Annual Gift Tax Limitations

Sec. 529 plan is tax-free accumulation, so the sooner the account is established and funded, the better. A special provision of Sec. 529 allows those who are concerned with the annual gift tax limitations, currently $15,000, to contribute five years' worth of contributions ($75,000) up front. These limitations apply to each contributor, but if there [...]

2019-03-26T16:22:05+00:00January 23, 2019|Taxtips|0 Comments

Self-Employment Tax

The most beneficial deductions are business deductions that offset both income tax and, depending upon the circumstances, self-employment tax. For 2018, the self-employment tax rate is 12.4% of the first $128,400 of net self-employment income plus 2.9% for the Medicare tax, with no cap. Some high-income taxpayers may pay an additional 0.9% Medicare tax. For [...]

2019-03-27T11:21:56+00:00January 21, 2019|Taxtips|0 Comments

Deductions of IRA and self-employed retirement plan contributions, alimony, and student loan interest

Some deductions, such as IRA and self-employed retirement plan contributions, alimony, and student loan interest, are adjustments to income or what we call above-the-line deductions. These deductions, to the extent permitted by law, provide a dollar deduction for every dollar claimed. Deductions that fall into the itemized category must exceed the standard deduction for your [...]

2019-03-27T11:25:43+00:00January 19, 2019|Taxtips|0 Comments

Maximize Business Expenses

Maximize Business Expenses: Beginning in 2018, business owners are able to write off most business purchases using the very liberal 100% bonus depreciation and the Sec. 179 expensing allowance. The property must be placed in service during the tax year for which the deduction is being claimed. Changing jobs is a part and parcel of [...]

2019-03-27T11:40:18+00:00January 19, 2019|Taxtips|0 Comments

Remember the Annual Gift Tax Exemption

Remember the Annual Gift Tax Exemption: One of the best ways to ultimately reduce your estate taxes and at the same time give to those you love is to take advantage of the annual gift tax exemption. Although the gifts are not tax-deductible, for tax year 2018, you are able to give $15,000 to each [...]

2019-03-27T11:45:29+00:00January 17, 2019|Taxtips|0 Comments

Optimize Health Savings Account Contributions

Optimize Health Savings Account Contributions: Did you become eligible to make contributions to a Health Savings Account this year? If so, then you can make deductible contributions into that account up to its maximum amount, no matter when you became eligible. For 2018, the maximum deduction for self-only coverage is $3,450; for family coverage, it [...]

2019-03-27T11:50:22+00:00January 14, 2019|Taxtips|0 Comments

Make the Most of Higher Education Tax Credits

Make the Most of Higher Education Tax Credits: Both the Lifetime Learning education credit and the American Opportunity Credit allow qualified taxpayers who prepaid tuition bills in 2018 for an academic period that begins by the end of March 2019 to use the prepayments when claiming the 2018 credit. That means that if you are [...]

2019-03-27T12:00:08+00:00January 8, 2019|Taxtips|0 Comments

Avoid the Minimum Required Distribution Penalties

Avoid the Minimum Required Distribution Penalties: Once taxpayers reach the age of 70.5, they are required to take what is known as a “required minimum distribution” from their qualified retirement plan or IRA every year. If this is the first year that this rule applies to you and you haven’t taken your money out yet, [...]

2019-03-27T12:08:34+00:00January 3, 2019|Taxtips|0 Comments