Medicare and Health Savings Accounts – A Bad Mix

Michele Lazzara, Partner in the firm's Private Client Services group, discusses the importance of knowing the rules and enrollment deadlines for Medicare, especially if you have an HSA plan - this is because contributions to an HSA plan are disallowed when you are covered under any health plan that is not a high deductible.  READ MORE +

Revising Estate Plans for the Right Reasons

Chris Wright, Estates and Trusts Partner, points out that while there are potential upcoming legislative changes that will reduce clients' lifetime estate tax exemption, it should not be the sole reason they revise their estate plans.  READ MORE +

Good News-Bad News: Is the New York Entity Tax Election Worthwhile?

Jennifer Prendamano, Director in the firm's Tax Advisory Services group, highlights the potential disadvantages of the New York State Pass-Through Entity Tax that taxpayers should be aware of, before deciding to elect in.  READ MORE +

Complexity, Collaboration and Candid Communications: A Recipe for the Family Office Dream Team

The family office "dream team" is made up of legal, accounting and investment advisors who all work together on a client's behalf. The need for this team to work collaboratively with the family office administrators and family members is crucial, especially when it comes to educating the family on the obligations and use of the family's wealth in order to mitigate dysfunction.  READ MORE +

Advisors and Family Office Members Work Best While Working Together

High-Net-Worth Partner, Pamela Mosiello notes consistent communication is proven to be one of the most effective tools when it comes to family office members and advisors working together. This blog highlights two key examples of this, which leads to clarity in decision-making and timely filings and more.  READ MORE +

Practical Tax Planning Advice to Start the Year

Michael Friedman, Senior Manager, shares practical tax planning guidance for individuals.  READ MORE +

SALT Outlook: What to Expect Post-COVID-19

SALT Partner Jay Brower discusses what changes businesses and individuals should be on the lookout for as states look to collect revenue and offset COVID-19 related losses.  READ MORE +

It’s Time to End the Blacklisting of SSTBs from Section 199A

Tax policy changes, such as the Section 199A provision, would help remove barriers for small businesses operating during the COVID-19 crisis.  READ MORE +

Thinking about Converting to Roth IRA? Now May Be the Time.

If you’ve thought about converting your traditional IRA into a Roth IRA – now may be the time. Why? Well, with the current downturn in the stock market due to COVID-19, and low tax rates, the conversion is less costly for investors right now.  READ MORE +

Cryptocurrency Investors: What Do You Do When the IRS Sends you a Tax Compliance Letter?

On July 26, 2019, the IRS issued a news release stating that they have begun sending letters to taxpayers with cryptocurrency transactions who may have failed to report income and pay taxes on these transactions.  READ MORE +

Service Professionals Don’t Always Lose Out on the 199A Deduction

In this blog post, Marks Paneth professional Eduard Suleymanov will answer several questions pertaining to who is eligible for the new Section 199A deduction and how that deduction can be maximized.  READ MORE +

Family Office Governance: a Multi-Generational Affair

In this blog, Partner Sara Rabi highlights the importance of multi-generational family office governance and shares her observations from a recent family office conference.  READ MORE +

Common Scams to Avoid During Tax Season - Part 2

Partner Michael Siino examines another three fraudulent schemes - phishing scams, identity theft and fake charities - that taxpayers should be especially wary of as the filing deadline approaches.  READ MORE +

Three Common Scams to Avoid During Tax Season

With the persistent threat of tax scams looming, Real Estate Partner Michael Siino identifies three common pitfalls to avoid at this time of year.  READ MORE +

The Certainty of Uncertainty

The market corrections in November and December of last year signaled an uneasiness on the part of investors who were looking past a still fundamentally happy, bubbling economy and toward a future state that is rife with uncertainty.  READ MORE +

Business Owners: Don’t Pay Yourself a Bonus this Year

With the tax reform act passed last year, many businesses owners who run their businesses as pass-through entities, such as S Corporations and partnerships, will benefit from the new Sec. 199A business income deduction. This deduction will allow qualifying taxpayers to benefit from a 20% reduction in the federal tax rate on their net ordinary business income from their respective flow-through entity.  READ MORE +

Projections are In: Will Taxpayers in High-Tax States Really Lose Out under the New Tax Law?

With half of the year already behind us, many taxpayers are looking ahead to their 2018 taxes and wondering how their tax situations will change under the new tax law. Marks Paneth partner Kurt Kiess explains why the outlook for taxpayers in high-tax states might not be as bad as originally predicted.  READ MORE +

Understanding the New Tax Code: Changes to the Federal Estate Tax

Principal Robert Hughes addresses one of the most common questions coming out of the new federal tax reform bill: “Should I continue to itemize my deductions?”  READ MORE +

Don’t overlook securities laws when planning your estate

Certain exemptions under the federal securities laws require that investors in private funds and other unregistered securities qualify as “accredited investors” or “qualified purchasers.” If your trusts or family investment vehicles include these interests, structure the entities appropriately to make sure they qualify.  READ MORE +

Home-related tax breaks are valuable on 2017 returns, will be less so for 2018

Homeowners who are eligible for certain tax breaks in 2017 may find these home-related tax benefits not as valuable when they file their 2018 returns. Read more about the new provisions affecting homeowners, such as property tax deductions, mortgage interest, home equity loans and home office expenses.  READ MORE +

Casualty losses can provide a 2017 deduction, but rules tighten for 2018

If you suffered damage to your home or personal property last year, you may be able to deduct these “casualty” losses on your 2017 federal income tax return. A casualty is a sudden, unexpected or unusual event, such as a natural disaster, fire, accident, theft or vandalism. Many rules and limits apply; some are loosened for victims of Hurricanes Harvey, Irma and Maria and certain California wildfires. For 2018 through 2025, this deduction is suspended except for losses due to an event officially declared a disaster by the President.  READ MORE +

Keeping a trust a secret could violate state law

If your estate plan includes trusts, you may have a good reason for wanting to keep them a secret from the beneficiaries, such as your children. But, don’t run afoul of state law, which may require trustees to disclose information to beneficiaries. One way to avoid disclosure requirements is to not name your children as beneficiaries and, instead, grant your spouse a power of appointment over the trust. Your spouse can direct trust funds to your children as needed, but because they’re not beneficiaries, the trustee won’t be required to inform them about the trust.  READ MORE +

Size of charitable deductions depends on many factors

Whether you’re claiming charitable deductions on your 2017 return or planning your donations for 2018, be sure you know how much you’re allowed to deduct. Your deduction depends on not only the amount you give, but also what you give (for example, cash, property or services), whether your total donations for the year exceed certain income-based limits, whether you receive a benefit from the charity, and even how the charity uses the gift. Other rules and limits also apply, and the TCJA could affect your deductions for your 2018 donations.  READ MORE +

5 estate planning tips for the sandwich generation

If you’re currently caring for both your children and your aging parents, you’re part of a growing segment of the population known as the “sandwich generation.” If your care includes providing financial support to your parents, your estate planning may have to expand to include them as well as your children. To provide for your parents in the event you predecease them, consider having your estate plan establish a trust for their benefit, with any remaining assets passing to your children when your parents die.  READ MORE +

Home equity borrowers get good news from the IRS

If you’re considering a home equity loan, know that, as of Jan. 1, the rules have changed under the Tax Cuts and Jobs Act. The IRS recently provided information about these loans and the news is good.  READ MORE +

A joint home purchase can ease estate tax liability

If you’re planning on buying a home that you one day wish to pass on to your child and estate taxes are a concern, consider a joint purchase. This technique is based on the concept that property can be divided not only into pieces, but also over time. You buy a current interest in the property and your child buys the remainder interest. If you both pay fair market value for your respective interests, the transfer from one generation to the next should be free of gift and estate taxes. But there are downsides.  READ MORE +

Understanding the New Tax Code: Changes to the Alternative Minimum Tax

The 2017 tax reform bill made changes to the Alternative Minimum Tax (AMT), including new exemption and phaseout amounts that will significantly alter the number of taxpayers affected.  READ MORE +

Tax deduction for moving costs: 2017 vs. 2018

If you moved for work-related reasons in 2017, you might be able to deduct some of the costs on your 2017 return. But if you move in 2018, the costs likely won’t be deductible. The Tax Cuts and Jobs Act suspends the moving expense deduction for 2018–2025, except for military members in certain situations. To deduct 2017 work-related moving expenses, you must pass a distance test and a time test. Deductible expenses generally include such costs as move-related travel (but not meals) and packing and transporting your personal property.  READ MORE +

Understanding the New Tax Code: To Itemize or Not to Itemize?

Principal Robert Hughes addresses one of the most common questions coming out of the new federal tax reform bill: “Should I continue to itemize my deductions?”  READ MORE +

Follow IRS rules to ensure you receive your charitable tax deductions

Donating to charity can reduce your taxable estate and benefit your favorite organizations. By making donations during your lifetime, you can claim income tax deductions. For your donations to be deductible, they must meet certain IRS criteria. For example, contributions generally are deductible only in the tax year they’re made: If you pledged $5,000 in October 2017 but paid only $1,500 of your pledge by Dec. 31, 2017, you’re allowed to deduct only the $1,500 amount on your 2017 tax return.  READ MORE +

Families with college students may save tax on their 2017 returns with one of these breaks

The recently passed Bipartisan Budget Act of 2018 included an extension of the tuition and fees deduction. This is one of a few higher education tax breaks families with college or grad students may be able to claim on their 2017 returns. There’s also the American Opportunity credit and the Lifetime Learning credit. In most cases you can take only one break per student, and, for some breaks, only one per tax return. Other rules and limits also apply. To learn which break(s) will provide you the greatest savings on your 2017 tax return, contact us.  READ MORE +

Only certain trusts can own S corporation stock

S corporations must comply with strict requirements or risk losing their tax-advantaged status. In an estate planning context, it’s critical that any trusts that will receive S corporation stock through the operation of your estate plan be eligible shareholders. Potentially eligible trusts include grantor trusts, testamentary trusts, QSSTs and ESBTs. If you have S corporation stock that will be distributed to a trust, we can help you assess whether its terms could inadvertently disqualify the S corporation.  READ MORE +

TCJA temporarily lowers medical expense deduction threshold

With rising health care costs, claiming whatever tax breaks related to health care that you can is more important than ever. But there’s a threshold for deducting medical expenses that may be hard to meet. Fortunately, the Tax Cuts and Jobs Act has reduced the threshold from 10% of adjusted gross income to 7.5% for 2017 and 2018. Contact us if you have questions about what expenses are eligible and whether you can qualify for this itemized deduction on your 2017 tax return. We can also share tips for maximizing your 2018 medical expense deduction.  READ MORE +

If you made gifts last year, you may (or may not) need to file a gift tax return

Gifting assets to loved ones is a simple way to reduce your taxable estate. What may not be as simple is determining whether you need to file a gift tax return (Form 709). For example, a 2017 return must be filed by April 17 if you made outright gifts of cash to any one person exceeding the $14,000 annual exclusion amount. But a return doesn’t need to be filed if you paid qualifying educational expenses on behalf of someone else directly to an educational institution. Contact us to learn more about when a gift return is required and when it’s simply a good idea.  READ MORE +

State and local sales tax deduction remains, but subject to a new limit

If you itemize, you can deduct either state and local income taxes or state and local sales taxes. Deducting sales tax can be valuable if you reside in a state with no or low income tax or purchased a major item, such as a car. The deduction for state and local taxes (including income or sales tax, as well as property tax) had been on the tax reform chopping block. It survived, but, for 2018 through 2025, the Tax Cuts and Jobs Act imposes a new limit: Your total deduction for all state and local taxes combined can’t exceed $10,000. Contact us to learn more.  READ MORE +

Life insurance can be a powerful estate planning tool for nontaxable estates

Life insurance can offer significant estate planning benefits even if estate tax isn’t a concern for your family. For example, you can use life insurance to replace wealth that’s lost to long term care (LTC) expenses for you or your spouse. Although LTC insurance is available, it can be expensive, especially if you’re already beyond retirement age. For many people, a better option is to use personal savings and investments to fund LTC needs and to purchase life insurance to replace the money that’s spent on such care.  READ MORE +

Can you deduct home office expenses?

For 2018, fewer taxpayers will be eligible for a home office deduction. Employees claim home office expenses as a miscellaneous itemized deduction. For 2017, this means there’s a tax benefit only if these expenses plus other miscellaneous itemized expenses exceed 2% of adjusted gross income. For 2018, the Tax Cuts and Jobs Act suspends miscellaneous itemized deductions subject to the 2% floor. But if you’re self-employed, you can deduct eligible home office expenses against self-employment income. Additional rules and limits apply; contact us for details.  READ MORE +

Have you taken state estate taxes into account?

The Tax Act and Jobs Act has doubled the federal estate tax exemption, which means fewer families will be subject to estate taxes. But it’s important to consider how state estate or inheritance taxes may affect you. One option is to move to a state that imposes low or no death taxes. But moving to a tax-friendly state doesn’t necessarily mean you’ve escaped taxation by the state you left. Unless you’ve cut all ties with your former state, there’s a risk that the state will claim you’re still a resident and are subject to its estate tax. Contact us to learn more.  READ MORE +

Personal exemptions and standard deductions and tax credits, oh my!

The Tax Cuts and Jobs Act, in addition to generally reducing individual tax rates, eliminates personal exemptions, increases the standard deductions and expands the child credit. For some taxpayers, a higher standard deduction may compensate for lost exemptions and even provide additional tax savings. But for those with many dependents or who itemize deductions, these changes might result in a higher tax bill, depending in part on how much they can benefit from child credit enhancements. These changes are just the tip of the iceberg.  READ MORE +

Tax Cuts and Jobs Act expands appeal of 529 plans in estate planning

A 529 plan is one of the most flexible tools available for college funding, and it can provide significant estate planning benefits. Beginning this year, under the Tax Cuts and Jobs Act, the definition of “qualified education expenses” has been expanded to include not just postsecondary school expenses but also primary and secondary school expenses. For estate tax purposes, all of your contributions, together with all future earnings, are removed from your taxable estate even though you retain control over the funds.  READ MORE +

Don’t be a victim of tax identity theft: File your 2017 return early

The IRS has announced that it will begin accepting 2017 income tax returns on January 29. Filing as close to that date as possible can help protect you from tax identity theft, an all-too-common scam in which thieves file bogus returns using victims’ Social Security numbers. Tax identity theft can cause big headaches and delay legitimate refunds. But if you file first, it will be the return filed by a potential thief that’s rejected, not yours. If you’re getting a refund, you’ll also benefit from getting it sooner. Contact us for help filing early.  READ MORE +

Income statement items warrant your auditor’s attention

During your financial statement audit, we assess whether the amounts reported on your income statement capture financial performance during the reporting period. This requires us to focus on three main components: 1) revenue, 2) cost of goods sold, and 3) operating expenses. Each component requires a different audit approach, depending on the level of complexity, possible effects on balance sheet items and the potential for manipulation by dishonest employees. Contact us for more information on how we plan to test and verify these accounts this audit season.  READ MORE +

Preserve wealth for yourself and your heirs using asset protection strategies

If you wish to protect your assets while retaining some control over them, consider an irrevocable trust. Transferring assets to such a trust generally places them beyond your creditors’ reach. And by including a “spendthrift” provision, you can also protect the assets against claims by your beneficiaries’ creditors. A spendthrift provision prohibits your beneficiaries from selling or assigning their interests in the trust, either voluntarily or involuntarily.  READ MORE +

Most individual tax rates go down under the TCJA

The Tax Cuts and Jobs Act generally reduces individual tax rates for 2018 through 2025. It maintains seven tax brackets but reduces the rates for all brackets except 10% and 35%, which remain the same. It also makes some adjustments to the income ranges each bracket covers. For example, the 2017 top rate of 39.6% kicks in at $418,401 of taxable income for single filers and $470,701 for joint filers, but the reduced 2018 top rate of 37% takes effect at $500,001 and $600,001, respectively. Contact us for help assessing what your tax rate likely will be for 2018.  READ MORE +

Tax Cuts and Jobs Act: Key provisions affecting estate planning

The Tax Cuts and Jobs Act is a sweeping revision of the tax code that alters tax law affecting individuals, businesses and estates. Focusing specifically on estate tax law, beginning after December 31, 2017, and before January 1, 2026, the combined gift and estate tax exemption and the generation-skipping transfer (GST) tax exemption amounts double from an inflation-adjusted $5 million to $10 million. For 2018, the exemption amounts are expected to be $11.2 million ($22.4 million for married couples). The marginal tax rate for all three taxes remains at 40%.  READ MORE +

Tax Cuts and Jobs Act: Key provisions affecting individuals

On December 20, Congress completed passage of the Tax Cuts and Jobs Act. The new law means substantial changes for individual taxpayers. For example, it reduces tax rates for most brackets, nearly doubles the standard deduction and expands the child tax credit. And it provides alternative minimum tax (AMT) and estate tax relief. But it also reduces or eliminates many tax breaks. Most changes affecting individuals are only temporary, generally applying for 2018 through 2025. If you have questions or would like to discuss how you might be affected, contact us.  READ MORE +

Properly planning for incapacity requires specific estate planning strategies

Most estate plans focus on what happens after you die. But if you haven’t made arrangements in the event you become mentally incapacitated, your plan is incomplete. There are tools you can use to ensure that a person you choose handles your affairs in the event you cannot, such as a health care power of attorney. Sometimes referred to as a “durable medical power of attorney” or “health care proxy,” this authorizes your designee to make medical decisions for you if you can’t make or communicate them yourself.  READ MORE +

401(k) retirement plan contribution limit increases for 2018; most other limits are stagnant

Retirement plan contribution limits are indexed for inflation, but with inflation remaining low, most limits are unchanged for 2018. The only limits that have increased are for 401(k)s, from $18,000 to $18,500, and defined contribution plans, from $54,000 to $55,000. Limits for SIMPLEs and IRAs remain at $12,500 and $5,500, respectively. Catch-up contributions (for taxpayers age 50 or older) remain at $6,000 for 401(k)s, $3,000 for SIMPLEs and $1,000 for IRAs. Additional factors may affect how much you’re allowed to contribute. Check with us for more details.  READ MORE +

Appointing the right trustee for your living trust provides peace of mind

During life, you can serve as your living trust’s trustee and manage the assets. However, you must choose a trustee to oversee and administer the trust after your death (and during your lifetime, should you become unable to act as trustee). You generally have two types of trustee to choose from: individual or corporate. The former may be a family member or close friend, a business advisor, or an attorney. The latter may be a financial institution, a bank trust department or a trust company. We can help you determine who the right trustee is for your situation.  READ MORE +

Which tax-advantaged health account should be part of your benefits package?

On Oct. 12, an executive order was signed that, among other things, directs the Secretaries of the Treasury, Labor, and Health and Human Services to consider proposing regs or revising guidance to expand the ability of employers to offer Health Reimbursement Arrangements (HRAs). But HRAs are just one type of tax-advantaged account you can provide employees to help fund their health care expenses. Also available are Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs). Which one should you include in your benefits package?  READ MORE +

Who should own your life insurance policy?

If you own life insurance policies at your death, the proceeds will be included in your estate. The way around this problem is to not own the policies when you die. Ownership by your children can be a good option when your primary goal is to pass wealth to them. Proceeds aren’t subject to estate tax on your or your spouse’s death, and your children receive all of the proceeds tax-free. On the downside, policy proceeds are paid to your children outright. This may be problematic if a child has creditor problems.  READ MORE +

Don’t ignore the Oct. 16 extended filing deadline just because you can’t pay your tax bill

The extended deadline for filing your 2016 individual federal income tax return is Oct. 16. If you extended your return and know you owe tax but can’t pay the bill, be sure to still file your return by the 16th. This will allow you to avoid the 5%-per-month failure-to-file penalty; you’ll owe only an interest charge. When must you pay the balance due? As soon as possible, if you want to halt the IRS interest charges. You can pay by credit card or take out a loan. But an IRS installment agreement may be less costly. For assistance or more information, contact us.  READ MORE +

“Bunching” medical expenses will be a tax-smart strategy for many in 2017

Out-of-pocket medical expenses may be deductible if they exceed 10% of your adjusted gross income. By “bunching” nonurgent medical expenses into alternating years, you may be able to exceed the floor. The “Unified Framework for Fixing Our Broken Tax Code” President Trump and congressional Republicans released on Sept. 27 proposes, among other things, increasing the standard deduction and eliminating most itemized deductions, which likely would include the medical expense deduction. So bunching such expenses into 2017 may be tax-smart. Contact us to learn more.  READ MORE +

Tax law uncertainty requires an estate plan that can roll with the changes

Taxes are anything but certain. So how can you plan your estate when the tax landscape may look dramatically different in the future? Take a flexible approach that allows you to hedge your bets. An irrevocable trust can make it possible to remove assets from your estate now, but give the trustee the authority to force the assets back into your estate if that turns out to be the better strategy. For the technique to work, you must retain no control over the trust assets and the trustee should have absolute discretion over distributions. Contact us to learn more.  READ MORE +

2 ways spouse-owned businesses can reduce their self-employment tax bill

If you own an unincorporated business with your spouse, you may face high self-employment (SE) taxes. An unincorporated business in which both spouses are active is typically treated by the IRS as a partnership owned 50/50 by the spouses. For 2017, that means you’ll each pay the maximum 15.3% SE tax rate on the first $127,200 of your respective shares of net SE income from the business. But if you can establish that your business is a sole proprietorship or that the partnership isn’t 50/50, you might save SE tax. Contact us to learn more about reducing SE taxes.  READ MORE +

ABCs of HSAs: How an HSA can benefit your estate plan

A Health Savings Account (HSA) is a tax-advantaged way to both pay for health care costs and pursue your estate planning goals. HSAs, which must be paired with a high-deductible health plan, allow pretax contributions and tax-free withdrawals for qualified medical expenses. Unused HSA balances can supplement retirement income or continue growing on a tax-deferred basis for your family’s future benefit. But if you name someone other than your spouse as beneficiary, he or she will owe income tax on the HSA balance at your death. Contact us to learn more.  READ MORE +

Why you should boost your 401(k) contribution rate between now and year end

If you’re not making the maximum 401(k) contribution allowed ($18,000, or, if age 50 or older, $24,000), consider increasing your contribution rate through year end. Traditional 401(k) contributions are pretax, plan assets can grow tax-deferred (you pay no income tax until you take distributions), and your employer may match some or all of your contributions pretax. Plus your paycheck will be reduced by less than the dollar amount of the contribution, because income tax isn’t withheld. Contact us to discuss the best tax and retirement-saving strategies for you.  READ MORE +

Save more for college through the tax advantages of a 529 savings plan

With kids back in school, it’s a good time for parents (and grandparents) to think about college funding. One option is a Section 529 plan. It offers the opportunity to build up a large college nest egg via tax-deferred compounding and can be particularly powerful if contributions begin when the child is quite young. Contributions aren’t deductible for federal purposes, but distributions used to pay qualified expenses are typically income-tax-free for both federal and state purposes, thus making the tax deferral a permanent savings. Contact us to learn more.  READ MORE +

Estate tax relief for family businesses is available … in the form of a deferral

If a portion of your wealth is tied up in a closely held business, your estate may lack enough liquid assets to pay estate taxes. Internal Revenue Code Section 6166 permits qualifying estates to defer a portion of their estate tax liability for up to 14 years from the date the tax is due. During the first four years of the deferment period, the estate pays interest only, followed by 10 annual installments of principal and interest.  READ MORE +

The ABCs of the tax deduction for educator expenses

Elementary and secondary school teachers and other eligible educators can deduct up to $250 for qualifying classroom supplies they pay for out of pocket. This is an “above-the-line” deduction, which means you don’t have to itemize. Before this special break became available, such expenditures could be deducted only as unreimbursed business expenses under the miscellaneous itemized deduction, subject to a 2% of adjusted gross income (AGI) floor, which could be a difficult threshold to meet. Contact us for details on the educator expense deduction.  READ MORE +

How to determine if you need to worry about estate taxes

One tax being considered for repeal as part of tax reform is the estate tax. It applies to transfers of wealth at death. Its sibling, the gift tax (also being considered for repeal) applies to transfers during life. Yet most taxpayers won’t face these taxes even if they remain in place. For 2017, the federal lifetime gift and estate tax exemption is $5.49 million. Any gift tax exemption you use during life does reduce the amount of estate tax exemption available at your death, but every gift you make won’t use up part of your exemption. Contact us for details.  READ MORE +

Beware the GST tax when transferring assets to grandchildren

Despite a generous $5.49 million generation-skipping transfer (GST) tax exemption, complexities surrounding its allocation can create tax traps. The GST tax is a flat, 40% tax on transfers to “skip persons,” such as family members more than a generation below you. To take full advantage of the GST tax exemption, you (or your estate’s representative) must properly allocate it to specific gifts and bequests. If you don’t, you could trigger a costly GST tax bill. But the GST tax might be repealed. Contact us for more information on GST tax planning or tax law changes.  READ MORE +

Rev up retirement offerings with an NQDC plan

Highly compensated owners and executives often struggle to save enough money to maintain their lifestyles in retirement. A nonqualified deferred compensation (NQDC) plan can help. It’s an agreement that the business will pay out in the future, such as during retirement, compensation that participants earn now. The nondiscrimination rules, contribution limits and distribution rules that apply to most retirement plans don’t apply to NQDC plans. But they are subject to other strict rules. Let us help you decide whether an NQDC plan is a good option for your business.  READ MORE +

Material participation key to deducting LLC and LLP losses

If your business is a limited liability company (LLC) or limited liability partnership (LLP) and you can be considered a general partner, you can meet any one of 7 “material participation” tests to avoid passive treatment under the passive activity loss rules. The rules prohibit taxpayers from offsetting losses from passive business activities (such as limited partnerships or rental properties) against nonpassive income (such as wages, interest, dividends and capital gains). Contact us to learn about the 7 tests and how to ensure you can meet at least one of them.  READ MORE +

A refresher on the ACA’s tax penalty on individuals without health insurance

With repeal and replace efforts apparently having collapsed for now, it’s a good time for a refresher on the Affordable Care Act’s tax penalty on individuals without “minimum essential” health coverage. The 2017 penalty generally is the greater of: 1) 2.5% of household income above the taxpayer’s filing threshold, or 2) $695 ($347.50 for household members under age 18) times the number of uninsured individuals in a household, limited to $2,085. But the penalty can’t exceed the national average cost of bronze coverage for the household. Contact us for details.  READ MORE +

6 ways to control your unemployment tax costs

Typically, the more unemployment claims made against a business, the higher the unemployment tax bill. But there are ways to control your unemployment tax costs. First, don’t hire employees to fill potentially short-term needs. To avoid layoffs, use temps instead. If you must hire, hire carefully to increase the likelihood that new employees will work out. And if you must terminate someone, provide severance (which may delay the start of unemployment benefits) and outplacement services (which, if successful, will hasten their end). Contact us for more ideas.  READ MORE +

Don’t overlook tax apportionment when planning your estate

If you expect your estate to have a significant estate tax liability at your death and you want to avoid unintended consequences, be sure to include a well-drafted tax apportionment clause in your will or revocable trust. This clause specifies how the estate tax burden will be allocated among beneficiaries. One apportionment option is to have all taxes paid out of assets passing through your will. Beneficiaries receiving assets outside your will (such as IRAs or life insurance proceeds) won’t bear any tax burden. But other options might better fit your wishes.  READ MORE +

3 midyear tax planning strategies for individuals

Here are three tax strategies for individuals that can be more effective if you begin executing them midyear: 1) Take steps to stay out of a higher tax bracket, such as deferring income and accelerating deductible expenses or shifting income to family members in lower tax brackets. 2) Sell depreciated investments to generate losses to offset gains you’ve realized this year. 3) Try to bunch medical expenses into every other year to exceed the adjusted gross income floor for deductibility. Contact us for the ins and outs of these and other midyear strategies.  READ MORE +

The stretch IRA: A simple yet powerful estate planning tool

The IRA’s value as a retirement planning tool is well known. But if you don’t need an IRA to fund your retirement, you can use it as an estate planning tool to benefit your children or other beneficiaries on a tax-advantaged basis by turning it into a “stretch” IRA. It’s simply a matter of designating a beneficiary who’s significantly younger than you. This could be, for example, your spouse (if there’s a substantial age difference between the two of you), a child or a grandchild. You can also name a trust as beneficiary. Contact us for details.  READ MORE +

ABLE accounts can benefit loved ones with special needs

If in your estate planning you’d like to provide for a loved one with a significant disability, consider an ABLE account. You can make nondeductible annual cash contributions to a qualified beneficiary’s ABLE account up to the federal gift tax annual exclusion amount (currently, $14,000). To qualify, a beneficiary must have become blind or disabled before age 26. The account grows tax-free, and withdrawals of earnings are tax-free if used to pay “qualified disability expenses.” Among other things, these include health care, education, housing and transportation.  READ MORE +

Own a vacation home? Adjusting rental vs. personal use might save taxes

Own a vacation home? Adjusting rental vs. personal use might save taxes. If you rent out the home for less than 15 days, you don’t have to report the income, but rental expenses aren’t deductible. If you rent it out for 15 days or more, you must report the income, and deductibility of expenses depends on how the home is classified for tax purposes, based on personal vs. rental use. Adjusting the number of days you rent it out and/or use it personally between now and year end might allow the home to be classified in a more beneficial way. Contact us to learn more.  READ MORE +

Leaving specific assets to specific heirs is an estate planning no-no

Planning your estate around specific assets can be risky. If you leave specific assets (such as a home, a car or stock) to specific people but dispose of an asset without updating your will, you might inadvertently disinherit someone. Therefore, it’s generally preferable to divide your estate based on dollar values or percentages. If it’s important to you that specific assets go to specific heirs, consider creating a trust that provides for your assets to be divided equally but for your heirs to receive specific assets at fair market value as part of their shares.  READ MORE +

Are income taxes taking a bite out of your trusts?

Are income taxes taking a bite out of your trusts? For trusts, the income threshold is very low for triggering the top income tax rate of 39.6%, top long-term capital gains rate of 20% and the 3.8% net investment income tax. The threshold is only $12,500 in 2017. But you can soften the blow by using an intentionally defective grantor trust, shifting nongrantor trust assets into tax-exempt or tax-deferred investments, or distributing trust income to beneficiaries in lower tax brackets. We can review your trusts and help find the best solution to achieve your goals.  READ MORE +

Business owners: Put your successor in a position to succeed

Transitioning your company to a successor means becoming a mentor. As such, you’ll have to communicate clearly, be patient and know what you’re trying to accomplish. For starters, identify various ways to pass along your knowledge. Consider, for instance, a formal training program. Have your successor work in each business department or area. Also, encourage him or her to join trade associations and network with executives in your industry and others. Please contact our firm for more help maximizing the effectiveness of your succession plan.  READ MORE +

Are your retirement savings secure from creditors?

A primary goal of estate planning is asset protection. If you have significant assets in IRAs and other retirement plans, it’s important to understand the extent to which those assets are protected against creditors’ claims. For example, the asset protection available for IRAs depends in part on whether the owner is involved in bankruptcy proceedings. In a bankruptcy context, creditor protection is governed by federal law: Both traditional and Roth IRAs are exempt from creditors’ claims up to an inflation-adjusted $1 million. Contact us for additional details.  READ MORE +

Hire your children to save taxes for your business and your family

Own a business? Have children who are teens, college students or new grads? If you hire them this summer, not only can they benefit but you can enjoy tax savings, too. By shifting some business income to a child as wages for services performed by him or her, you can turn high-taxed income into tax-free or low-taxed income. For your business to deduct the wages, the work done must be legitimate and the wages must be reasonable. Depending on your business’s structure, you might enjoy employment tax savings, too. Additional rules apply; contact us for details.  READ MORE +

Asset valuations and your estate plan go hand in hand

If you’re making noncash gifts in trust or outright to beneficiaries, know the values of those gifts and disclose them to the IRS on a gift tax return. For substantial gifts of noncash assets other than marketable securities, have a qualified appraiser value the gifts at the time of the transfer. This is critical because, if the IRS deems your valuation to be “insufficient,” it can revalue the property and assess additional taxes. If the IRS finds that the property’s value was “substantially” or “grossly” misstated, it will also assess additional penalties.  READ MORE +

Now’s a great time to purge old tax records

Do you know what individual income tax records are safe to toss? You need to hold on to your 2016 records for now, but it’s a great time to see what records for previous tax years you can purge. At minimum, keep records for as long as the IRS can audit your return or assess additional taxes, generally three years after filing. So you may be able to shred and toss (or electronically purge) most records related to returns for 2013 and earlier. But hang on to certain records longer, such as tax returns themselves, W-2 forms and real estate or investment records.  READ MORE +

Life insurance and an estate plan may not always mix well

Tax efficiently mixing life insurance into your estate plan can be challenging. If you own an insurance policy on your life, you can remove the proceeds from your taxable estate by transferring it to a family member or an irrevocable life insurance trust. But if you don’t survive for at least three years, the proceeds will be pulled back into your estate, possibly triggering estate taxes. The recipe for success? Transfer the policy as part of a “bona fide sale for adequate consideration” to an irrevocable grantor trust. Contact us to learn more.  READ MORE +

Individual tax calendar: Key deadlines for the remainder of 2017

Here are a few key tax-related deadlines for individuals through the rest of 2017. JUNE 15: Pay second installment of 2017 estimated taxes, if applicable. SEPT. 15: Pay third installment of 2017 estimated taxes, if applicable. OCT. 16: File a 2016 income tax return and pay any tax, interest and penalties due, if an automatic six-month extension was filed. DEC. 31: Incur various expenses that potentially can be deducted on your 2017 tax return. Contact us for more information about the filing requirements and to ensure you’re meeting all applicable deadlines.  READ MORE +

A timely postmark on your tax return may not be enough to avoid late-filing penalties

The 2016 tax return filing deadline for individuals is April 18, and the IRS considers a paper return to be timely filed if postmarked by midnight. If you owe tax, dropping your return, along with a check for the tax due, in a mailbox on the 18th may not be sufficient. If the envelope gets lost, you could be hit with failure-to-file and failure-to-pay penalties. To avoid this risk, use certified or registered mail or one of the private delivery services designated by the IRS. (See for a list.) Let us know if you have questions about the rules.  READ MORE +

Saving tax with home-related deductions and exclusions

Home ownership comes with many tax-saving opportunities to consider when filing your 2016 return or tax planning for 2017, such as property tax, mortgage interest, home-equity-debt interest and home office deductions and rental income and home-sale gain exclusions. A mortgage-insurance premium deduction and debt forgiveness exclusion expired December 31, 2016. Elimination of more breaks, such as the property tax deduction, has been proposed. Whether such changes will be signed into law and with what effective dates is uncertain. Contact us for more information.  READ MORE +

2016 IRA contributions — it’s not too late!

There’s still time to make 2016 IRA contributions: The deadline is April 18. If the contribution is deductible, it will lower your 2016 tax bill. But even if it isn’t, a 2016 contribution is likely a good idea. Your money can grow tax-deferred (tax-free in Roth accounts). But annual contributions are limited by law, and any unused limit can’t be carried forward; once the deadline has passed, the savings opportunity is lost forever. The 2016 limit is $5,500 (plus $1,000 for those age 50 or older on Dec. 31, 2016). Want to learn more? Contact us.  READ MORE +

Entrepreneurs Coming to the US. What you don’t know about taxes can really hurt you!

Business opportunities in the US marketplace have never been better for non-US based entrepreneurs and start-ups. The US economy continues to show strong growth and economic resilience, even in the face of volatile capital markets in early 2016. But both foreign individuals and start-ups need to be wary of the complex US tax landscape, as poor planning and even inadvertent behavior or actions can result in huge tax liabilities.  READ MORE +

Making UK Equity Plans Work for US Employees.

When UK emerging companies venture outside the UK, they quickly need to address whether – and how – to extend equity-based compensation to non-UK employees. However, few jurisdictions offer a regime as favourable as the UK’s Enterprise Management Incentives (EMI) scheme for providing equity compensation to emerging company employees.  READ MORE +

Bet Early. Win Big. Tax Plan Accordingly.

There is an abundance of digital media coverage, and discussions at leading venture funding events about the huge opportunities for investors and founders alike to win big financially – by creating and scaling innovative start-ups.  READ MORE +

Raising Funds? Be Sure to Scrub Down the Term Sheet

According to Bruce Gibney (formerly with famed VC firm, Founders Fund) “Venture financing turns on three things: Money, power and ignorance.” He went on to note “These variables converge most violently in the term sheet, which proposes the basic relationship between the venture capitalist and the company. Term sheets have a set of short, formalized components, which in combination quickly become exceedingly tangled and opaque.”  READ MORE +
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