Do you or someone you know qualify for this loan forgiveness program.
Looking at year-end tax planning? The Protecting Americans from Tax Hikes (PATH) Act of 2015 passed last year finally gives businesses the opportunity to plan well ahead of year-end. If you own a business, the PATH Act of 2015 contained an extension of the 50% “bonus depreciation” and also made permanent the elective business expensing of eligible business property costs (up to $500,000).
For property placed in service after Dec. 31, 2015, bonus depreciation is available for qualified property that meets the following requirements:
- New MACRS property with a recovery period of 20 years or less, computer software, water utility property, and qualified improvement property;
- Original use must begin with the taxpayer; and
- Placed in service before Jan. 1, 2020.
Bonus depreciation may result in substantial present value tax savings for businesses that already had plans to purchase or construct qualified property. Unlike section 179 expensing, taxpayers do not need net income to take bonus depreciation deductions. Further, bonus is not limited to smaller businesses or capped at a certain dollar level, but it is not available for used property, property used outside of the US, tax-exempt use property, or tax-exempt financed property.
Contact us to review your options.
The Internal Revenue Service could be doing more to identify and examine taxpayers who may be deducting hobby losses to offset their actual income, according to a new report.
The report, from the Treasury Inspector General for Tax Administration, found that the IRS’s methods for identifying high-income taxpayers who may be offsetting their income with hobby losses do not maximize the use of all the relevant taxpayer information available to the IRS. When tax returns containing potential hobby losses are selected for audit, the examiners do not always address the hobby loss issues, according to the report.
TIGTA’s evaluation of IRS data from processing years 2011 through 2014 identified 9,699 individual returns from tax year 2013 that claimed a Schedule C loss of at least $20,000, gross receipts of $20,000 or less, and reported wages of at least $100,000. The taxpayers also reported losses in four consecutive years, for tax years 2010 to 2013. TIGTA’s review of a statistically valid sample of 100 tax returns determined that 88 of the returns showed an indication that the Schedule C businesses were not engaged in for profit. TIGTA estimates that 7,511 returns in the total sample population of taxpayers may have inappropriately used hobby loss expenses to reduce taxes by as much as $70.9 million for tax year 2013.
Be careful! There is a $100/day/employee penalty to employers if they reimburse employees for health insurance premiums. See the IRS FAQs
A year-end letter to our clients
Yes, we’re still waiting for action from Congress on extending some important tax provisions. Here’s the latest…