Generally, businesses are limited to deducting 50% of allowable meal and entertainment (M&E) expenses. But certain expenses are 100% deductible, including expenses: For food and beverages furnished at the workplace primarily for employees, Treated as employee compensation, That are excludable from employees’ income as de minimis fringe benefits, For recreational or social activities for employees, […]
Incentive stock options allow you to buy company stock in the future at a fixed price equal to or greater than the stock’s fair market value on the grant date. If the stock appreciates, you can buy shares at a price below what they’re then trading for. ISOs must comply with many rules but receive […]
The additional 0.9% Medicare tax applies to FICA wages and self-employment income exceeding $200,000 per year ($250,000 for married filing jointly and $125,000 for married filing separately). Unfortunately, the withholding rules have been tripping up some taxpayers, causing them to face an unexpected tax bill — plus interest and penalties — when they file their […]
When a company’s deductible expenses exceed its income, generally a net operating loss (NOL) occurs (though of course the specific rules are more complex). If when filing your 2014 income tax return you’ve found that your business had an NOL, there is an upside: tax benefits. When a business incurs a qualifying NOL, the loss […]
The IRS considers a paper return that’s due April 15 to be timely filed if it’s postmarked by midnight on April 15. But dropping your return in a mailbox on the 15th may not be sufficient. For example, let’s say you mail your return with a payment on April 15, but the envelope gets lost. […]
Generally, you’ll need to file a gift tax return for 2014 if, during the tax year, you made gifts: That exceeded the $14,000-per-recipient gift tax annual exclusion (other than to your U.S. citizen spouse), That you wish to split with your spouse to take advantage of your combined $28,000 annual exclusions, or Of future interests — […]
If your business has made repairs to tangible property, such as buildings, machinery, equipment and vehicles, you may be eligible for a deduction on your 2014 income tax return. But you must make sure they were truly “repairs,” and not actually “improvements.” Why? Costs incurred to improve tangible property must be depreciated over a period […]
Investment interest — interest on debt used to buy assets held for investment, such as margin debt used to buy securities — generally is deductible for both regular tax and alternative minimum tax purposes. But special rules apply that can make the deduction less beneficial than you might think. Your investment interest deduction is limited […]
If you don’t meet IRS substantiation requirements, your charitable deductions could be denied. To comply, generally you must obtain a contemporaneous written acknowledgment from the charity stating the amount of the donation, whether you received any goods or services in consideration for the donation, and the value of any such goods or services. If you […]
If you have a child in college, you may not qualify for the American Opportunity credit on your 2014 income tax return because your income is too high (modified adjusted gross income phaseout range of $80,000-$90,000; $160,000-$180,000 for joint filers), but your child might. The maximum credit, per student, is $2,500 per year for the […]
The manufacturers’ deduction, also called the “Section 199” or “domestic production activities” deduction, is 9% of the lesser of qualified production activities income or taxable income. The deduction is also limited to 50% of W-2 wages paid by the taxpayer that are allocable to domestic production gross receipts. Yes, the deduction is available to traditional manufacturers. But […]
You probably know that miles driven for business purposes can be deductible. But did you know that you might also be able to deduct miles driven for other purposes? The rates vary depending on the purpose and the year. Business: 56 cents (2014), 57.5 cents (2015) Medical: 23.5 cents (2014), 23 cents (2015) Moving: 23.5 […]