Tax Update Blog: 2009 Year-end Planning Archives
Tax Moves for the last day of 2009
December 31, 2009
There are only a few hours left in 2009. Still, it's enough for a few year-end tax planning moves, if you hurry!
Capital losses: If you sell stock at a loss today, you can take the loss. You can deduct capital losses to the extent of capital gains, plus (if you are an individual) $3,000. This doesn't work for short sales, which are considered closed on the settlement date, rather than the trade date; also, beware the "wash-sale" rules.
Live another day. If you survive today, but not tomorrow, you may avoid estate tax altogether, assuming you have enough assets to worry about the estate tax.
Or don't. If your estate is under $3.5 million, maybe this is a good day to check out. Your estate will be too small to pay estate tax, but your heirs will benefit from a step-up in the basis of your assets to their date-of-death value.
Remember, the official position of the Tax Update is that there's no good day for dying.
You also have time to make some charitable contributions, either by getting the check in the mail today or by using your credit card. If you are feeling charitable, but you don't know what to do, here are some charities that I like:
Iowa Donor Network, the Iowa organization that gathers and allocates donor organs.
And don't forget that TaxGrrrl is running in the Komen Race for the Cure. Sponsor her, or make a donation.
Update from the comments:
International Development Enterprises. All money donated to them goes towards developing techonology suitable for poorer countries, which is then sold in the free market. Water pumps, water purifiers and so on. Free market and by design self sustaining, as people have to choose to buy it.
Also, the Center for Agricultural Law and Taxation does a wonderful job. Unfortunately, they don't have an online credit card donation page (ahem, Roger!).
If you want some more ideas, Kay Bell has a roundup of year-end tax moves.
This is the last of our 2009 year-end tax planning tips. See you next year!
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Year-end deductions: beware related parties
December 30, 2009
As the tax year winds up, businesses are busy accruing year-end expenses to get the deduction into this year. They need to be careful: if you owe money to a cash-basis "related party," it's not enough to accrue the expense this year. You need to pay it to deduct it.
Code Section 267 only allows a deduction to a related party "as of the day as of which such amount is includible in the gross income of the person to whom the payment is made." That's no problem if the "related party" is on the accrual method, because they will be accruing the income at the same time you accrue the expense. But if the related party is a cash-basis taxpayer, you have to pay.
Who is "related?" It's a pretty wide net, but most problems arise with closely-held accrual-method businesses and their cash basis owners. If you have a C corporation, only owners of more than 50% of the stock, and their families (siblings, spouses, ancestors and descendants) are related. For pass-through entities -- partnerships and S corporations -- any owner is a related party, along with members of owners families and anybody related to the family members.
The broad definition of related parties for pass-throughs means that if a calendar year accrual-method S corporation accrues a bonus for a 2009 shareholder's nephew payable in January 2010, the deduction gets deferred until 2010. The same thing applies to interest expense, rental expense, or any other expense owed to a cash-basis related party.
The year is almost over. Time to review the Tax Update's 2009 year-end planning tips!
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Year-end planning: S corporation health insurance
December 29, 2009
S corporation health insurance is one of the most popular items on the internet, if the searches that get people to the Tax Update are a fair measure.* It seems folks are looking for guidance on how to report S corporation fringe benefits on year-end paychecks and W-2s, so let's do a quick review of how shareholders of 2% or more of an S corporation should report their health insurance and other fringes. All references to "S corporation shareholders" are to those shareholders who own 2% or more of the company's stock.
Health Insurance for S corporation shareholders is supposed to be on the shareholders' W-2. It should be subject to federal withholding, but it should not be subject to FICA or Medicare tax. It is also subject to state tax and withholding in most states (including Iowa), but not all of them (for example, Pennsylvania).
If the health insurance is properly reported on the shareholder's W-2, it should be deducted in full "above the line" on Line 29, page 1, form 1040.
The IRS takes the position that W-2 reporting is the only way to report S corporation shareholder health insurance. They say that it is improper to add it back on the shareholder K-1, and that the shareholder deduction is available only if it is reported on the W-2.
If an S corporation shareholder pays for his own health insurance, he should submit it to his company for reimbursement before year end. The reimbursement should then be included on the shareholder W-2. The IRS says this is the only way for an S corporation shareholder to deduct personally-paid health insurance expense -- again on Form 1040, line 29.
If the child, grandchild, parent, or spouse of an S corporation shareholder works for the S corporation and is covered by the corporation's insurance plan, she is considered an S corporation shareholder and is subject to the same rules as a direct stockholder.
What about Medicare premiums? Voluntary medicare premiums reimbursed or paid by the S corporation and included in the shareholder's W-2 qualify as health insurance.
If the S corporation contributes to a shareholder's health savings account, it is included on the shareholder's W-2 (but not for FICA or Medicare) and is deducted on Line 25 of Form 1040, assuming the shareholder otherwise qualifies for an HSA.
The IRS position on S corporation shareholder health insurance is spelled out in Notice 2008-1.
Link: Tax Update coverage of S corproation health insurance issues.
*I know, they aren't.
This is another installment in the Tax Update's 2009 year-end tax tips series. Collect them all!
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Year-end planning and the Iowa School Tuition Organization Credit
December 28, 2009
There isn't much time left in your 2009 year-end planning, but there is still time to save some real money this year. If you feel charitable towards private elementary schools, the Iowa School Tuition Organization Tax Credit makes makes certain donations to fund private elementary schools nearly free, after tax.
The STO credit is a 65 percent state tax credit. While there is no Iowa charitable deduction for STO donations, the federal deduction is unaffected. Here's how it works for a hypothetical top-bracket non-AMT Iowa taxpayer (ignoring phaseouts) in dollars and cents for a $100 gift -- a net cost after tax of $10.73:
There is a catch: Iowa limits the annual amount of gifts eligible for this credit. If the credit is oversubscribed, you may not get a full credit. Your STO may be able to give you some guidance on whether there is still room for the full credit this year. Here are some to choose from:
Iowa Lutheran School Tuition Organization
SouthEast Iowa Tuition Organization
Heart of Iowa STO
Catholic Tuition Organization
While these credits may be less than ideal from a policy standpoint (the Tax Update is more of a voucher fan), you go to war with the tax law you have. If this is where your charitable inclinations lie, the Iowa STO credit makes contributions to student tuition organizations a tax-efficient way to go.
As the decade winds down, wind down with the Tax Update's 2009 year-end tax tips!
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Playing the $13,000 Santa
December 24, 2009
In this season of frantic giving, don't forget the $13,000 per-donor, per-donee gift tax exclusion. Unless you have great confidence that you will die next year AND that Congress won't restore the estate tax retroactive to January 1, 2009, anybody who is a candidate for the estate tax should consider using the gift tax annual exclusion to get money out of the estate. A couple with four kids maximizing annual giving can reduce thier taxable estates by $520,000 over five years, not even counting appreciation of the gift.
If it's worth doing, it's worth doing right. To get the gift to count in 2009, here are some tips:
- If you're writing a check, march the lucky recipient down to the bank to cash it by December 31. Checks not cashed by year-end normally won't count as 2009 gifts.
- If you are donating private company stock, make sure the corporate secretary records the transfer on the company's books by year end. Also make sure the tax returns reflect the gift - if you make a December 25 gift of S corporation stock, make sure the donee gets a K-1 showing income for the 12/25 through 12/31 period.
- If you are donating public company stock, make sure it's in the donee's brokerage account before the end of the day December 31.
- If you are giving a disused sports facility, see your attorney; you can afford one.
Remember, if you miss the 2009 annual gifting exclusion, it's gone forever. 2009 isn't coming back.
Our 2009 year-end tax planning series concludes next week. See you then!
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The Newlywed Game, year-end tax planning edition!
December 23, 2009
Love is a many-splendored thing, but love is even better when it saves taxes. Your marital status at year-end is your filing status for the entire year, so maybe you want to run down to the courthouse and tie the knot before the ball drops before midnight January 1, local time. Sure, call me a hopeless romantic. The Tax Update just rolls that way.
A quick trip to the preacher may be in order in the following circumstances:
- One prospective spouse has a big capital gain, and the other has capital losses that would otherwise go unused.
- One of you has passive income, the other has passive losses. If you are married on the last day of the year, the losses can offset the income on a joint return.
- One of you has substantial income in 2009, and the other doesn't. If you have only one income between the two of you, you'll save taxes on a joint return because of the wider tax brackets on a joint filing.
- If you are Iowans, and one of you has pension income, marriage will enable you to exclude up to $12,000 from your Iowa income tax return. A single filer can only exclude $6,000.
There are a wide variety of other special circumstances that could lead you to tie the knot. A good tax marriage results whenever one partner has tax attributes, like capital losses, that can be used on a joint return but would not be useful on a single return. Other such items could include tax credit carryforwards and investment interest carryforwards, among others
Of course these things apply to couples pondering divorce, too, but that's too sad to dwell on this time of year. Oops, I just did. And some couples, particularly those where both have good incomes, are better off postponing marriage, or (shudder) accelerating divorce.
Anyway, you should marry for the right reasons. But if you can both be in love and cut your taxes, why not let IRS help pay for your honeymoon?
This may be the most romantic of our 2009 year-end planning tips. But we're not done yet!
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Making sure you get that year-end deduction
December 22, 2009
When you're spending money to get a tax deduction for your business by the end of the year, you might as well make sure the deduction will hold up when your friendly neighborhood IRS agent comes calling.
If you're a cash-basis taxpayer - if you aren't sure, check your business tax return or your 1040 schedule C or schedule F - you will need to show that you spent the money to claim the expense this year. Some things to remember:
- A credit card is as good as cash. Better, even, because if you incur a business expense before the end of the year, you have your credit card statement to prove it.
- If you mail a check for a business expense, the check needs to be in the mail and postmarked in 2009 to be a deductible 2009 expense. If it's a big check, maybe you should spend a few bucks extra to send it Certified Mail so you can document the postmark.
- If you receive a check in the mail, it's taxable the day you receive it, even if you don't deposit it.
- There is no "close is good enough" rule for cash basis taxpayers. Just because you could have paid a bill doesn't get you a deduction if you didn't pay it before year-end.
- Don't overdo it. If you prepay expenses more than a year out, you don't get the deduction until the year to which the payment applies.
If you are an accrual-basis taxpayer, your big year-end issues come from related-party payments. For example, a C corporation can only deduct payments to an over-50 percent owner if the payment is made before year-end. If you and a family member both own stock, you combine your ownership to see if you own over 50 percent. For C corporation personal service corporations -- doctors, lawyers, consultants, and accountants -- that pay all of their earnings out as salary, this is a critical issue; any earnings left at year-end get taxed at a flat 35 percent federal rate. S corporations and partnerships are related to all of their owners for purposes of taking deductions. They are also related to anybody in the owner's family up to kissing cousins, more or less, including ancestors, lineal descendants, spouse and siblings.
If you are looking for a deduction from buying equipment or fixed assets -- say, a Section 179 deduction or a bonus depreciation deduction -- make sure that your asset isn't just purchased, but placed in service too, before year-end. It doesn't count if it's sitting on the dock in the packing cases.
This post, which originally appeared at IowaBiz.com, is part of our year-end tax tips series.
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Harvest those capital losses!
December 18, 2009
Just as a fair chunk of Iowa's corn crop is still in the fields, lots of us have tax losses waiting to be harvested in our taxable investment portfolios. While farmers have to wait for the deep snow to go away to get their corn, you can harvest your tax losses with a call to your broker, or the touch of a cursor on your E-trade screen.
Remember, individuals can deduct capital losses to the extent of your capital gains, plus $3,000. If you have sold stock at a gain this year or have capital gains from mutual fund distributions, tax on them is optional to the extent you can sell stocks at a loss before the end of the year. It's a gimmee deduction if you keep a few tips in mind:
- You have to take the loss in a taxable account. A loss in an IRA or 401(k) plan doesn't help you.
- Normally the "trade date" is the effective date for tax purposes, so you can sell a stock as late as December 31 this year and still deduct the loss on your 2009 1040.
- If you have a loss on a short sale, the tax law treats it as closing on the settlement date, not the trade date, so you can't wait to the last minute to close a short sale to get a deduction.
- Watch out for the wash sale rules. If you buy the same stock within the 30 days preceding or following the sale of a loss stock, your loss is disallowed. This is true even if you sell from a taxable account and buy in an IRA.
Another installment in the Tax Update's 2009 year-end tax planning series!
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Buy that car right now!
December 18, 2009
Because the above-the-line deduction for new car sales and excise taxes expires December 31.
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Should you start a qualified retirement plan before year-end?
December 16, 2009
The tax law has a menu of tax-favored retirement plans for entrepreneurs. The simplest ones, SEPs and IRAs, can be set up for 2009 as late as the tax return deadline -- in the case of SEPs, the extended tax return deadline. But the most potentially lucrative plans -- qualified pension or profit-sharing plans -- have to be in place by year-end for contributions to be deducted on 2009 returns.
For a profitable entrepreneur with no employees, the "Solo-401(k)" may be the most lucrative retirement plan option. If you are profitable enough, you can make a deductible 2009 contribution to such a plan of the first $16,500 of your earnings, plus 20% of your earnings, if you are a Schedule C entrepreneur. The $16,500 piece makes for bigger contributions than would be available from SEPs or other plans for those with earnings under $245,000. That's a nice deduction for just taking money from one pocket and putting it in your other pocket.
If the plan is fully executed in 2009, it can be funded as late as the extended due date of your 2009 return.
There are downsides to such plans. They are much more expensive to maintain than a SEP, and the benefits either have to be foregone or shared if you add employees. You don't want to just jump into a qualified plan, but if you want to look into one for this year, you need to act quickly.
This is another installment in the 2009 Tax Update year-end tax tip series.
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Should you prepay your taxes due next year?
December 15, 2009
One of the most common tax planning tricks is to pay in December taxes that are otherwise due in January and April. For income taxes, this is usually done by sending the taxes in as additional estimated payments. For property taxes, you just send the check in early.
Does this make sense? Maybe, if you meet some conditions:
- If you are prepaying state and local taxes, you need to itemize. Many folks, especially those over 65, have a big enough standard deduction that they don't need to itemize.
- If you are subject to alternative minimum tax in 2009, a deduction for state and local taxes probably does you no good (though in some cases, taxpayers with capital gain income can get a benefit even if they are in AMT).
- If you are prepaying federal taxes, you have to live in Iowa or another state that allows a deduction for federal taxes paid.
- Of course, you have to expect to owe some taxes.
Assuming you meet these conditions, you still have to take into account that by prepaying taxes you are giving up interest you could otherwise earn on the money. The chart below measures whether getting the deduction sooner is worthwhile at different tax brackets, assuming that you can take the deduction in either year; a green number means prepayment is good.
As you can see, prepaying your 4th quarter taxes always pays if the deduction counts in either year. The value of prepaying declines as the ultimate due date of the return goes further out, and it never makes sense to prepay a tax due next September, like your second 2010 Iowa property tax payment.
Of course, the chart doesn't tell the whole story. You have to apply some common sense. For example, if you know you will be in AMT next year, you may want to pay a bunch of state taxes this year because the value of the deduction next year is probably zero. Unless, of course, that triggers AMT this year.
This is another installment of our exciting 2009 Year-end tax tips series!
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Don't buy somebody else's mutual fund tax liability
December 14, 2009
The end of the year is a tricky time to buy mutual fund shares in a taxable account. The tax law forces mutual funds to distribute their recognized capital gains annually, and they often do so through a big December distribution. This means you can buy an entire year's worth of tax liabilty for a mutual fund share in a single day.
Fortunately, many funds, including the Vanguard family of funds, let you know when they plan to drop the capital gain bomb. It's worth a few minutes to check these figures before invest that check from Grandma.
This is another installment in our 2009 Year-end planning series. Accept no substitutes!
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A college savings deduction just for Iowans
December 11, 2009
Mutual fund investors know all about high "loads" for investing in popular funds. It would be nice to have a fund vehicle where you receive a load, rather than pay one.
Actually, there is one vehicle that works that way: Iowa's "College Savings Iowa" Section 529 plan. Iowa law provides an "above the line" deduction for contributions up to $2,800 per donor, per donee. That means a married couple can deduct CSI contributions for each child of $5,600 on their Iowa return (there is no such deduction on the Federal 1040). For a top-bracket Iowan, the resulting tax savings are like getting a 6+% negative "load" on your investment.
The funds can be withdrawn free of Federal and Iowa tax for qualified higher education expenses, while accumulating income tax-free in the meantime.
Iowa invests through Vanguard "life-cycle" funds, which move to safer investmets as college age approaches -- a feature I learned to appreciate this year as my son began college. His CSI accounts were unscathed by the 2008 market collapse.
If you want to get a 2009 CSI deduction, you need to get the funds paid before December 31. If you don't have an account, you get the paperwork going at the CSI website.
This is another installment in our 2009 year-end tax planning series.
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S corporation basis: is it time for an S corporation holding company?
December 10, 2009
Entrepreneurs are restless. It's not unusual for them to have a lot of things going on, with a different S corporation for each business. When one business has losses, the entrepreneur takes funds out of the successful businesses to finance them. But when the entrepreneur runs low on basis in the money-losing S corporation, this can lead to problems. You can only deduct S corporation losses if you have basis in S corporation stock or debt.
The man who started the successful Dart Transportation business had this problem a few years back. He borrowed money from his S Corporation A and then loaned it to S Corporation B to get basis to deduct the losses. S Corporation B then loaned the funds back to S Corporation A, and the money was all back where it started.
The IRS didn't like this, and after a long court battle, the IRS won. The courts said, in effect, that because the cash ended up where it started, the intervening steps -- the loans -- didn't count.
Even if the loans do count, an S corporation owner can get surprised with taxable income if the corporation repays shareholder loans before the corporation has had enough profit to restore basis used to take losses.
An S corporation holding company can avoid these problems. S corporations can own other S corporations if they own 100% of the stock and make a Qualified Subchapter S Subsidiary (QSUB) election. The QSUBS retain their identity under state law, but they are "disregarded entities" for computing taxes. This structure allows you to put all of your S corporation stock basis in one place, eliminating the need to throw money around at year end to deduct losses. Your corporations remain separate legal entities, protecting them from each other's problems. But if you want to do this by year-end, get together with your lawyer and tax pro right away, because time is short this year.
This is another installment in our 2009 year-end tax planning tips series. Don't miss a one!
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Year-end planning: Make sure you have enough basis to deduct your S corporation losses.
December 09, 2009
S corporations are popular for many good reasons. One of them is the ability to deduct corporate losses on the owners' 1040s. It's been a rough year for a lot of folks and many taxpayers are looking forward to a nice tax refund from their 2009 business losses. If you are one of them, make sure you don't lose your loss deduction for lack of basis in your S corporation; shareholders can only deduct losses to the extent of their basis.
A taxpayer's initial basis in an S corporation is the amount paid for the stock. It is increased by capital contributions and by undistributed income of the S corporation. It is reduced by distributions of S corporation earnings and by S corporation losses.
A shareholder can also deduct losses of an S corporation to the extent of loans to the S corporation. The loans have to be loans made by the taxpayer; guarantees of debt do not work.
EXAMPLE: Wally starts an S corporation. He contributes $10,000 to the corporation in exchange for 100% of its stock. The corporation borrows $5,000 from Wally and $50,000 from the bank, guaranteed by Wally. The S corporation loses $20,000 in its first year. Wally can deduct $15,000 of losses this year, based on his $10,000 cash contribution and his $5,000 personal loan. The guarantee from the bank does nothing to enable Wally to deduct losses.
LESSON: Wally could have borrowed the bank loan personally and loaned it to the company; this "back-to-back" loan would have given him enough basis to deduct the remaining $5,000 S corporation loss.
Taxpayers need to be careful in dealing with S corporation basis. A few points to keep in mind:
- The basis is determined on the last day of the S corporation's tax year. This means that the taxpayer needs to project taxable income before year end to determine whether additional loans or capital contributions to the corporation are called for.
- Taxpayers also need to pay careful attention to how year-end basis contributions are structured. If a shareholder borrows money from one S corporation and loans it to the money-losing corporation to get basis, the money-losing corporation shouldn't send the money right back where it came from; the IRS will disregard all of the transfers.
Basis is only one hurdle S corporation shareholders need to clear before they can deduct losses. Taxpayers also need to be "at-risk" for their basis and the losses can't be "passive" under the "passive activity" rules. It's time to project your year end income and visit your tax pro to make sure you can deduct those 2009 tax losses.
This post originally appeared at IowaBiz.com. It is part of the Tax Update's series of 2009 year-end planning tax tips.
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The Mid-Quarter trap
December 08, 2009
While year-end asset purchases can be a great way to reduce taxes, sometimes they can backfire.
The tax law normally computes depreciation for fixed assets (other than buildings) as if they were placed in service at the mid-point of the tax year. But if more than 40% of fixed assets are placed in service in the last three months of the tax year, the assets are all treated as placed in service in the middle of the quarter in which they were purchased.
Say Joe, Inc., a calendar-year taxpayer, bought $2.4 million of new computers in July 2009 and 1,599,000 in October 2009. His depreciation for these assets for the year would be $2,399,400: $1,999,500 in "bonus" depreciation and $399,900 in regular depreciation.
But now Joe buys and installs another $2,000 computer in December. Suddenly his purchases in the last 3 months of the year are 40.0149% of fixed asset purchases for the year, and the mid-quarter convention applies. Joe's depreciation is now $2,230,525 for his 2009 additions:
- $2,000,500 in bonus depreciation
- $180,000 non-bonus depreciation for property placed in service in the third quarter, and
- $ 50,025 non-bonus depreciation for property placed in service in the fourth quarter.
The $2,000 December addition reduced depreciation expense by $168,875 for the year.
The moral: be careful in your year-end fixed asset purchases. Sometimes a little more assets can mean a lot less deductions.
Follow all of the Tax Update's 2009 year-end planning tips!
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Fixed assets and year-end planning
December 07, 2009
For many businesses, a new piece of equipment can be more just a good investment; it is often the easiest way to knock down an income tax liability. Changes in the tax rules that take effect after this year make fixed-asset planning especially important this year.
Bonus Depreciation: "Stimulus" legislation allows taxpayers who buy new property to get "bonus" depreciation equal to half of the cost of the property in the year it is placed in service, with the balance depreciated over the regular life of the property. For five-year property, this lets taxpayers recover 60% of the cost in the property's initial year. For most property (aircraft is a limited exception), this rule expires for property placed in service after December 31.
Section 179 allows taxpayers to deduct currently property that would otherwise be capitalized and depreciated. Under the "stimulus" legislation, taxpayers can elect Section 179 treatment for up to $250,000 of property for year. Unless Congress acts -- which isn't imminent -- this number goes down to $134,000 in 2010.
These provisions give taxpayers some flexibility to manage their 2010 taxable income, but they need to keep some things in mind:
- Bonus depreciation only applies to new property; Section 179 applies to both new and used equipment.
- Bonus depreciation can create or increase a net operation loss, enabling taxpayers to recover taxes paid in prior years; Section 179 is limited to active business income.
- While Section 179 starts to phase out dollar-for-dollar as property placed in service in the year exceeds $800,000, there is no such limit for bonus depreciation property additions.
- Neither Section 179 nor bonus depreciation are allowed for buildings.
- "Placed in service" isn't the same as "bought" or "ordered." It's probably not enough to have the equipment sitting in shipping containers on your loading dock at year-end. It needs to be put together and ready to go.
- Iowa does not recognize bonus depreciation or the $250,000 Section 179 limits; the Iowa Section 179 limit for 2009 is $133,000.
Remeber that there is a potential trap for some taxpayers who rush property into service before year-end: the "mid-quarter convention" rules. We'll disuss them tomorrow.
This is part of the Tax Update's series of 2009 year-end tax tips. Collect them all!
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Time to get serious on 2009 year-end tax planning
December 04, 2009
We're more than 90% done with 2009. What you do with the remaining 10% can have a lot to do with how happy you will be when taxes come due in April. Some items for your game plan:
Look at the scoreboard. You need to see what your taxable income is so far. Make special note of your business income and your capital gains. You can't know where you are going unless you know where you are.
What will happen between now and year end? Will you get a bonus? Will there be a big customer order paid before the end of the year? Do you have a big expense coming due?
What income and expense items can I switch between 2009 and 2010? These are key tax planning tools. Do you have a pending equipment purchase? Can you accelerate a bill collection to move income up if you want to? Can you sit on an invoice to defer collection? Do you have capital losses that you can take between now and the end of the year?
Have you done your gifting for the year? If you are charitably-minded, you might be able to do some year-end gifts to reduce your income. If you've had a bad year in your business, maybe 2010 is a better year to give to charity. If you have enough assets to make estate planning an issue, have you made full use of the $13,000 annual per-donee gift exclusion?
With these tools your tax pro can help you navigate the rest of the year. Decisions you should evaluate include:
- Payment of state and federal estimated taxes before year-end.
- Acceleration of capital asset purchases to reduce taxable income or maximize operating losses.
- Paying cash-basis business expenses before year-end.
- Using capital losses to offset year-to-date capital gains.
- Contribute to the College Savings Iowa Sec. 529 plan, if you are an Iowa taxpayer.
- Year-end charitable contributions of stock or appreciated property.
- Contributions to S corporation capital, or making loans to your S corporation, to ensure that you have basis to deduct corporate losses.
We'll be covering these and other year-end planning moves between now and year-end.
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The items included in the Tax Update Blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation.
Joe Kristan writes the Tax Update items, and any opinions expressed or implied are not neccesarily shared by anyone else at Roth & Company, P.C. Address questions or comments on Tax Updates to
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