When you’re setting up partnership and LLC operating agreements–including for multi-member LLCs, which are treated as partnerships for tax purposes, there are a few key issues to include in your agreement to keep your business in line with federal tax law. Spell out guaranteed payments to partners A guaranteed payment is one made by a […]

Timing plays a pivotal role in financial reporting. Under accrual-basis accounting, the end of the accounting period acts as a “cutoff” for recognizing revenue and expenses. However, some companies may be tempted to manipulate timing–especially at the end of the year–to boost financial results or reduce taxes. Understanding end-of-period cutoffs  According to U.S. Generally Accepted […]

In 2023, EVs accounted for 7.6% of the US vehicle market, according to Kelley Blue Book, up from 5.9% in 2022.  As electric vehicles (EVs) continue to grow in popularity, incentives like the Clean Vehicle Tax Credit are helping more people make the switch. Created under the Inflation Reduction Act, this $7,500 credit applies to […]

With the arrival of fall, it’s the perfect time to take action and possibly lower your tax bill for this year and 2025.  First, you need to decide whether you’ll take the standard deduction or itemize for 2024. You might skip itemizing, given the 2024 standard deduction amounts are relatively high–$29,200 for joint filers, $14,600 […]

With the third estimated tax payment behind us, it’s time for small businesses to focus on year-end tax planning.  Proactive steps now can help lower your taxes for this year and next. Common strategies include deferring income and accelerating deductions, or bunching deductible expenses to maximize their value.  However, if you expect to be in […]

High-income earners may face additional taxes: the 3.8% Net Investment Income Tax (NIIT) and a 0.9% additional Medicare tax on wages and self-employment income. Let’s explore the potential impact these taxes could have on you How the NIIT impacts high-income earners In addition to income tax, the NIIT applies to net investment income if your […]

Buying a business with co-owners or already sharing the reins? A buy-sell agreement isn’t just a smart move–it’s essential. It gives you a more flexible ownership stake, prevents unwanted changes in ownership, and avoids potential IRS complications.  The basics There are two main types of buy-sell agreements: cross-purchase and redemption agreements (also known as liquidation […]

Believe it or not, there are effective strategies to generate income and gains without triggering federal income tax. Here are some tips to keep your money in your pocket, tax-free: Roth IRAs  Roth IRAs are among the most powerful tools for generating tax-free income. Unlike traditional IRAs, qualified withdrawals from a Roth IRA are exempt […]

A 2019 change to tax law ended the “stretch IRAs” strategy for most inherited IRAs. This means that beneficiaries now have 10 years to withdraw all of the funds. Since then, there’s been a lot of confusion about required minimum distributions (RMDs). Thankfully, the IRS has now issued final regulations clarifying the “10-year rule” for […]