COMPARING TAXABLE VERSUS TAX-EXEMPT INVESTMENT YIELDS With rising tax rates, some taxpayers are considering allocating at least a portion of their investments to tax-exempt investments. After all, interest earned on tax-exempt investments not only escapes ordinary income tax rates that can be as high as 39.6%, but also the 3.8% net investment income tax (NIIT). [...]
LEASING PROPERTY TO A CLOSELY-HELD CORPORATION Shareholders of closely-held C corporations routinely lease real estate, equipment, and other property to their corporate entity. These leases can be held directly by the shareholder or through a separate entity, such as a partnership, LLC, or S corporation. Of course, the corporation could directly purchase the item or [...]
DOUBLE BENEFIT FROM A TAX DEDUCTION For most taxpayers, the amount of federal income tax they pay depends on where they fall in the federal income tax brackets and the breakdown of their taxable income between ordinary (e.g. wages) and capital gains from the sale of assets (e.g., common stock). Taxpayers eligible for the lower [...]
DO YOU NEED TO ADJUST YOU FEDERAL INCOME TAX WITHHOLDING AMOUNT? With over half the year already gone, now is a good time to check to see if you are on track to have about the right amount of federal income tax withheld from your paychecks for 2014. The problem with not having the correct [...]
MID-YEAR TAX PLANNING IDEAS Tax planning is a year-round process, so now is a good time to think about the following- Are you considering making a cash gift to a relative? If so, consider making the gift in conjunction with the overall revamping of your stocks and mutual funds held in taxable brokerage accounts to [...]
EXPENSES QUALIFYING FOR THE CHILD CARE CREDIT Working parents can find summer child care solutions challenging. However, a nonrefundable credit is available if the qualifying child care expense is incurred so that you (and your spouse, if married) can work. The maximum credit is 20%-35% (depending on your adjusted gross income) of the lesser of [...]