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Tax Insights

When Partners Pay Expenses Related to the Business

June 3, 2024

It’s not unusual for a partner to incur expenses related to the partnership’s business. This is especially likely to occur in service partnerships such as an architecture or law firm.

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When Businesses May Want to Take a Contrary Approach With Income and Deductions

May 28, 2024

Businesses usually want to delay recognition of taxable income into future years and accelerate deductions into the current year.

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Don’t Have a Tax-Favored Retirement Plan? Set One Up Now

May 20, 2024

If your business doesn’t already have a retirement plan, it might be a good time to take the plunge. Current retirement plan rules allow for significant tax-deductible contributions.

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California Top Tax Rate for Wage Earners Increased to 14.4%

May 9, 2024

In the state of California, if you are the sole shareholder (other than your spouse) and officer of a corporation, you could save over $1,300 by electing to exclude your corporate wages from State Disability Insurance (SDI) withholding.

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Update on Retirement Account Required Minimum Distributions

April 29, 2024

If you have a tax-favored retirement account, including a traditional IRA, you’ll become exposed to the federal income tax required minimum distribution (RMD) rules after reaching a certain age.

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Coordinating Sec. 179 Tax Deductions With Bonus Depreciation

April 22, 2024

Your business should generally maximize current year depreciation write-offs for newly acquired assets. Two federal tax breaks can be a big help in achieving this goal: first-year Section 179 depreciation deductions and first-year bonus depreciation deductions. These two deductions can potentially allow businesses to write off some or all of their qualifying asset expenses in Year 1. However, they’re moving targets due to annual inflation adjustments and tax law changes that phase out bonus depreciation. With that in mind, here’s how to coordinate these write-offs for optimal tax-saving results.

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Keep These Three Issues in Mind After You File Your Return

April 15, 2024

The tax filing deadline for 2023 tax returns is April 15 this year. If you need more time, you can file for an extension until October 15. In either case, once your 2023 tax return has been successfully filed with the IRS, there may still be some issues to bear in mind. Here are three considerations.

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New Option for Unused Funds in a 529 College Savings Plan

April 8, 2024

With the high cost of college, many parents begin saving with 529 plans when their children are babies. Contributions to these plans aren’t tax deductible, but they grow tax deferred. Earnings used to pay qualified education expenses can be withdrawn tax-free. However, earnings used for other purposes may be subject to income tax plus a 10% penalty.

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