Our Accounting Articles
Have You Had Your Annual Estate Plan Checkup?
January 27, 2015
Have you reviewed your estate plan? Did you have any financial or family changes?
An annual estate plan checkup is critical to the health of your estate plan. Because various exclusion, exemption and deduction amounts are adjusted for inflation, they can change from year to year, impacting your plan:
Lifetime gift and estate tax exemption
- 2014: $5.34 million
- 2015: $5.43 million
Generation-skipping transfer tax exemption
- 2014: $5.34 million
- 2015: $5.43 million
Annual gift tax exclusion
- 2014: $14,000
- 2015: $14,000
Marital deduction for gifts to noncitizen spouse
- 2014: $145,000
- 2015: $147,000
You may need to update your estate plan based on these changes. But the beginning of the year isn’t the only time for an estate plan checkup. Whenever there are significant changes in your family — such as births, deaths, marriages or divorces — it’s a good idea to revisit your estate plan. Your plan also merits a look any time your financial situation changes significantly.
If you haven’t yet had your annual estate plan checkup, please contact us. Or, if you don’t yet have an estate plan, we can help you create one.
© 2015 Thomson Reuters/Tax & Accounting
3 Tax Extenders Credits for Businesses on Their 2014 Returns
January 20, 2015
The Tax Increase Prevention Act of 2014 (TIPA) extended through Dec. 31, 2014, a wide variety of tax breaks, including many tax credits — which are particularly valuable because they reduce taxes dollar-for-dollar. Here are three credits that businesses may benefit from when they file their 2014 returns:
1. The research credit. This credit (also commonly referred to as the “research and development” or “research and experimentation” credit) rewards businesses that increase their investments in research. The credit, generally equal to a portion of qualified research expenses, is complicated to calculate, but the tax savings can be substantial.
2. The Work Opportunity credit. This credit is available for hiring from certain disadvantaged groups, such as food stamp recipients, ex-felons and veterans who’ve been unemployed for four weeks or more. The maximum credit ranges from $2,400 for most groups to $9,600 for disabled veterans who’ve been unemployed for six months or more.
3. The Sec. 45L energy-efficient new home credit. An eligible construction contractor can claim a credit for each qualified new energy efficient home that the contractor built and that was acquired by a person from the contractor for use as a residence during 2014. The credit equals either $1,000 or $2,000 per unit depending on the projected level of fuel consumption.
Wondering if you qualify for any of these tax credits? Or what other breaks extended by TIPA could reduce your 2014 tax bill? Contact us!
© 2015 Thomson Reuters/Tax & Accounting
Tax Extenders: 3 Breaks for Individuals on Their 2014 Returns
January 13, 2015
On Dec. 19, the president signed into law the Tax Increase Prevention Act of 2014 (TIPA), which extended through Dec. 31, 2014, many valuable tax breaks that had expired at the end of 2013. Here are three that individuals may be able to take advantage of when filing their 2014 returns:
- State and local sales tax deduction. Individuals can take an itemized deduction for state and local sales taxes instead of for state and local income taxes. This option can be valuable for taxpayers who live in states with no or low income tax rates or purchase major items, such as a car or boat.
- Tuition and related expenses deduction. This above-the-line deduction for qualified higher education expenses may be beneficial to taxpayers who’re ineligible for education-related tax credits, though income-based limits also apply to the deduction.
- Home mortgage debt forgiveness exclusion. Discharge of indebtedness income from qualified principal residence debt, up to a $2 million limit ($1 million for married taxpayers filing separately), may be excluded from gross income.
To learn whether you qualify for these — or other breaks extended by TIPA — please contact us.
© 2014 Thomson Reuters/Tax & Accounting
You May Be Able to Save More in 2015 For Retirement
January 6, 2015
Many retirement plan contribution limits increase slightly in 2015; thus, you may have opportunities to increase your retirement savings:
Other factors may affect how much you can contribute (or how much your employer can contribute on your behalf). For example, income-based limits may reduce or even eliminate your ability to take advantage of IRAs. For more information on how to make the most of your tax-advantaged retirement-saving opportunities in 2015, please contact us.
© 2014 Thomson Reuters/Tax & Accounting
3 Extended Tax Breaks to Act on By Dec. 31st
December 30, 2014
On Dec. 16, the Senate passed the Tax Increase Prevention Act of 2014 (TIPA), which the House had passed on Dec. 3. TIPA extended many valuable tax breaks that expired at the end of 2013 — but only through Dec. 31, 2014.
Here are three types of extended tax breaks that you may want to take action on before year end:
- Small business stock gains exclusion. Gains realized on the sale or exchange of qualified small business (QSB) stock acquired in 2014 will be eligible for an exclusion of 100% if the stock has been held for at least five years. So you may want to consider purchasing QSB stock by Dec. 31.
- Tax-free IRA distributions to charities. Taxpayers age 70½ or older can make direct contributions from their IRA to qualified charitable organizations without incurring any income tax on the distribution, up to $100,000 for the 2014 tax year. You can even use the distribution to satisfy a required minimum distribution. But the distribution must be made by Dec. 31.
- Depreciation-related breaks. Businesses can enjoy larger 2014 deductions if they invest in property that qualifies for enhanced Section 179 expensing, 50% bonus depreciation, and/or accelerated depreciation for qualified leasehold-improvement, restaurant and retail-improvement property. But the property must be placed in service by Dec. 31.
Additional rules and limits apply to these breaks, so please contact us to find out which ones you can benefit from.
© 2014 Thomson Reuters/Tax & Accounting
Why You Should Make Annual Exclusion Gifts Before Dec. 31.
December 22, 2014
Why you should make annual exclusion gifts before year end 2014.
The 2014 gift tax annual exclusion allows you to give up to $14,000 per recipient tax-free without using up any of your lifetime gift tax exemption. If you and your spouse “split” the gift, you can give $28,000 per recipient.
The gifted assets are removed from your taxable estate, which can be especially advantageous if you expect them to appreciate. That’s because the future appreciation can avoid gift and estate taxes.
The exclusion is scheduled to remain at $14,000 ($28,000 for split gifts) in 2015. But that’s not a reason to skip making annual exclusion gifts this year. You need to use your 2014 exclusion by Dec. 31 or you’ll lose it.
The exclusion doesn’t carry from one year to the next. For example, if you don’t make an annual exclusion gift to your daughter this year, you can’t add $14,000 to your 2015 exclusion to make a $28,000 tax-free gift to her next year.
We can help you determine how to make the most of your 2014 gift tax annual exclusion.
© 2014 Thomson Reuters/Tax & Accounting