Before this year, you could claim itemized deductions for medical expenses paid for you, your spouse and your dependents to the extent those expenses exceed 7.5% of your adjusted gross income (AGI). But the rules have changed for the worse in 2013 and beyond. Due to the 2010 Affordable Care Act, the old 7.5%-of-AGI [...]
IRA owners and beneficiaries who have reached age 70 ½ are permitted to make donations to IRS-approved public charities directly out of their IRAs. These so-called qualified charitable distributions, or QCD‘s are federal-income-tax-free to you, but you get no charitable deduction on your tax return. But,that is fine because the tax-free treatment of QCDs [...]
Many taxpayers make adjustments to their investment portfolio near year-end to take profits, to recognize tax losses to reallocate their assets, and for various other reasons. When making purchases of mutual funds near year-end, however, you should be wary of actually purchasing a tax liability. This is a danger: mutual funds must pay out their [...]
Higher income taxpayers beware. There is a new surtax to contend with. Originating as a component of 2010 health care legislation and first effective in 2013, the 3.8% net investment income tax (3.8% NIIT) is assessed on the lesser of net investment income (NII) or modified adjusted gross income (MAGI) above specific thresholds. The MAGI [...]
When choosing an entity for your business, keep in mind there are opportunities to use an S corporation to hold stock in other corporation to hold stock in other corporations, but not the stock of the S corporations. If any corporation acquires the S corporation’s stock, that S corporation becomes a C corporation, which is [...]
The at-risk rules may limit the amount of loss you can deduct from investment in your closely held corporation. The amount of loss a corporation may recognize from an activity is limited to the amount that is at risk for that activity at the close of the tax year. Any losses limited by the at-risk [...]