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Entries from Roth & Company, P.C. tagged with 'year-end tax planning'
Tax Moves for the last day of 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...
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Year-end deductions: beware related parties
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...
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Year-end planning: S corporation health insurance
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...
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Year-end planning and the Iowa School Tuition Organization Credit
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...
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Playing the $13,000 Santa
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...
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The Newlywed Game, year-end tax planning edition!
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...
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Making sure you get that year-end deduction
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...
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Buy that car right now!
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?
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...
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Should you prepay your taxes due next year?
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...
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Don't buy somebody else's mutual fund tax liability
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...
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A college savings deduction just for Iowans
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:...
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S corporation basis: is it time for an S corporation holding company?
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...
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Year-end planning: Make sure you have enough basis to deduct your S corporation losses.
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...
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The Mid-Quarter trap
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...
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Fixed assets and year-end planning
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...
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Time to get serious on 2009 year-end tax planning
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...
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Charge those deductions!
Today is the last day for most 2008 tax deductions. If you use your credit card to pay for a deductible expense today, you can deduct it in 2008 even though you won't pay the credit card bill until 2009....
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Take your (capital loss) medicine!
If there is a silver lining to this year's cloudy stock market, it's that capital gains taxes will be optional for many of us this year. How can a capital gain tax be optional? You are likely to have capital...
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Don't stop giving now!
December 26 might not be the best time to say this, but it may be a good idea for you to do some more giving. This may seem like an odd statement. After all, estates valued up to $3.5 million...
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Extreme year-end tax planning: tie (or untie) the knot
As nice it is to save taxes, some folks consider other things more important. If you can believe that. But if your tax life is everything for you, extreme year-end planning strategies may come to mind For example, your marital...
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College Savings Iowa: a 529 with an Iowa tax bonus
Section 529 plans allow you to invest for future education expenses in an IRA-like account. The income accumulates tax-free, and it can be withdrawn tax-free for qualified education expenses. Iowa's state sponsored Section 529 plan, College Savings Iowa, provides an...
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Year-end property donations: worth the trouble?
Congress has been taking a lot of the zip out of donations of property to charity in recent years. Even so, a property donation can still be the most tax-efficient way to fulfill a charitable pledge before year-end. When you...
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Forbes: there will be no 2008 required minimum distribution waiver
Forbes reports that there will be no waiver for 2008 of the rules requiring minimum distributions from IRAs and retirement plans (via Kay Bell). There have been calls to waive the 2008 RMD requirement because of the stock market decline...
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When can I deduct a business expense?
Today at IowaBiz.com we cover the pressing issue, "When do I get to deduct the expense?" The post covers the timing of business expense deductions for business taxpayers: In general, if you are a cash-basis taxpayer, you have to pay...
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Using your retirement plan for charity?
Retirement plans are a tricky problem for income and estate tax planning. If you die with a retirement plan balance, it can be subject to estate tax, and your beneficiaries also have to pay income tax. These two taxes help...
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Is it time to start a retirement plan?
Self-employed taxpayers can get some great tax-savings opportunities via retirement plans. While SEP-IRAs the easiest type to set up, they aren't for everyone. If you have multiple employees, they provide very little flexibility. Also, a taxpayer with substantial self-employment income...
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Section 179 and year-end planning
For business taxpayers, adding new fixed assets can be one of the easiest ways of controlling taxable income at year end. Section 179 lets taxpayers deduct currently the cost of some assets that would otherwise have to be capitalized and...
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IRS guidance on year-end donations
Charitable giving is a big part of year-end tax planning. The IRS has posted a summary of tax rules governing charitable contributions (via the TaxProf). They have this to say about the always-popular gifts of household goods: For all donations...
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Does it make sense to prepay your taxes?
One of the oldest tax planning tricks in the book is paying in December state and local taxes that aren't due until next year. That way you get get the benefit of the deduction one year sooner. If it works,...
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Remember to take your 2008 required minimum distribution from your IRA
One of the most painful taxes is imposed on income you don't receive. If a taxpayer who has reached age 70 1/2 fails to take the "required minimum distribution" from an Individual Retirement Account, the law slaps a 50% tax...
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Plan for your single-member LLC to begin filing payroll tax returns
Year-end planning isn't just about reducing 2008 taxes. It's also about getting ready for 2009. One looming 2009 item is a new regulation that will require single-member limited liability companies to begin filing their own payroll tax returns. Single-member LLCs...
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Just because a fund is battered doesn't mean it has no capital gains
One traditional year-end tax blunder is the purchase of a mutual fund share just before it makes its required annual capital gain distributions. When you do this, you buy a year's worth of capital gain taxes for the privilege of...
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Year-end looms
The end of the year is four weeks away. That means we have four weeks to set right the tax mistakes of the last 48 weeks. This year has some unusual tax planning features. The uncertain economy makes folks reluctant...
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LAST DAY OF THE YEAR CHECKLIST
There's no extension for this deadline. The tax year ends at midnight tonight, and with it ends most of the best opportunities to reduce your 2007 taxes. If you are so inclined, here are a few things you can do...
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EXTREME YEAR-END TAX PLANNING
The Tax Update's 16-year old son is the bass player for a little jazz combo. They had their first wedding gig last night, which makes my romantic mind ponder whether the happy couple could have paid the band with their...
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CHARGE!
Yesterday's post explained how "the check is in the mail" rule works for getting deductions this year. But who uses checks anymore? All those new economy whippersnappers use credit or debit cards or online transfer services like Paypal to pay...
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YEAR-END DEDUCTIONS: IS THE CHECK IN THE MAIL?
Yesterday we talked about how "the check is in the mail" doesn't cut it for estate and gift tax purposes. Fortunately, a looser standard applies for income tax purposes. If a cash-basis taxpayer wants to claim a deduction for income...
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WHEN IS A GIFT COMPLETED?
So far in our 2007 year-end tax planning series, we've talked about things you have to do for year end. We haven't really talked that much about exactly how you get some things done. One area where getting something done...
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WHEN DO I HAVE TO PAY AN EXPENSE TO DEDUCT IT?
The headline of this post is one of the more common search phrases used to reach the Tax Update from search engines. The answer? As with so many things in the tax law, it depends. In general, if you are...
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PAY EXTRA TAX THIS YEAR? ARE YOU CRAZY?
Tax advisors spend a lot of time looking for ways to punt income into the hereafter. It almost feels like heresy to suggest accelerating income. Yet in some narrow circumstances paying extra tax this year can save you money. One...
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YEAR-END: MID-QUARTER?
One of the more obscure tax traps at year-end is the "mid-quarter convention." Normally the tax law computes depreciation on fixed assets as if they were placed in service in the middle of the year - the so-called "half-year convention."...
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CSI - NO, NOT THE TV SHOW
If you are an Iowan with college costs in your future, or even in your present, the College Savings Iowa Section 529 plan might be a good place to make a year-end tax planning move. Section 529 plans allow you...
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INDIVIDUAL RETIREMENT ACCOUNTS COME OUT IN THE WASH (SALE)
We mentioned the dangers of "wash sales" the other day. The wash sale rules disallow a loss on the sale of stock if you buy shares of the same stock within the thirty day periods before and after the day...
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THE $12,000 CHRISTMAS PRESENT
The income tax isn't the only tax that deserves holiday season attention. You still have 11 days to make a dent in your estate tax. Don't assume that Congress will deal wisely and responsibly with the estate tax. If they...
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WIN THE YEAR-END TAX GAME WITH LOSERS
This is the time of year when having clinkers in your stock portfolio isn't quite so painful. If you have capital gain for the year, you still have a few trading days to offset them by selling your loser stocks....
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YEAR-END GIVING: WHY APPRAISALS MATTER
Yesterday we mentioned the need to get "qualified appraisals" for charitable donations of property other than publicly-traded securities. The Tax Court issued a decision yesterday that illustrated our point. The Smith family of Scottsdale, Arizona ran an employee benefits firm...
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SHOULD YOU PREPAY YOUR STATE AND LOCAL TAXES?
Paying your state and local taxes early is one of the oldest tricks in the year-end tax planning book. If you are going to owe the state in April, you might as well take the deduction now, right? Maybe. While...
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DON'T BUY SOMEONE ELSE'S TAX BILL
It's not a good idea to spend your hard-earned money for the privilege of paying taxes on someone else's earnings. That means you should be careful if you buy mutual funds in December. The tax law requires mutual funds to...
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IS THIS THE YEAR TO SPEND YOUR IRA ON CHARITY?
A key tax break for charitable-minded taxpayers is scheduled to expire at the end of this year. If you are over age 70 1/2, you are eligible to transfer up to $100,000 from your IRA directly to charity. Such a...
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YEAR-END PLANNING: HURRY UP AND ADD FIXED ASSETS?
The tax law has always required taxpayers to expense long-lived assets over multiple years through depreciation deductions. These rules have had an important exception, Section 179, which lets you expense in the current year assets that would otherwise need to...
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IS A QUALIFIED PLAN A GOOD MOVE BY YEAR-END?
Most year-end tax planning moves require you to write a check before the end of the year to get a deduction. For business owners, there is one year-end tax planning move that doesn't need to be funded until as late...
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GOT BUSINESS LOSSES? GET BASIS
The dark cloud of business losses can have a silver lining of tax refunds. If you own a money-losing S corporation, you might even be able to eliminate all of your tax for this year and get back taxes from...
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IT'S DECEMBER. DO YOU KNOW WHERE YOUR TAXABLE INCOME IS?
Most of us have three weeks left in our taxable year. It's asking a lot of three weeks to cure the tax sins of the other 49, but there still may be time to pull it off. The place to...
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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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