mike musson

Year-end tax planning with checklists and tips

Year-end tax planning could be especially productive this year because timely action could nail down a host of tax breaks that won’t be around next year unless Congress acts to extend them, which, at the present time, looks doubtful. These include, for individuals: the option to deduct state and local sales and use taxes instead of state and local income taxes; the above-the-line deduction for qualified higher education expenses; and tax-free distributions by those age 70-1/2 or older from IRAs for charitable purposes. For businesses, tax breaks that are available through the end of this year but won’t be around next year unless Congress acts include: 50% bonus first-year depreciation for most new machinery, equipment and software; an extraordinarily high $500,000 expensing limitation; the research tax credit; and the 15-year write-off for qualified leasehold improvements, qualified restaurant buildings and improvements and qualified retail improvements.

High-income-earners have other factors to keep in mind when mapping out year-end plans. For the first time, they have to take into account the 3.8% tax surtax on unearned income and the additional 0.9% Medicare (hospital insurance, or HI) tax that applies to individuals receiving wages with respect to employment in excess of $200,000 ($250,000 for […]

Increase in the Small Business Tax Credit

Under the Affordable Care Act (ACA), some small businesses may qualify for a small business tax credit. To be eligible, you must cover at least 50 percent of the cost of single (not family) health care coverage for each of your employees. You must also have 24 or fewer full-time equivalent employees and those employees must have average wages of less than $50,000 per year. In 2014, the tax credit goes up to 50 percent and will be available to qualified small businesses that purchase coverage through the new health insurance marketplaces in each state, called the Small Business Health Options Program (SHOP).

The SHOP marketplace will be open in October of 2013 for coverage that takes effect on January 1, 2014, or later.

For more info, click here. 

Written by Mike Musson, CPA, Partner LinkedIn Profile