Posts Categorized: Tax

7 Last-Minute Moves To Save On Your Taxes For 2021

The American Rescue Plan’s expanded child tax credit was made fully refundable in 2021, and it was increased up to $3,600 per child through age five and up to $3,000 per child aged 6 to 17. Dependents who are 18 can qualify for $500 each. Dependents aged 19 to 24 may also be eligible, but they must be enrolled in college full-time. 

Eligible families automatically received half of the payments in advance monthly between July and December 2021 unless they opted out. When eligible parents file their taxes in 2022, they’ll get the remainder of the benefit they didn’t receive through advance monthly payments. If you did not receive the advance payments because you opted out or didn’t receive them for some other reason, you could claim the full credit when you file in April. READ MORE

When a Gift May Not Be a Gift

The federal tax code has particular rules about how much you are allowed to transfer to others each year – and throughout your lifetime – in the form of a gift. Any gifts above that amount may be subject to gift tax, paid by the giver. However, not every gift is subject to the gift tax. Annual exclusion amounts, a lifetime exemption amount, and other exclusions, such as education or medical exclusions, relieve a giver of paying federal gift taxes.

Because the lifetime exemption amount is very generous at this time, many people will not owe taxes on their gifts. However, high net worth individuals should be mindful of how gifting can affect the estate tax that may be due upon their death. READ MORE

With Tax Laws in Flux: What Should Business Owners Do Now?

If you read last week’s blog titled, “House Democrats Propose Sweeping New Changes To Tax Laws That Stand To Have Major Impact On Business Taxation and Estate Planning—Part 1” or if you’ve been following the news about the coming changes, you know that none of us know what will ultimately happen – or even when we will know the final outcome.

Given that the 2017 Tax Cuts and Jobs Act was not passed until December 2017, and the same thing could happen here, with some provisions potentially impacting your taxes this year, as well as provisions that could impact decisions you’d make for next year, but those decisions must be made now, what should you do? READ MORE

With Tax Laws in Flux: What Should You Do Now?

Last week in our blog titled “House Democrats Propose Sweeping New Changes to Tax Laws That Stand To Have Major Impact on Estate Planning – Part 1,” we discussed the new bill’s proposed changes to tax rates and estate planning vehicles, including several different types of trusts.

Here, in part two, we’ll focus on what you should do now, given that the tax law is in flux and we may not have clear answers until close to the end of the year. READ MORE

House Democrats Propose Sweeping New Changes To Tax Laws That Stand To Have Major Impact On Business Taxation and Estate Planning – Part 1

On September 13, 2021, Democrats in the House of Representatives released a new $3.5 trillion proposed spending plan that includes a wide array of changes to federal tax laws. Specifically, the Democrats have proposed a number of significant tax increases and other changes to fund the plan, including increases to personal income tax rates and READ MORE

House Democrats Propose Sweeping New Changes To Tax Laws That Stand To Have Major Impact On Estate Planning – Part 1

On September 13, 2021, Democrats in the House of Representatives released a new $3.5 trillion proposed spending plan that includes a wide array of changes to federal tax laws. Specifically, the Democrats have proposed a number of significant tax increases and other changes to fund the plan, including increases to personal income tax rates and the capital gains tax rate, along with a major reduction to the federal estate and gift tax exclusion and new restrictions on Grantor Trusts that would basically eliminate such trust’s ability to be used as planning vehicles.

While the proposed legislation is still under consideration and far from being finalized, given the broad-reaching impact these changes stand to have, we strongly encourage you to take action now if you would be affected by the proposed legislation if it does pass. With the exception of capital gains rate increase, which could go into effect on transactions that occur on or after Sept. 13, 2021, most of the proposed changes would be effective after December 31, 2021, meaning that you have time to plan now.

That said, due to the time it takes to plan and execute some of the financial and estate planning actions we’d need to support you with, we suggest you start strategizing now. That way, you’ll have plenty of time to take the appropriate action before the end of the year. With that in mind, here we’ll outline how the proposed tax law changes stand to affect your financial, tax, and estate planning, so you can contact us if you would be impacted if the new bill does pass. READ MORE

Legendary Rapper DMX Dies With No Will, Millions in Debt, and 15 Children – Part 2

As we reported last week in part one, Legendary hip hop artist DMX born Earl Simmons passed away on April 9 at age 50 after suffering a massive heart attack a week earlier at his home in White Plains, New York. The heart attack was reportedly triggered by a cocaine overdose on April 2, which left the rapper hospitalized in a coma. After a week of lingering in a vegetative state, his family made the decision to remove him from life support.

Although DMX was wildly successful in both music and movies, the rap icon experienced serious legal and financial problems, along with frequent issues with drug addiction throughout his career. Having fathered 15 children with nine different women, DMX’s money issues largely stemmed from unpaid child support, but he also failed to pay income taxes, and both of these issues would land the rapper in prison and rehab on more than one occasion.

The saddest part of this whole situation is that virtually all of the conflict, expense, and trauma that DMX’s loved ones are likely to endure could have been easily prevented with straightforward estate planning. Using revocable living trusts, for example, DMX could have ensured that his children and fiancée would have immediate access to his assets upon his death or incapacity, avoiding the need for court involvement altogether and keeping the contents and terms of his estate totally private. READ MORE

4 Factors To Consider When Choosing a Business Entity – Part 2

When starting a business, you have to make a ton of different decisions. From deciding what to name your company to hire employees, getting your business off the ground comes with a nearly endless number of decisions.

Last week in part one, we discussed the first two of four leading factors to consider when selecting your entity, and here, we cover the final two.

Properly selecting, setting up, and maintaining your business entity is far too important of a task for you to try to handle all on your own. We offer you trusted advice on the most advantageous entity for your particular business and then help ensure that your entity is properly set up. We can also provide you with sound business systems to make your business more efficient and establish a clear separation between your business and personal finances, which is a crucial part of maintaining your entity’s liability protection. READ MORE

Benefits of Having Your Business Donate to Charity

Giving money to charity might seem counterintuitive to those running a for-profit company. However, it is important to keep in mind that charitable giving can not only make a big difference to the recipients of your generosity, but it can also provide a net gain to your business. In addition to the potential tax advantages of charitable giving, donations have been shown to boost employee morale and productivity, improve a company’s brand image, and build customer relationships. READ MORE

What You Need to Know about Hiring Seasonal Employees

A lot has changed since last summer, but the same federal and state laws still apply to employers that hire seasonal employees. If your business is considering bringing on summer help to handle an increased workload, you may need a refresher on navigating benefits, taxes, overtime, pay, and employment of teenage workers. READ MORE

How to Maximize Your Startup Cost Deductions

Coming up with a solid concept for a new business and working to get your operation off the ground can be an expensive undertaking. But the good news is that you can write off a number of the expenses involved with the startup process. READ MORE

Simultaneous Deaths: What If My Spouse and I Die at the Same Time?

The chances of a married couple dying in a common accident or within a very short time of one another are probably quite slim. However, it does happen. And it happens frequently enough that most states have laws to address the issue and the problems that can arise from simultaneous deaths. What are these laws, why do we need them, and can we work around them if we need to? READ MORE

Questions & Answers On COVID-19 Tax Changes for 2020—Part 2

Last week in part one, we answered questions about tax changes offered by the Paycheck Protection Program (PPP) and the Employee Retention Tax Credit (ERTC). Here in part two, we’ll wrap up this series by answering questions about the Economic Injury Disaster Loan (EIDL) and four additional tax breaks offered by the CARES Act that could save your business even more on your 2020 taxes. READ MORE