An education plan can pay off for your employees — and your business

An education plan can pay off for your employees — and your business

Your business can set up an educational assistance plan that can give each eligible employee up to $5,250 in annual federal-income-tax-free and federal-payroll-tax-free benefits. These tax-favored plans are called Section 127 plans after the tax code section that allows them. Plan basics Sec. 127 plans can cover the cost of almost anything that constitutes education, including…

The “wash sale” rule: Don’t let losses circle the drain

The “wash sale” rule: Don’t let losses circle the drain

Stock, mutual fund and ETF prices have bounced around lately. If you make what turns out to be an ill-fated investment in a taxable brokerage firm account, the good news is that you may be able to harvest a tax-saving capital loss by selling the loser security. However, for federal income tax purposes, the wash…

Explore SEP and SIMPLE retirement plans for your small business

Explore SEP and SIMPLE retirement plans for your small business

Suppose you’re thinking about setting up a retirement plan for yourself and your employees. However, you’re concerned about the financial commitment and administrative burdens involved. There are a couple of options to consider. Let’s take a look at a Simplified Employee Pension (SEP) and a Savings Incentive Match Plan for Employees (SIMPLE). SEPs offer easy…

Understanding the “step-up in basis” when inheriting assets

Understanding the “step-up in basis” when inheriting assets

If you inherit assets after a loved one passes away, they often arrive with a valuable — but frequently misunderstood — tax benefit called the step-up in basis. Below is an overview of how the rule works and what planning might need to be done. What “basis” means First, let’s look at a couple definitions. Basis is…

Turn a summer job into tax savings: Hire your child and reap the rewards

Turn a summer job into tax savings: Hire your child and reap the rewards

With summer fast approaching, you might be considering hiring young people at your small business. If your children are also looking to earn some extra money, why not put them on the payroll? This move can help you save on family income and payroll taxes, making it a win-win situation for everyone! Here are three…

What tax documents can you safely shred? And which ones should you keep?

What tax documents can you safely shred? And which ones should you keep?

Once your 2024 tax return is in the hands of the IRS, you may be tempted to clear out file cabinets and delete digital folders. But before reaching for the shredder or delete button, remember that some paperwork still has two important purposes: Keep the return itself — indefinitely Your filed tax returns are the…

Small business alert: Watch out for the 100% penalty

Small business alert: Watch out for the 100% penalty

Some tax sins are much worse than others. An example is failing to pay over federal income and employment taxes that have been withheld from employees’ paychecks. In this situation, the IRS can assess the trust fund recovery penalty, also called the 100% penalty, against any responsible person. It’s called the 100% penalty because the entire…

An essential tax deadline is coming up — and it’s unrelated to your 2024 return filing

An essential tax deadline is coming up — and it’s unrelated to your 2024 return filing

Tuesday, April 15 is the deadline for filing your 2024 tax return. But another tax deadline is coming up the same day, and it’s essential for certain taxpayers. It’s the deadline for making the first quarterly estimated tax payment for 2025 if you’re required to make one. Basic details You may have to make estimated…

Are you a tax-favored real estate professional?

Are you a tax-favored real estate professional?

For federal income tax purposes, the general rule is that rental real estate losses are passive activity losses (PALs). An individual taxpayer can generally deduct PALs only to the extent of passive income from other sources, if any. For example, if you have positive taxable income from other rental properties, that generally counts as passive…

Discover if you qualify for “head of household” tax filing status

Discover if you qualify for “head of household” tax filing status

When we prepare your tax return, we’ll check one of the following filing statuses: single, married filing jointly, married filing separately, head of household or qualifying widow(er). Only some people are eligible to file a return as a head of household. But if you’re one of them, it’s more favorable than filing as a single…