If you own a profitable, unincorporated business with your spouse, you probably find the high self-employment (SE) tax bills burdensome. An unincorporated business in which both spouses are active is typically treated by the IRS as a partnership owned 50/50 by the spouses. (For simplicity, when we refer to “partnerships” we’ll include in our definition [...]
The Tax Cuts and Jobs Act (TCJA) didn’t eliminate the individual alternative minimum tax (AMT). But the law did draw a silver lining around it. Revised rules now lessen the likelihood that many taxpayers will owe substantial taxes under the AMT for 2018 through 2025. PARALLEL UNIVERSE Think of the AMT as a parallel universe [...]
When Congress was debating tax law reform last year, there was talk of repealing the federal estate and gift taxes. As it turned out, rumors of their demise were highly exaggerated. Both still exist and every taxpayer with a high degree of wealth shouldn’t let either take their heirs by surprise. Exclusions and Exemptions For [...]
The passage of the Tax Cuts and Jobs Act late last year had a marked impact on Roth IRAs: to wit, taxpayers who wish to convert a pretax traditional IRA into a post-tax Roth IRA can no longer “re-characterize” (that is, reverse) the conversion for 2018 and later years. The IRS recently clarified in FAQs [...]
For some people, Roth IRAs can offer income and estate tax benefits that are preferable to those offered by traditional IRAs. However, it’s important to take note of just what the distinctive features of Roth IRA are before making the choice. Traditional vs. Roth The biggest difference between traditional and Roth IRAs is how taxes [...]
As a business owner, you may have most of your money tied up in your company – making saving for retirement especially challenging. If you haven’t already set up a tax-advantaged retirement plan, think about setting one up this year. Keep in mind that, if you have employees, they generally must be allowed to participate [...]