »
If you’re the owner of an incorporated business, you probably know that there’s a tax advantage to taking money out of a C corporation as compensation rather than as dividends. The reason is simple. A corporation can deduct the salaries and bonuses that it pays executives, but not its dividend payments. Therefore, if funds are
Determine a reasonable salary for a corporate business owner Read More »
Do you want to withdraw cash from your closely held corporation at a low tax cost? The easiest way is to distribute cash as a dividend. However, a dividend distribution isn’t tax-efficient, since it’s taxable to you to the extent of your corporation’s “earnings and profits.” But it’s not deductible by the corporation. Different approaches.
5 ways to withdraw cash from your corporation while avoiding dividend treatment Read More »
For many businesses, offering employees a 401(k) plan is no longer an option — it’s a competitive necessity. But employees often grow so accustomed to having a 401(k) that they don’t pay much attention to it. It’s in your best interest as a business owner to buck this trend. Keeping your employees engaged with their
Are your employees ignoring their 401(k)s? Read More »
As we approach the end of 2018, it’s a good idea to review the mutual fund holdings in your taxable accounts and take steps to avoid potential tax traps. Here are some tips. Avoid surprise capital gains. Unlike with stocks, you can’t avoid capital gains on mutual funds simply by holding on to the shares.
Mutual funds: Handle with care at year end Read More »
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