Berdon Blogs

TAX TALK: What You Need to Know about 2017 Year-End Charitable Giving

Posted by Michael Eagan, J.D., LL.M. on Dec 18, 2017 9:18:00 AM

Here are some important considerations to keep in mind this year to ensure you receive the tax benefits you desire.

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Topics: TAX TALK

TAX TALK: First Quarter 2018 Deadlines for Businesses and Other Employers

Posted by Michael Eagan, J.D., LL.M. on Dec 11, 2017 9:18:00 AM

Here are some of the key tax-related deadlines affecting businesses and other employers during the first quarter of 2018.  Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. Contact us to ensure you’re meeting all applicable deadlines and to learn more about the filing requirements.

January 31

  • File 2017 Forms W-2, “Wage and Tax Statement,” with the Social Security Administration and provide copies to your employees.
  • Provide copies of 2017 Forms 1099-MISC, “Miscellaneous Income,” to recipients of income from your business where required.
  • File 2017 Forms 1099-MISC reporting nonemployee compensation payments in Box 7 with the IRS.
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Topics: TAX TALK

TAX TALK: Higher-Bracket Taxpayers can Take Advantage of 0% Long-Term Gains Rate

Posted by Michael Eagan, J.D., LL.M. on Dec 4, 2017 9:18:00 AM

We’re in the giving season, and if making financial gifts to your loved ones is part of your plans — or if you’d simply like to reduce your capital gains tax — consider giving appreciated stock instead of cash this year. Doing so might allow you to eliminate all federal tax liability on the appreciation, or at least significantly reduce it.

Leveraging Lower Rates

Investors generally are subject to a 15% tax rate on their long-term capital gains (20% if they’re in the top ordinary income tax bracket of 39.6%). But the long-term capital gains rate is 0% for gain that would be taxed at 10% or 15% based on the taxpayer’s ordinary-income rate.

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Topics: TAX TALK

TAX TALK: RMDs May Be On your Year End to-do List

Posted by Michael Eagan, J.D., LL.M. on Nov 27, 2017 9:20:00 AM

As the end of the year approaches, for taxpayers “of a certain age” with a tax-advantaged retirement account, as well as younger taxpayers who’ve inherited such an account, there may be one more thing that’s critical on your year end to do list: Take required minimum distributions (RMDs).

Risking a Huge Penalty

After you reach age 70½, you generally must take annual RMDs from your:

  • IRAs (except Roth IRAs), and
  • Defined contribution plans, such as 401(k) plans (unless you’re still an employee and not a 5%-or-greater shareholder of the employer sponsoring the plan).
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Topics: TAX TALK

TAX TALK: Accelerating Your Property Tax Payment into 2017 May Be Especially Beneficial

Posted by Michael Eagan, J.D., LL.M. on Nov 20, 2017 9:17:00 AM

Accelerating deductible expenses, such as property tax on your home, into the current year typically is a good idea. Why? It will defer tax, which usually is beneficial. Prepaying property tax may be especially beneficial this year, because proposed tax legislation might reduce or eliminate the benefit of the property tax deduction beginning in 2018.

Proposed Changes

The initial version of the House tax bill would cap the property tax deduction for individuals at $10,000. The initial version of the Senate tax bill would eliminate the property tax deduction for individuals altogether.

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Topics: TAX TALK

TAX TALK: 2017 Might be Your Last Chance to Hire Veterans and Claim a Tax Credit

Posted by Michael Eagan, J.D., LL.M. on Nov 13, 2017 11:40:00 AM

With Veterans Day just over, it’s an especially good time to think about ways we can support our veterans.  One way for businesses is to hire them. The Work Opportunity Tax Credit (WOTC) can help businesses do just that, but it may not be available for hires made after this year.

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Topics: TAX TALK

TAX TALK: Ins and Outs of Tax on “Income Investments”

Posted by Michael Eagan, J.D., LL.M. on Nov 6, 2017 11:35:00 AM

Many investors, especially those who are risk-averse, hold much of their portfolios in “income investments” — those that pay interest or dividends, with less emphasis on growth in value. But all income investments aren’t alike when it comes to taxes. So it’s important to be aware of the different tax treatments when managing your income investments.

Varying Tax Treatment

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Topics: TAX TALK

TAX TALK: Self-Employed Retirement Plans

Posted by Hal Zemel, CPA, J.D., LL.M. on Oct 30, 2017 9:17:00 AM

If you are self-employed you may be able to set up a retirement plan that allows you to contribute much more than you can contribute to an Individual Retirement Account (“IRA”) or even an employer-sponsored 401(k). There is still time to set up such a plan for 2017, and it generally is easy to do. So whether you are a “full-time” independent contractor or you are employed but earn some self-employment income on the side, consider setting up one of the following types of retirement plans this 2017.

Profit-sharing Plan

This is a defined contribution plan that allows discretionary employer contributions and flexibility in plan design. You can make deductible 2017 contributions as late as the due date of your 2017 tax return, including extensions — provided your plan exists on Dec. 31, 2017.

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Topics: TAX TALK

TAX TALK: Two ACA Taxes that May Impact Your Executive Compensation

Posted by Hal Zemel, CPA, J.D., LL.M. on Oct 23, 2017 12:19:09 PM

If you’re an executive or other key employee, you might be rewarded with restricted stock, stock options, or nonqualified deferred compensation (NQDC). Tax planning for these forms of executive compensation is generally more complicated than for salaries, bonuses, and traditional employee benefits. And planning gets even more complicated if you could potentially be subject to two taxes under the Affordable Care Act (ACA):

1) the additional 0.9% Medicare tax, and

2) the net investment income tax (NIIT)

These taxes apply when certain income exceeds the applicable threshold: $250,000 for married filing jointly, $125,000 for married filing separately, and $200,000 for other taxpayers.

Additional Medicare Tax

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Topics: TAX TALK

TAX TALK: Accelerate Your Retirement Savings with a Cash Balance Plan

Posted by Hal Zemel, CPA, J.D., LL.M. on Oct 16, 2017 9:18:00 AM

If you are a business owner, you may not be able to set aside as much as you’d like in tax-advantaged retirement plans. Typically, you’re older and more highly compensated than your employees, but restrictions on contributions to 401(k) and profit-sharing plans can hamper retirement-planning efforts. One solution may be a cash balance plan.

Defined Benefit Plan with a Twist

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Topics: TAX TALK

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