For years, the family limited partnership (FLP) has been used by affluent individuals as a way to transfer business interests. Now a new Tax Court case gives this valuable estate-planning tool a distinct edge. Background: An FLP resembles other limited partnerships except that the shareholders are generally family members. Typically, one family member serves as…
For some high-income taxpayers, the door to Roth IRA contributions has been slammed shut due to annual limits imposed by the tax law. But an innovative strategy can enable you to contribute to a Roth through “the back door.” Consider this technique as a means of building up your retirement nest egg. Background: With a…
Tax planning for securities is especially tricky this year. Barring any legislative action, tax rates are scheduled to increase in 2013. Nevertheless, if your circumstances dictate it, you may want to preserve a loss from a securities sale in 2012. That means you must pay close attention to the “wash sale” rule as the year…
According to recent reports by the Association of Certified Fraud Examiners (ACFE), an estimated 5% of revenue is lost to fraud and embezzlement every year. Surprisingly, small companies with fewer than 100 employees appear to be more at risk than the corporate heavyweights. The ACFE says that the median loss for businesses with fewer than 100…
For some high-income taxpayers, the door to Roth IRA contributions has been slammed shut due to annual limits imposed by the tax law. But an innovative strategy can enable you to contribute to a Roth through “the back door.” Consider this technique as a means of building up your retirement nest egg. Background: With a…
The IRS recently issued lengthy and complex temporary regulations relating to business repairs and capital improvements. These new regulations cover expenses paid to acquire, produce or improve tangible property. They are generally effective for tax years beginning after 2011. Basic premise: In general, repairs incurred by a business operation are currently deductible, while improvements must…
Do you want to give a large gift to your favorite charity without hurting your cash flow? You do not necessarily have to donate money. For instance, if you hold shares of stock that have appreciated in value, you may decide to give the securities to a nonprofit organization. With some astute tax planning, you…
Typically, a small-business owner can realize tax benefits for travel and entertainment (T&E) expenses incurred during the year. But this remains a prime audit target for IRS examiners, so be careful to observe the letter of the tax law. Keeping that in mind, here is an overview of some of the key tax rules for…
Credit Card Reporting—Initially, the IRS imposed a separate reporting rule for business receipts from merchant credit card and debit cards, and third-party network payments, beginning in 2011. But then it postponed this requirement for 2011 returns, and now it says the rule will be completely eliminated. Thus, a small business will not have to deal…
Now that your 2011 tax return has been wrapped up, or you have at least obtained a filing extension, you can enjoy some “time off” from taxes … right? Wrong. Tax planning is a year-round proposition. The tax moves you make—or don’t make—throughout the year can have a substantial impact on your tax bill. Here…
