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Friday, 25 January 2019

Aggregation and maximizing your “pass-through” deduction

Written by Anthony Licavoli

In the simplest form of the “Section 199A” or “pass-through” deduction, owners of pass-through entities reporting $315,000 or less in total taxable income on their 1040s ($157,500 for single filers) can deduct up to 20 percent of their pass-through income from their taxes. Owners who make more may still be able to take a deduction, if they satisfy the law’s tests and limitations. However, those tests and limitations can make life complicated for owners of multiple pass-through businesses who exceed the individual taxable income limits. Thankfully, recent guidance from the IRS allows owners of multiple pass-through entities to aggregate qualifying businesses together for the purposes of calculating the various limitations...

Friday, 25 January 2019

Navigating the various limitations for the “pass-through” tax deduction

Written by Anthony Licavoli

Owners of pass-through entities reporting less than $315,000 in total taxable income on their 1040s ($157,500 for single filers) can generally deduct 20 percent of qualified pass-through income from their taxes with no additional analysis required. Once a taxpayer’s taxable income reaches $315,000 ($157,500 for single filers) certain restrictions and limitations begin to phase-in which could potentially reduce or eliminate the deduction all together. W-2 and qualified property based limitations For qualified business owners subject to the limitations, the pass-through deduction is limited to the greater of: The owner’s share of 50 percent of W-2 wages paid by the employer during the year or The sum of the owner’s share of 25 percent of such W-2 wages plus the owner’s share of 2.5 percent of the unadjusted basis immediately upon acquisition of qualified property W-2 wages generally include all taxable wages paid by the business plus contributions to retirement plans...

Thursday, 24 January 2019

Market Outlook – January 2019

Written by The Rehmann Team

Economy The labor market continues to show its strength, adding 312,000 jobs in December. In addition, prior figures for jobs added in October and November were revised higher (274,000 and 176,000, respectively). The unemployment rate increase (from 3.7 percent to 3...

Wednesday, 23 January 2019

Handle buy-sell agreements with care

Written by Thomson Reuters

If you own an interest in a family-owned or other closely held business, a buy-sell agreement is a valuable document to have in place. These agreements specify whether — and under what circumstances — owners’ interests may be transferred. Buy-sell agreements should be planned and drafted carefully to ensure that they meet your expectations and don’t trigger unwanted tax consequences or conflicts with other owners or family members. Consider the benefits A well-crafted buy-sell agreement provides many benefits, including: Keeping ownership of the business within the family or another select group (for example, people actively involved in the enterprise), Preventing an owner’s former spouse from acquiring a business interest in the event of a divorce, Providing owners and their heirs with liquidity to pay estate taxes and other expenses in the event of death or disability, Establishing the value of the business for gift and estate tax purposes (if certain requirements are met), and Minimizing disputes over ownership succession issues...

The IRS has released final regulations on tax reform’s new qualified business income (QBI) deduction just days before the 2019 tax filing season kicks off. This year’s filing season is slated to begin on January 28. The Code Sec. 199A "passthrough" deduction is considered on Capitol Hill as one of the most complex and controversial provisions of the Tax Cuts and Jobs Act (TCJA)...

Thursday, 17 January 2019

Identity theft and your tax returns: How to protect yourself

Written by Thomson Reuters

Tax returns are a prime target for identity thieves. After all, the IRS processes billions of dollars in tax refunds every year, and criminals follow the money. A thief needs little more than your name and Social Security number (SSN) in order to file a fraudulent tax return and pocket the refund. Then, when you attempt to file your return, the IRS or state tax authority informs you that you’re attempting to file a duplicate return...

Tuesday, 08 January 2019

Risk Report -- January 2019

Written by The Rehmann Team

Identity thieves target small business | A recent IRS bulletin warns small businesses to be on-guard against a growing wave of identity theft and W-2 scams. IRS bulletin IR-2019-243 warns, “Businesses may have their identities stolen and their sensitive information used to open credit card accounts or used to file fraudulent tax returns for bogus refunds. Employers also hold sensitive tax data on employees, such as Form W-2 data, which also is highly valued by identity thieves.” The IRS has already noted an increase in the number of fraudulent Forms 1120, 1120S and 1041 as well as Schedules K-1...

Friday, 21 December 2018

Am I Having Enough Withheld?

Written by Forefield, Inc.

If you fail to estimate your federal income tax withholding properly, it may cost you in a variety of ways. If you receive an income tax refund, it essentially means that you provided the IRS with an interest-free loan during the year. By comparison, if you owe taxes when you file your return, you may have to scramble for cash at tax time — and possibly owe interest and penalties to the IRS as well. When determining the correct withholding amount for your salary or wages, your objective should be to have just enough taxes withheld to prevent you from incurring penalties when your tax return is due...

Friday, 21 December 2018

Choosing a Credit Card

Written by Forefield, Inc.

Like dandelions in a spring lawn, credit card offers pop up everywhere--stuffing your mailbox, flashing on the Internet, even falling from the magazines in your doctor's waiting room. And they all sound so attractive. "0% APR until next year!" "No fee if you transfer a balance now!..

Friday, 21 December 2018

Market Outlook -- December 2018

Written by The Rehmann Team

Economy In his remarks to the Economic Club of New York, Federal Reserve chairmen Jerome Powell reaffirmed evidence of a strong US economy, which growing near 3% annualized, has ran ahead of the Fed’s long-term outlook. He noted the 49-year low in unemployment along with inflations return to the Fed’s 2% target. Despite his acknowledgement that interest rates remain below historical norms, chairmen Powell described current rates as approaching their neutral level. This signals a potential pause of future hikes as rates are approaching a level supportive of growth without allowing for excess risk taking...

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