The tax treatment of intangible assets
Intangible assets, such as patents, trademarks and goodwill, play a key role in businesses. The tax implications of intangibles can be complex, but businesses should understand them. IRS regulations require the capitalization of costs to 1) acquire or create intangibles; 2) create or enhance a separate, distinct intangible; 3) create or enhance a future benefit identified in IRS guidance as capitalizable; or 4) facilitate the acquisition or creation of intangibles. Capitalized costs can’t be deducted in the year paid or incurred. They must generally be ratably deducted over the asset’s life if they’re deductible. However, there are exceptions. Contact us with questions about intangibles.
Your guide to Medicare premiums and taxes
Medicare Part B medical insurance mainly covers doctors’ visits and outpatient services. Eligible individuals pay monthly premiums for the benefit. The premiums for the current year depend on the modified adjusted gross income (MAGI) reported on your Form 1040 for two years earlier. For 2025, most covered persons will pay the base monthly Part B premium of $185. Higher-income individuals pay a surcharge on top of that. For 2025, a surcharge applies if you: 1) filed unmarried for 2023 and reported MAGI above $106,000 that year or 2) filed jointly for 2023 and reported MAGI above $212,000 that year. For 2025, Part B monthly premiums and surcharges can be found on this web page.
Drive down your business taxes with local transportation cost deductions
Understanding how to deduct transportation costs could significantly reduce the tax burden on your small business. You and your employees likely incur various local transportation expenses each year, and they have tax implications. Let’s start by defining “local transportation.” It refers to travel when you aren’t away from your tax home long enough to require […]
FEDERAL COURT ENJOINS ENFORCEMENT OF THE CORPORATE TRANSPARENCY ACT “CTA” AND BENEFICIAL OWNER INFORMATION REPORT DEADLINE
Here is an update on the pending Beneficial Owner Information “BOI” reporting requirements. On December 3rd, United States District Court for the Eastern District of Texas issued a nationwide preliminary injunction in favor of the plaintiffs, Texas Top Cop Shop, Inc., et al. v. Garland, et al, which states that reporting companies need not comply with […]
FEDERAL COURT ENJOINS ENFORCEMENT OF THE CORPORATE TRANSPARENCY ACT AND BENEFICIAL OWNER INFORMATION REPORT DEADLINE
Published December 5, 2024 On December 3rd, United States District Court for the Eastern District of Texas issued a nationwide preliminary injunction in favor of the plaintiffs, Texas Top Cop Shop, Inc., et al. v. Garland, et al, which states that reporting companies need not comply with the CTA’s January 1, 2025 Beneficial Owner Information […]
Senior tax-saving alert: Make charitable donations from your IRA
Are you age 70½ or older and want to give to charity? You can make cash donations directly from your IRA to IRS-approved charities free of federal income tax. These are called qualified charitable distributions (QCDs). In contrast, other traditional IRA distributions are wholly or partially taxable. Unlike regular charitable donations, you can’t claim itemized deductions for QCDs. But they aren’t included in your adjusted gross income (AGI). That lowers the odds that you’ll be affected by unfavorable AGI-based rules or hit with the 3.8% net investment income tax. The annual QCD limit is now adjusted for inflation. In 2024, the limit is $105,000. In 2025, it will increase to $108,000.
ESOPs can help business owners with succession planning
An employee stock ownership plan (ESOP) is a type of qualified retirement plan that invests solely or mainly in the stock of the business sponsoring the plan. However, an ESOP can also help business owners with succession planning because it facilitates the gradual transfer of ownership shares to heirs or employees in a tax-advantaged manner. Contrast this with a buyout, which usually occurs suddenly and demands a substantial amount of cash to change hands. ESOPs do have their challenges. Only C or S corporations can create one, substantial administration and compliance costs are involved, and independent plan valuations must support ESOP transactions. Contact us for more information.
Healthy savings: How tax-smart HSAs can benefit your small business and employees
As a small business owner, managing health care costs for yourself and your employees can be challenging. One effective tool to consider adding is a Health Savings Account (HSA). HSAs offer a range of benefits that can help you save on health care expenses while providing valuable tax advantages. You may already have an HSA. […]
Family business focus: Taking it to the next level
Family businesses often start out small, with casual operational approaches. However, informal (or nonexistent) policies and procedures can become problematic as such companies grow. If you’re ready to take your company to the next level, take aim at these four areas: 1) Performance management; write job descriptions, provide training and implement an equitable employee performance management system. 2) Business processes; document and enhance every process to reduce manual effort and redundancies. 3) Strategic planning; build a leadership team, hold regular meetings and share goals with staff. 4) Information technology; work on integrating your systems and fortifying cybersecurity.
How inflation will affect your 2024 and 2025 tax bills
The IRS recently announced next year’s inflation-adjusted tax amounts. The 2025 standard deduction will increase to $15,000 for single taxpayers, $30,000 for married couples filing jointly and $22,500 for heads of household. This is up from the 2024 amounts of $14,600 for singles, $29,200 for joint filers and $21,900 for heads of household. For 2025, the highest tax rate of 37% will affect singles and heads of households with income exceeding $626,350 ($751,600 for joint filers). This is up from 2024 when the 37% rate affects single taxpayers and heads of households with income exceeding $609,350 ($731,200 for joint filers). The 2025 gift tax exclusion is $19,000, up from $18,000 in 2024.
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