Although some have criticized the process, priorities, and policies used in the formulation of this major tax system overhaul, we in the tax and accounting industry anticipated action. After several iterations, we finally got our wish for something—anything—in concrete so that we could get tax plans in place before year end and have answers to the many questions that our clients are asking about what tax reform does to their 2018 tax bill. On December
Continue Reading
Archives for Tax Credits
Tax Reform Highlights – Individual Provisions
Although some have criticized the process, priorities, and policies used in the formulation of this major tax system overhaul, we in the tax and accounting industry anticipated action. After several iterations, we finally got our wish for something—anything—in concrete so that we could get tax plans in place before year end and have answers to the many questions that our clients are asking about what tax reform does to their 2018 tax bill. On December
Continue Reading
Benefits of the R & D Tax Credit for Small Business
The tax deal instituted by Congress at the end of 2015 makes the R & D tax credit permanent. This deal also includes two crucial changes to the R & D tax credit which provide a vital benefit to innovative small businesses, especially startups. Business owners need to examine these changes closely. First, the legislation permits small businesses to take the credit against their AMT (the AMT turnoff). Secondly, the bill permits small businesses to
Continue Reading
2015 Strategic Tax Planning for Businesses
YEAR-END BUSINESS PLANNING As with prior years, business tax planning is unsure due to the expiration of many popular but temporary tax breaks that have been of an “extenders” package of legislation. Another factor leading to uncertainty is the far-reaching Affordable Care Act. Additional changes to the tax law in 2015 made by new regulations and other IRS guidance also need to be weighed when evaluating year-end strategies. Code Sec. 179 Expensing Code Sec. 179
Continue Reading
Research and Development Credits Updates
On 12/19/2014, President Obama signed the H. R. 5771 Bill, known as the Tax Increase Prevention Act. This means that a host of tax credits are being extended to another tax year. Among these is the Research and Development credit. Many small and middle sized businesses do not claim the credit because of the complications in calculating it: The research credit equals the sum of: (1) 20% of the excess (if any) of the qualified
Continue Reading
Latest Updates on the Tax Increase Prevention Act of 2014
On December 16, 2014, Congress passed what is known as an extenders package including more than 50 of the tax credits that expired at the end of 2013. President Obama has signed the Act on December 19, 2014 and it is effective for the 2014 tax year only. Some of the most prominent tax credits are: state and local sales tax deduction, higher education tuition deduction, and the exclusion for discharge of mortgage debt, business and
Continue Reading
Tax Planning 2012 and Beyond
Starting in 2010, tax planning has been exceedingly difficult. The Bush tax cuts were extended till 1/1/2013 – 2011 & 2012 tax years. After 2012, tax rules revert to pre Bush tax cut days. Here is a list of tax cuts expiring: Top marginal income tax rate will increase from 35% to 39.6%, a 4.6% increase. This tax bracket hits taxpayers the following way: Single, Married Joint, Head of Household brackets – Over $388,350; Married
Continue Reading
2011 Year End Tax Planning
This first article is entitles Part I because of uncertainty regarding some key developments that may or may not pass: Obama’s payroll tax cut extension and the Republican counterweight, odds are both are dead in the water and some pieces of it may pass possibly by year end. Longer term tax planning is especially challenging this year because of uncertainty over whether Congress will enact sweeping tax reform that could have a major impact in
Continue Reading
R&D tax credit cases – favorable
Multiple court cases settled in 2009 are likely to affect IRS examinations of prior- and future-year claims. The good news is that the rulings in these cases were favorable to taxpayers and sought to clear up long-standing issues regarding credit qualification and documentation. The following are brief comments about significant rulings:
Continue Reading
R&D Tax Credits – AMT
R&D tax credits can now be used against federal AMT taxes in 2010. Only for 2010 credits, no carryforwards. Less than 50MM in average sales for 3 years Also new 5 year carryback for general business tax credits but they are subject to AMT in prior years.
Continue Reading