Proposed Regs Provided for Code Sec. 163(j) Limit
The IRS has proposed regulations on the limitation on the business
interest expense deduction under Code Sec. 163(j), as amended by
the Tax Cuts and Jobs Act (TCJA) ( P.L. 115-97). The IRS also has
is...
Deductions Denied to Medical Marijuana Dispensary
A nonprofit corporation that operated a medical-marijuana
dispensary legally under California law was not allowed to claim
deductions for business expenses on its federal return. Code Sec.
280E, which...
2019 Standard Mileage Rates Released
The IRS released the optional standard mileage rates for 2019. Most
taxpayers may use these rates to compute deductible costs of
operating vehicles for:...
Proposed Regs Address Foreign Tax Credit Changes
Highly anticipated foreign tax credit regulations have been issued
that provide guidance on the significant changes made to the
foreign tax credit rules by the Tax Cuts and Jobs Act ( P.L.
115-97)....
Guidance on 2019 Withholding Rules
The IRS has provided interim guidance for the 2019 calendar year on
income tax withholding from wages and withholding from retirement
and annuity distributions. In general, certain 2018 withholding
ru...
FAQ: How are LLCs taxed?
An LLC (limited liability company) is not a federal tax entity.
LLCs are organized under state law. LLCs are not specifically
mentioned in the Tax Code, and there are no special IRS regulations
govern...
IRS helps clarify new 3.8 Percent Surtax on Net Investment Income
The IRS has issued proposed reliance regulations on the 3.8 percent
surtax on net investment income (NII), enacted in the 2010 Health
Care and Education Reconciliation Act. The regulations are
propose...
How do I? Get the most from my inherited IRA?
Individual Retirement Accounts (IRAs) are popular retirement
savings vehicles that enable taxpayers to build their nest egg
slowly over the years and enjoy tax benefits as well. But what
happens to th...
Year-end planning: 3.8 percent Medicare tax looms for 2013
In 2013, a new and unique tax will take effect—a 3.8 percent
"unearned income Medicare contribution" tax as part of the
structure in place to pay for health care reform. The tax will be
imposed ...
New "repair" regulations continue to demand action
More than six months after the IRS issued temporary "repair"
regulations (T.D. 9564), many complex questions remain about their
interpretation and application. These regulations are sweeping in
their ...
Prepare to implement important provisions in the Affordable Care Act
When Congress passed the Patient Protection and Affordable Care Act
and its companion bill, the Health Care and Education
Reconciliation Act (collectively known as the Affordable Care Act)
in 2010, la...
Time for post-filing season checkup
Your 2011 tax return has been filed, or you have properly filed for
an extension. In either case, now it’s time to start thinking about
important post-filing season activities to save you tax in...
Countdown to Supreme Court’s health care decision
After three days of oral arguments in March, the Supreme Court is
deciding the fate of the Pension Protection and Affordable Care Act
(PPACA) and its companion law, the Health Care and Education
Recon...
FAQ: What is a family partnership?
The family partnership is a common device for reducing the overall
tax burden of family members. Family members who contribute
property or services to a partnership in exchange for partnership
interes...
Contemporaneous tax records: Are you keeping up?
Everybody knows that tax deductions aren't allowed without proof in
the form of documentation. What records are needed to "prove it" to
the IRS vary depending upon the type of deduction that you may w...
How do I? Amend a return
Sometimes in a rush to file your income tax return, you may
unintentionally overlook some income that had to be reported, or a
deduction that you should or should not have taken. Now
what? ...
How do I… Guard against taxpayer identity theft?
The number of tax return-related identity theft incidents has
almost doubled in the past three years to well over half a million
reported during 2011, according to a recent report by the Treasury
Insp...
Sweeping new IRS "repair regulations" impact most businesses
The IRS has released much-anticipated temporary and proposed
regulations on the capitalization of costs incurred for tangible
property. They impact how virtually any business writes off costs
that rep...
How do I...Claim a charitable contribution of property?
Claiming a charitable deduction for a cash contribution is
straightforward. The taxpayer claims the amount paid, whether by
cash, check, credit card or some other method, if the proper
records are mai...
How do I? Compute a 'substantial equal periodic payment'
Taxpayers who wish to withdraw funds from a retirement account such
as an IRA before they reach the age of 59 and a half, can do so
without their distributions becoming subject to the additional 10
pe...
IRS instructs auditors on economic substance doctrine
A transaction may comply with a literal reading of the Tax Code but
result in unreasonable tax consequences that are not intended by
the tax laws. To combat these transactions, the IRS has used for
ma...
Check status of a charity before making a contribution
Americans donate hundreds of millions of dollars every year to
charity. It is important that every donation be used as the donors
intended and that the charity is legitimate. The IRS oversees the
acti...
New broker-reporting rules: burden to brokers a boon to taxpayers?
As a result of recent changes in the law, many brokerage customers
will begin seeing something new when they gaze upon their 1099-B
forms early next year. In the past, of course, brokers were
re...
How Do I? Compute the tax due each year on an annuity
Many more retirees and others wanting guarantee income are looking
into annuities, especially given the recent experience of the
economic downturn. While the basic concept of an annuity is fairly
simp...
FAQ: What is a limited liability company?
A limited liability company (LLC) is a business entity created
under state law. Every state and the District of Columbia have LLC
statutes that govern the formation and operation of LLCs....
How Do I? Write Off Bad Business Debts
A business with a significant amount of receivables should evaluate
whether some of them may be written off as business bad debts. A
business taxpayer may deduct business bad debts if the receivable
b...
How Do I? Make an in-plan Roth IRA rollover?
In-plan Roth IRA rollovers are a relatively new creation, and as a
result many individuals are not aware of the rules. The Small
Business Jobs Act of 2010 made it possible for participants in
401(k...
How Do I: Substantiate business gifts to clients?
A business can deduct ordinary and necessary expenses paid or
incurred in carrying on any trade or business. The expense must be
reasonable and must be helpful to the business....
Calculating correct withholding and estimated tax
Correctly calculating your estimated tax payments and/or
withholding is even more important as the year end approaches.
Accurate calculations are especially important as third and fourth
quarter payme...
Common IRA contribution and distribution mistakes
Individual retirement accounts (IRAs) -- both traditional and Roth
IRAs -- are among the most popular retirement savings vehicles
today. Protecting the value of your IRA (and other retirement
accounts...
How Do I? Report interest from savings bonds?
U.S. Savings Bonds can be a relatively risk-free investment during
times of upheaval in the stock market, such as we are experiencing
now. There are two different types of savings bonds for tax
purpos...
FAQ: Can I deduct the costs incurred doing charitable work?
Q. I spend 20 hours every week cooking meals and delivering them to
an organization that feeds the hungry and homeless. Am I entitled
to a deduction for my time and the food I pay for out of my own
mo...
Planning for the 3.8 percent Medicare tax on investment income
The health care reform package (the Patient Protection and
Affordable Care Act and the Health Care and Education
Reconciliation Act of 2010) imposes a new 3.8 percent Medicare
contribution tax on the ...
FAQ: What constitutes income from the cancellation of debt?
Debt that a borrower no longer is liable for because it is
discharged by the lender can give rise to taxable income to the
borrower. Debt forgiveness income or cancellation of debt income
("COD" incom...
How Do I ... Convert a Traditional IRA to a Roth IRA?
People are buzzing about Roth Individual Retirement Accounts
(IRAs). Unlike traditional IRAs, "qualified" distributions from a
Roth IRA are tax-free, provided they are held for five years and
are made...
How Do I? Convert my traditional IRA to a Roth IRA?
Beginning in 2010, the income limitations that have prevented
taxpayers with modified adjusted gross incomes of $100,000 or more
and married taxpayers that filed their returns separately from
converti...
How Do I? Net capital gains and losses for year-end tax planning?
In order to effectively plan your investment transactions, you have
to understand how, under federal tax law, you need to net or
"offset" capital gains and losses that you experience. Netting your
cap...
FAQ: What if I owe taxes and can't pay the full amount?
If you have completed your tax return and you owe more money that
you can afford to pay in full, do not worry, you have many options.
While it is in your best interest to pay off as much of your tax
l...
FAQ: How does a 60-day loan from an IRA work?
Many taxpayers are looking for additional sources of cash during
these tough economic times. For many individuals, their Individual
Retirement Account (IRA) is one source of cash. You can withdraw
("b...
FAQ: What's the difference between an HSA, FSA and HRA?
To ease the pain of the ever-escalating costs of healthcare, many
employers provide certain tax-driven health benefits and plans to
their employees. To help employers understand the differences and
si...
FAQ: Are website development costs for my business deductible?
Like the Internet itself, the correct deductibility of a business's
website development costs is still in its formative stages. What is
fairly clear, however, is that it is highly unlikely that any si...
FAQ...Are alimony payments always deductible?
No. Generally, payments that qualify as alimony are included in the
recipient's gross income and are deducted from the payor's gross
income. However, not all payments between spouses qualify as
alimon...
FAQ: What if I receive an incorrect information return?
Information returns usually arrive in January or February and
consist of either Form 1099 or Form 1098. For some, they seem as
ubiquitous as their holiday mail in December. Form 1099s are
especially l...
How do I: Calculate gain on the sale of collectibles?
You've just disposed of a collectible item (or your entire
collection), such as an old coin, artwork, figurine, or even those
old baseball cards you somehow managed to keep away from the spokes
of you...
How Do I? Comply with the tax laws on household help
If you pay for domestic-type services in your home, you may be
considered a "domestic employer" for purposes of employment taxes.
As a domestic employer, you in turn may be required to report,
withhol...
FAQ: What is a Spousal IRA?
If you file a joint return and your taxable income is less than
that of your spouse, the "spousal" IRA rules may allow you to
contribute up to $5,000 in 2009 (or $6,000 if you are 50 or older)
to an i...
FAQ...Must I file a joint return if I'm married?
Just because you're married doesn't mean you have to file a joint
return. This is a common misconception along with thinking that
"married filing separately" applies to couples who are separated or
se...
How do I?…Set up a SEP
As a business owner you have likely heard about the tax advantages
of setting up a retirement plan for you and your employees. Many
small business owners, however, have also heard some of the horror
...
FAQ….Can a married couple own a sole proprietorship?
Q. My husband and I are thinking of starting a business. Can we
operate it as a sole proprietorship? A. No. When two or more people
own a business and share in the profits, they are partners. Only...
Making gifts to minors: How generosity can help ease your tax bill
Making gifts is a useful, and often overlooked, tax strategy.
However, when thinking about whether to make a gift, or gifts, to
your children or other minors, the tax consequences must be
evaluated ve...
Estate planning for retirement plan assets
Throughout all of our lives, we have been told that if we don't
want to work all of our life, we must plan ahead and save for
retirement. We have also been urged to seek professional guidance
to help ...
How do I? Compute my net worth
How much am I really worth? This is a question that has run through
most of our minds at one time or another. However, if you aren't an
accountant or mathematician, it may seem like an impossible numb...
Client FAQ - Gifts to employees
Q: The holidays are approaching and I would like to consider giving
gifts of appreciation to my employees. What kinds of gifts can I
give my employees that they would not have to declare as income on
...
Tax aspects of divorce and separation
When it comes to legal separation or divorce, there are many
complex situations to address. A divorcing couple faces many
important decisions and issues regarding alimony, child support,
and the fair ...
How Do I?... Compute financial ratios
How quickly could you convert your assets to cash if necessary? Do
you have a quantitative way to evaluate management's effectiveness?
Knowing your business' key financial ratios can provide valuabl...
Client FAQ: Buy or lease equipment?
Q. I've just started my own business and am having a hard time
deciding whether I should buy or lease the equipment I need before
I open my doors. What are some of the things I should consider when
m...
Control your company's travel expenses
As a business owner, you may dread reviewing the travel expense
reports from your employees returning from business trips. Airfare,
hotel and other costs for even a short trip can add up quickly.
How...
Internal controls and the small business owner
As you open the doors of your new business, the last thing on your
mind may be the potential for loss of profits through employee
oversight or theft - especially if you are the only employee.
However,...
Client FAQ: Starting a new business
Q. My company recently downsized its workforce and eliminated my
position. I thought this would be a good opportunity to start my
own consulting business in the same industry. What are some of the
t...
Is early retirement for you?
You're 57 years old and as part of an early retirement package,
you've just been offered a large cash bonus and salary
continuation, along with a lump sum payment from the company
retirement plan and ...
Your vacation home: Personal residence or rental property?
The benefits of owning a vacation home can go beyond rest and
relaxation. Understanding the special rules related to the tax
treatment of vacation homes can not only help you with your tax
planning, b...
Should your company operate as an LLC?
Limited liability companies (LLCs) remain one of the most popular
choice of business forms in the U.S. today. This form of business
entity is a hybrid that features the best characteristics of other
f...
Leasing property to your own business
Owning property (real or tangible) and leasing it to your business
can give you very favorable tax results, not to mention good
long-term benefits. There are some drawbacks, however, and you
should c...
Client FAQ - Documentation for charitable contributions
I have a car that I would like to donate to my church. Can I just
claim the amount shown as the value of the car per the Kelly Blue
Book (about $6,500) on Schedule A of Form 1040?...
Choosing the type of legal entity for your new business
The decision to start your own business comes with many other
important decisions. One of the first tasks you will encounter is
choosing the legal form of your new business. There are quite a few
choi...
Newsletters
Gary R. Zeigler, P.C.
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