Planning Can Save Your Vacation Home Tax Deductions

You can enjoy a vacation home and cut your taxes – with some careful planning and a little discipline. The IRS rules can be complex and potentially restrictive, so a word of caution is in order as you plan the use of your vacation home. Owners of vacation homes often rent out the property when they’re not using it themselves. Renting out your vacation home may or may not make sense for you. The principal variables are the number of days you rent the property, the number of days of personal use, your individual tax situation, and your personal wishes
Read More

Nonprofit Organizations May Have Tax Obligations

If you’re an officer or on the board of a community organization, you may wonder about the tax requirements that apply to your group. Generally, an organization will not owe taxes if two things are true: * It has registered as an exempt nonprofit organization with the IRS, and * It has no business income from activities unrelated to its exempt purpose. Registration is quite straightforward. The IRS grants exempt status to groups organized for charitable or mutual benefit purposes. You must submit your application within the first 15 months of the group’s existence. The package consists of an application
Read More

IRS Refund For Bonds Not Used Yet

If you’re receiving a tax refund this year, the IRS reminds you that you can use it to buy U.S. savings bonds directly from the IRS. Here are the details. * You may purchase up to $5,000 in U.S. Series I savings bonds. * The total amount of bonds you purchase must be a multiple of $50. Any refund over the specified bond purchase amount can be deposited in your bank savings account, or you can request a check by mail. * Bonds will be issued in your name. If you’re married and file a joint return, the bonds will
Read More

Tax Breaks Through Charity Work

If you do volunteer work for a charitable organization and have not kept track of your out-of-pocket expenses, you might be passing up an excellent opportunity to lower your tax bill. To qualify, your unreimbursed expenses must relate directly to the charity, and you must itemize your deductions on your tax return. Here is a brief rundown of some possible deductions. * Volunteers may deduct the cost of phone calls, postage stamps, supplies, and other out-of-pocket costs incurred in their volunteer work. For volunteers who are required to wear a uniform, the cost of buying and cleaning uniforms is deductible
Read More

Hiring Family Can Cut Taxes

During Christmas break and summer vacation, young family members may be looking for a job – and having a hard time finding one. Hire them in your family business, and you get a double benefit: helping the kids gain valuable experience and garnering tax breaks for your company. Here’s what you need to know. Whether your sole proprietorship business operates around the kitchen table or in the fields of your farm, wages you pay your under-age-18 children are not subject to social security, Medicare, or federal unemployment taxes. Note: You’ll have to pay social security and Medicare taxes when your
Read More

Know The Tax Rules For Selling Online

Selling items on eBay and other online auction Web sites has become a very popular way to get rid of unwanted household stuff, as well as a way to turn a little profit. Many users have even started full-time businesses auctioning merchandise on the Web. But like any business venture, selling items in the virtual world has tax implications that are all too real. From a tax standpoint, casual selling on eBay is essentially the same as holding a garage sale. If you sell an item for less than you paid for it, you cannot deduct the loss. When you
Read More

Is A Business Valuation Useful? Absolutely!

For many business owners, a business appraisal or “valuation” can furnish vital planning information and help mitigate risk. Consider the following: * Establishing a verifiable value for your business can show whether assets have appreciated at a reasonable rate. If not, the firm’s strategy may need to be adjusted. * Business valuations furnish documentation to support new financing. Lenders need strong evidence that their loans are properly secured, and a business appraisal can supply that evidence. An independent evaluation of business assets also may encourage lenders to offer favorable interest rates. * If you decide to sell the business, a
Read More

Incorporate or Not To Incorporate – That Is The Question!

One of the first decisions you face as a new business owner is whether or not to incorporate the business. The biggest advantage of incorporating is limitation of your liability. Your responsibility for debts and other liabilities incurred by a corporation is generally limited to the assets of the business. Your personal assets are not usually at risk, although there can be exceptions to this general rule. The trade-off is that there is a cost to incorporate and, in some cases, tax consequences. Should you incorporate? You might not need to incorporate. Depending on the size and type of your
Read More

Who Owes Self Employment Tax?

If you earned $400 or more of net profit during 2013 (as an example) from work as a sole proprietor or independent contractor, you may owe self-employment tax. That’s true no matter what your age – even if you’re receiving social security benefits. The tax is assessed on your net earnings from self-employment, which can include income from qualified joint ventures and partnerships, as well as fees you earn working as a director for a corporation. In this context, “earnings” generally means your income after deducting expenses incurred while operating your business. If you have multiple businesses, you combine the
Read More

Dealing With Death, Disability & Departure in Business

Every business should give serious consideration to how the company would deal with the death, disability, or departure of one of the owners. Like a will, a buy/sell agreement (also known as a business continuity contract) spells out how assets and other business interests will be distributed should an owner quit, become disabled, or die. Without such an agreement, complications arising from ownership succession may capsize an otherwise thriving company. The remaining owners might be forced to share management and profits with unskilled or contentious outsiders. They may be embroiled in legal disputes over business assets and liabilities. A firm’s
Read More

Archives

Categories

Planning Can Save Your Vacation Home Tax Deductions

You can enjoy a vacation home and cut your taxes – with some careful planning and a little discipline. The IRS rules can be complex and potentially restrictive, so a word of caution is in order as you plan the use of your vacation home. Owners of vacation homes often rent out the property when they’re not using it themselves. Renting out your vacation home may or may not make sense for you. The principal variables are the number of days you rent the property, the number of days of personal use, your individual tax situation, and your personal wishes
Read More

Nonprofit Organizations May Have Tax Obligations

If you’re an officer or on the board of a community organization, you may wonder about the tax requirements that apply to your group. Generally, an organization will not owe taxes if two things are true: * It has registered as an exempt nonprofit organization with the IRS, and * It has no business income from activities unrelated to its exempt purpose. Registration is quite straightforward. The IRS grants exempt status to groups organized for charitable or mutual benefit purposes. You must submit your application within the first 15 months of the group’s existence. The package consists of an application
Read More

IRS Refund For Bonds Not Used Yet

If you’re receiving a tax refund this year, the IRS reminds you that you can use it to buy U.S. savings bonds directly from the IRS. Here are the details. * You may purchase up to $5,000 in U.S. Series I savings bonds. * The total amount of bonds you purchase must be a multiple of $50. Any refund over the specified bond purchase amount can be deposited in your bank savings account, or you can request a check by mail. * Bonds will be issued in your name. If you’re married and file a joint return, the bonds will
Read More

Tax Breaks Through Charity Work

If you do volunteer work for a charitable organization and have not kept track of your out-of-pocket expenses, you might be passing up an excellent opportunity to lower your tax bill. To qualify, your unreimbursed expenses must relate directly to the charity, and you must itemize your deductions on your tax return. Here is a brief rundown of some possible deductions. * Volunteers may deduct the cost of phone calls, postage stamps, supplies, and other out-of-pocket costs incurred in their volunteer work. For volunteers who are required to wear a uniform, the cost of buying and cleaning uniforms is deductible
Read More

Hiring Family Can Cut Taxes

During Christmas break and summer vacation, young family members may be looking for a job – and having a hard time finding one. Hire them in your family business, and you get a double benefit: helping the kids gain valuable experience and garnering tax breaks for your company. Here’s what you need to know. Whether your sole proprietorship business operates around the kitchen table or in the fields of your farm, wages you pay your under-age-18 children are not subject to social security, Medicare, or federal unemployment taxes. Note: You’ll have to pay social security and Medicare taxes when your
Read More

Know The Tax Rules For Selling Online

Selling items on eBay and other online auction Web sites has become a very popular way to get rid of unwanted household stuff, as well as a way to turn a little profit. Many users have even started full-time businesses auctioning merchandise on the Web. But like any business venture, selling items in the virtual world has tax implications that are all too real. From a tax standpoint, casual selling on eBay is essentially the same as holding a garage sale. If you sell an item for less than you paid for it, you cannot deduct the loss. When you
Read More

Is A Business Valuation Useful? Absolutely!

For many business owners, a business appraisal or “valuation” can furnish vital planning information and help mitigate risk. Consider the following: * Establishing a verifiable value for your business can show whether assets have appreciated at a reasonable rate. If not, the firm’s strategy may need to be adjusted. * Business valuations furnish documentation to support new financing. Lenders need strong evidence that their loans are properly secured, and a business appraisal can supply that evidence. An independent evaluation of business assets also may encourage lenders to offer favorable interest rates. * If you decide to sell the business, a
Read More

Incorporate or Not To Incorporate – That Is The Question!

One of the first decisions you face as a new business owner is whether or not to incorporate the business. The biggest advantage of incorporating is limitation of your liability. Your responsibility for debts and other liabilities incurred by a corporation is generally limited to the assets of the business. Your personal assets are not usually at risk, although there can be exceptions to this general rule. The trade-off is that there is a cost to incorporate and, in some cases, tax consequences. Should you incorporate? You might not need to incorporate. Depending on the size and type of your
Read More

Who Owes Self Employment Tax?

If you earned $400 or more of net profit during 2013 (as an example) from work as a sole proprietor or independent contractor, you may owe self-employment tax. That’s true no matter what your age – even if you’re receiving social security benefits. The tax is assessed on your net earnings from self-employment, which can include income from qualified joint ventures and partnerships, as well as fees you earn working as a director for a corporation. In this context, “earnings” generally means your income after deducting expenses incurred while operating your business. If you have multiple businesses, you combine the
Read More

Dealing With Death, Disability & Departure in Business

Every business should give serious consideration to how the company would deal with the death, disability, or departure of one of the owners. Like a will, a buy/sell agreement (also known as a business continuity contract) spells out how assets and other business interests will be distributed should an owner quit, become disabled, or die. Without such an agreement, complications arising from ownership succession may capsize an otherwise thriving company. The remaining owners might be forced to share management and profits with unskilled or contentious outsiders. They may be embroiled in legal disputes over business assets and liabilities. A firm’s
Read More

Archives

Categories