Tax ramifications are different when selling the old vehicle and when trading it in for a new vehicle.
It’s normal that business owners will eventually replace vehicles used in their business. However, keep in mind that when replacing a business vehicle, the tax ramifications are different when selling the old vehicle and when trading it in for a new vehicle. If you sell the vehicle, the result is reported on your taxpayer’s return as an above-the-line gain or loss. Since a trade-in is treated as an exchange, any gain or loss is absorbed into the replacement vehicle’s depreciable basis, thereby avoiding any current taxable gain or reportable loss.
The IRS is now auditing to see if too much home equity debt interest is being deducted from your taxes.
Remember, equity debt is debt not incurred to acquire or improve the home and taxpayers frequently exceed the equity debt limit and fail to adjust their interest deduction accordingly. Normally, you are allowed to deduct the interest on up to $1 million of home acquisition debt which includes subsequent debt incurred to make improvements, but not repairs, and the interest on up to $100,000 of home equity debt.
Predict Your Future Social Security Income
Are you ignoring your future retirement needs? If you are younger, that’s probably the case since retirement is far in the future, and you think you have plenty of time to save for it. It’s not wise to ignore the issue until late in life and then have to scramble at the last minute to fund their retirement. Although some people actually ignore the issue altogether by thinking their Social Security income (assuming they qualify for it) will take care of their retirement needs.
Cut Your Taxes & Save on Energy Bills with Home Energy Credits
Recently passed legislation has given new life to two homeowner energy credits that had expired or were about to expire, providing renewed opportunities to homeowners wanting to take advantage of these credits and reduce their energy costs.
Take a look at the Pros & Con of Roth Conversions
The tax provision that allows taxpayers to convert a Traditional IRA to a Roth IRA is a great tax-planning tool when used properly, and timing is everything. Conversions can be tricky, so if you are considering a conversion, take a look at this article regarding conversion considerations or give our office a call and set up an appointment so we can help you properly analyze your conversion options.
How to identify Scams and Avoid Becoming a Victim
It’s natural for thieves to use the IRS and other government entities to ply their scams against the public through email and phone scams in order to steal your money. They can trick you into giving out your date of birth, account numbers, passwords and even your Social Security number!
These scams have reached epidemic proportions and this article will hopefully provide you with the knowledge to identify scams and avoid becoming a victim.
It’s the holiday season and that means it’s that time of year when the majority of charities start soliciting for year-end donations. And that means that it’s the perfect time of year when fake charities start showing up in force hoping to convince you to give them a monetary donation.
Take Advantage of Tax Breaks Now!
Once again, this year is similar to the last few years when it comes to year-end tax planning due to the uncertainty over whether Congress will extend any of the many expired or expiring tax provisions. However, this is not a reason to wait as tax savings can still be realized by taking advantage of tax breaks that are still on the books for 2015. The following tax breaks apply to both individuals and small businesses:
In 2014, Benjamin Miller from Indiana posted a tweet that included a picture of notice he received from the IRS indicating that he owes a penalty of $2,344 because he didn’t have health insurance. Needless to say, his tweet went viral and ignited a firestorm.
If you’re thinking about retiring or leaving your current employer, you would be required to take a distribution from your employer’s retirement plan. Depending upon the terms of the plan as well as your age, a distribution may not be required immediately. However, it is important that when you do have to take the distribution that you are aware of a potential number of tax pitfalls that you might incur.