Do you have questions about taking IRA withdrawals? We’ve got answers
You can’t keep funds in your traditional IRA indefinitely. You must start taking withdrawals from a traditional IRA (including a SIMPLE IRA or SEP IRA) when you reach age 73. You must take your first RMD by April 1 of the year following the year in which you turn 73, regardless of whether you’re still employed. The RMD for any year is the account balance as of the end of the immediately preceding calendar year divided by a distribution period from the IRS’s “Uniform Lifetime Table.” If you take money out of a traditional IRA before age 59½, you may be subject to a 10% penalty tax and income tax on the distribution. Contact us with any questions.
Small business strategy: A heavy vehicle plus a home office equals tax savings
Your small business may be eligible for big first-year Section 179 depreciation tax deductions for new and used heavy SUVs, pickups and vans placed in service in 2025. You must use the vehicle more than 50% for business. The write-off will reduce your federal income tax and self-employment tax bill, if applicable. This tax break is only available for a purchased (not leased) SUV, pickup, or van with a manufacturer’s gross vehicle weight rating above 6,000 pounds. The 2025 limit on Sec. 179 deductions for heavy SUVs $31,300. First-year depreciation deductions for lighter vehicles are subject to smaller depreciation limits of up to $20,400 in 2024. (The 2025 amount hasn’t come out yet.)
NEWS UPDATE ON RECENT BENEFICIAL OWNER INFORMATION – FEBRUARY 10, 2025
The Department of Treasury through the Department of Justice has filed an appeal with the U.S. District Court for Eastern District of Texas on the Smith vs U.S. Department of Treasury case to overturn the preliminary reporting injunction. FINCEN posted an alert on its website that if the district court’s order is overturned and the […]
UPDATE ON RECENT SUPREME COURT RULING ON BOI – JANUARY 25, 2025.
On January 23rd the Supreme Court of the United States ruled to overturned the nationwide injunction on the Texas Top Cop v. McHenry case requiring entity’s to report Beneficial Owners Information ‘BOI” to Financial Crimes Enforcement Network “FINCEN”. FINCEN posted an alert on its website that the BOI reporting requirement is still VOLUNTARY as a […]
How companies can better control IT costs
Does your company keep blowing its information technology (IT) budget? You may be able to control these costs better through various proactive measures. First, establish a coherent IT philosophy to guide your spending and help you develop clear IT governance policies and procedures. Second, conduct regular IT audits. These are formal, systematic reviews of your IT infrastructure, policies, procedures and usage that can reveal redundant subscriptions, underused software and outdated hardware. Last, keep a close eye on the cloud services you pay for. Many businesses neglect to claim usage-based discounts or lower rates. Contact us for help better identifying and analyzing your IT costs.
Saving for college: Tax breaks and strategies your family should know
As college costs continue to rise, you may be concerned about how to save and pay for it. Tax-favored strategies may be available. For example, you can contribute to a 529 plan set up to meet a child’s or grandchild’s education expenses. Contributions aren’t deductible but earnings accumulate tax-free. Contributions are taxable gifts to the child and are eligible for the $19,000 gift tax exclusion in 2025. By taking advantage of a five-year gift tax election, a grandparent can contribute up to $95,000 ($19,000 × 5) per beneficiary this year, free of gift tax. Distributions of earnings that aren’t used for qualified expenses are subject to income tax plus a 10% penalty. Other rules apply.
How Section 1231 gains and losses affect business asset sales
When selling business assets, understanding the tax implications is crucial. One area to focus on is Section 1231 of the tax code, which governs the treatment of gains and losses. Sec. 1231 assets generally include 1) business real property (including land) that’s held for more than one year, 2) other depreciable business property that’s held for more than one year, 3) intangible assets that are amortizable and held for more than one year, and 4) certain livestock, timber, coal, domestic iron ore and unharvested crops. Gains and losses from selling Sec. 1231 assets receive favorable federal income tax treatment. We can help you plan the timing of gains and losses for optimal tax results.
Understanding the Work Opportunity Tax Credit
The unemployment rate was 4.2% in November. With today’s hiring challenges, the Work Opportunity Tax Credit (WOTC) may help employers. The WOTC is available to employers that hire workers from targeted groups who face significant barriers to employment. The credit is generally worth up to $2,400 for each eligible employee. The maximum credit amounts are different for some employees (certain veterans, long-term family assistance recipients and summer youth employees). The job applicant and the employer must complete a pre-screening notice on or before the day a job offer is made.
Maximize your 401(k) in 2025: Smart strategies for a secure retirement
If your employer offers a 401(k) plan, contributing to it is a smart way to build a nice nest egg. Consider increasing the amount in 2025 if you’re not already contributing the maximum allowed. With a 401(k), an employee elects to have a certain amount of pay deferred and contributed to a plan by an employer on his or her behalf. The 2025 contribution limit is $23,500. Employees age 50 or older by year end are also generally permitted to make additional catch-up contributions of $7,500. However, under a law change that becomes effective in 2025, 401(k) plan participants of certain ages can save more. The catch-up contribution amount for those who are age 60, 61, 62 or 63 in 2025 is $11,250.
Operating as a C corporation: Weigh the benefits and drawbacks
When deciding on the best business structure, one option is a C corporation. There are pros and cons to doing business this way. For example, a C corporation allows a business to be taxed separately from you as the owner. The corporate tax rate is currently 21%, which is lower than the highest 37% noncorporate tax rate. One potential disadvantage: Earnings can be subject to double tax, once at the corporate level and again when distributed to you. One big advantage is the liability protection a C corporation offers. Shareholders aren’t personally liable for the corporation’s debts and liabilities. So personal assets are generally protected if the corporation faces legal issues or bankruptcy.
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