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Streamlined Installment Agreements: The Pros And Cons

Venar Ayar, IRS Streamlined Installment Agreements
More Taxpayers Now Qualify Under the Temporarily Expanded Program

IRS agents are determined to take your money. At least they are also determined to make it fairly easy to pay. You just have to know the right places to look, and in many cases, an IRS streamlined installment agreement may be just the ticket.

Three times since 2012, the government has significantly expanded this program. But all good things must come to an end. When the sun sets on the current expansion in September 2018, that may be the end of this particular good thing. My mother always said that you should strike while the iron is hot. She usually gave pretty good advice, and her suggestion may be relevant here.

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7 Ways To Prepare Your Business For A Sale

William Rogers, 7 Ways To Prepare Your Business For A Sale

For some business owners, succession planning is a complex and delicate matter involving family members and a long, gradual transition out of the company. Others simply sell the business and move on. There are many variations in between, of course, but if you’re leaning toward a business sale, here are seven ways to prepare:

1. Develop or renew your business plan. Identify the challenges and opportunities of your company and explain how and why it’s ready for a sale. Address what distinguishes your business from the competition, and include a viable strategy that speaks to sustainable growth.

2. Ensure you have a solid management team. You should have a management team in place that’s, essentially, a redundancy of you. Your leaders should have the vision and know-how to keep the company moving forward without disruption during and after a sale.

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IRS: Summer Tips For Temporary Jobs, Marriage, Deductions And Credits

IRS, IRS Tips

Before starting a summer job, taking a vacation or sending the kids off to camp, the Internal Revenue Service wants taxpayers to know that some summertime activities may qualify for tax credits or deductions. The IRS also recommends that taxpayers check the amount of their withholding taxes now to help avoid surprises next filing season.

Here are some tips from the IRS that may help taxpayers lower taxes and avoid issues with their taxes:

  1. Worker classification matters.  As with other workers, business owners must correctly determine whether summer workers are employees or independent contractors. Independent contractors are not subject to withholding, making them responsible for paying their own income taxes plus Social Security and Medicare taxes. Workers can avoid higher tax bills and lost benefits if they know their proper status.
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How Some High-Income Taxpayers Can Maximize The New 20% Pass-through Business Deduction

Charles Woodson, Tax Advisor

Taxpayers with higher 1040 taxable incomes who are self-employed but are not “specified service businesses” may find it beneficial to structure new businesses, or restructure an existing business, as an S corporation to avoid taxable income limitations that apply to the new 20% Sec. 199A pass-through deduction.

To make up for the tax reform’s reduction of the C corporation tax rate to 21%, from which other forms of business activities do not benefit, Congress created a new deduction and code section: 199A. The 199A deduction is for taxpayers with other business activities – such as sole proprietorships, rentals, partnerships and S corporations – since, unlike C corporations, which are directly taxed on their profits, the income from the other business activities flows through to the owner’s tax return and is taxed at the individual level, i.e., at the individual’s tax rate, which can be as high as 37%.

This new Sec. 199A deduction is 20% of the pass-through income from these business activities. But not every owner of these flow-through businesses will benefit from this deduction because, as in all things tax, there are limitations.

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TaxConnections Gift: Motivational Inspirations eBook

TaxConnections, Motivational Inspirations eBook

We are inspired by the number of tax and financial executives,  and CEOs of companies all over the world who visit TaxConnections to find a tax professional and ask tax questions. TaxConnections Members receive the attention of CEOs in Asia, Australia, Brazil, Canada China, India, Greece, Japan, Mexico, Singapore, Switzerland, Netherlands, Thailand, Russia and the United Kingdom(to name a few) who visit our site to gain the advice of tax experts worldwide.

In addition, TaxConnections Executive Search Services Division has conducted more than one thousand tax executive searches over the years. One of the many things I learned from CFO clients who retained us to conduct searches for tax experts you should learn. CEOs and CFOs search for tax experts who can break tax down into a simple language they can understand; they need a strong tax coach on their management team. They also want to find a tax professional who inspires and motivates a tax team to productivity.

TaxConnections Motivational Inspirations eBook is our gift to you to help inspire a new generation of tax professionals coming into the profession.

Click To Receive TaxConnections Motivational Inspirations eBook

 

 

IRS Clarifies Interest On Home Equity Loans Can Still Be Deductible

Lisa Nason, Interest On Home Equity Loans

In an Information Release, IRS has announced that in many cases, taxpayers can continue to deduct interest paid on home equity loans under the recently enacted Tax Cuts and Jobs Act.

Taxpayers may deduct interest on mortgage debt that is “acquisition debt.” Acquisition debt means debt that is: (1) secured by the taxpayer’s principal home and/or a second home, and (2) incurred in acquiring, constructing, or substantially improving the home. This rule hasn’t been changed by the Tax Cuts and Jobs Act.

Under pre-Tax Cuts and Jobs Act law, the maximum amount that was treated as acquisition debt for the purpose of deducting interest was $1 million ($500,000 for marrieds filing separately). Under the Tax Cuts and Jobs Act, for tax years beginning after Dec. 31, 2017 and before Jan. 1, 2026, the limit on acquisition debt is reduced to $750,000 ($375,000 for a married taxpayer filing separately).

Under the Tax Cuts and Jobs Act, for tax years beginning after Dec. 31, 2017 and before Jan. 1, 2026, there is no longer a deduction for interest on “home equity debt.” The elimination of the deduction for interest on home equity debt applies regardless of when the home equity debt was incurred.

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Senior Vice President Tax – Family Office (Los Angeles, CA)

VP Tax Job, Tax Executive Search

Our retained search client is a global private family office that actively manages a global diversified portfolio of investments (including private equity and real estate), is seeking to hire a Senior Vice President, Tax. This executive will oversee the company’s global tax function and all matters concerning tax planning and strategy. The Senior VP Tax must have strong pass-through tax experience with M&A experience a plus. This is an exciting position with a direct impact on the success of the family office business operations as a whole.

• Responsible for global tax planning and compliance; reviewing and filing of all domestic and international corporate, personal, partnership and other income and indirect tax returns; implementing and managing company’s income tax and indirect tax compliance activities

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Senior Tax Manager/ International Tax  (Rutherford, New Jersey)

Position is responsible for providing technical tax leadership, with an emphasis on international tax. Position is responsible for international tax matters for the Americas consolidated group including preparation and/or review of international portions of the consolidated tax provision, preparation and/or review of international reporting requirements for the US consolidated return and transfer pricing. Transfer pricing responsibilities include managing documentation processes, preparation and review of various analyses, providing guidance to Brand Finance and Operations teams and intensive interaction with HQ transfer pricing team. Responsible for transfer pricing in a complex inbound, multinational group. Position is responsible for ensuring timely compliance and reporting by the international affiliates in the group for both income and transaction taxes. Highly visible position especially regarding transfer pricing. Significant interaction with the business as well as accounting teams.

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Tax Job – Tax Manager/ Partnerships – Northern California

Tax Manager/Partnerships (San Francisco Bay Area, CA)

The Tax Manager role requires partnership, S corp and individual tax consulting experience and the skills to effectively diagnose clients’ needs in order to develop and implement solutions. Primary responsibilities involve providing tax compliance, tax accounting, tax research and planning on partnerships, s corps and individual tax return for sophisticated clientele. We will build upon your technical strengths in order to expand your expertise in partnership, s corp and individual taxation. Our firm builds well-rounded tax experts to serve a myriad of client needs which leads to continued professional growth. Our culture is to develop trusted tax advisors with sound judgement with the highest ethical standards in the profession. The Tax Manager/Partnerships will be responsible for a range of projects including:

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Tax Professionals – Tax Question Of The Week

Tax Question, TaxConnections

Every Friday we post one question from our Ask Tax Question feature and invite our tax professional audience to help our visitor. The Tax Question this week is as follows:

I just inherited the equivalent in foreign currency of ~ US$115K so I need to file Form 3520 and would like to wire transfer most of it from my foreign account into my US bank account. Can I file F 3520 right away? Do I have to wait until 2019 to do it?

Tax Professionals – We encourage you to leave your comments!

 

 

Income Shifting Strategies For Business Owners

Haik Chilingaryan, Income Shifting Strategies For Business Owners

This post discusses different strategies that can potentially help a business owner become more tax efficient. Some methods include the restructuring of a business and establishing tax-deductible retirement plans.

Synopsis

The concept of characterization of income (or shifting of income) may result in the preservation of significant wealth. One method of shifting of income is through retirement planning. Another method is the restructuring of a business entity.

Retirement Planning

If the taxpayer is working and participating in a 401K with his employer, or he has an IRA, meaning it’s funded entirely by the taxpayer, the money that goes into such accounts may save him on taxes.

When the taxpayer puts money in such plans, he decides that instead of paying taxes now, he will instead pay taxes when he take those funds out, preferably when his tax brackets are likely to be reduced at his retirement. That’s because his total taxable income is likely to be lowered since he is no longer working, thereby lessening his income tax obligations.

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College Education Tax Credits: Did You Know About These?

Charles Woodson, College Education Tax Credits

There are actually two higher-education tax credits. The American Opportunity Tax Credit (AOTC) provides up to $2,500 worth of credit for each student, 40% of which is refundable. The credit is equal to 100% of the first $2,000 of college tuition and qualified expenses and 25% of the next $2,000. The AOTC only applies to the first 4 years of post-secondary education.

The other credit is the Lifetime Learning Credit (LLC), which only provides a maximum $2,000 of credit (20% of up to $10,000 of eligible expenses) per family. None of it is refundable, meaning it can only be used to offset the taxpayer’s tax liability, and any additional credit amount is lost.

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