Bad Debts – Family Loans If you made an ill-advised loan to a family member, the saving grace is that you’re allowed to claim a nonbusiness bad-debt deduction. Your write-off is considered a short-term capital loss. So you can use it to shelter your capital gains for the year. If the loss exceeds your gains […]
Art Donation Appreciation If you donate artwork that’s appreciated significantly, make sure you get the highest deduction available. You must clear a number of hurdles before you can write off the full market value of the contribution. Let’s say you bought a painting for $4,000 a few years ago that’s now valued at $10,000. Donating […]
The Rule Of 72 The Rule of 72 is a simple formula that lets you estimate how long it will take an investment to double at a stated interest rate. You simply divide 72 by the prevailing interest rate. For example, if you’re investing $1,000 at a 6% rate, it will take 12 years for […]
7 Most Dangerous Errors In Employee Handbooks An employee handbook can be the foundation of employee performance and a shield against lawsuits … or it can be a ticking time bomb that confuses employees and strips away your legal defenses. It all depends on how well it’s written and put to use. Too often, handbooks […]
Life Insurance & Irrevocable Trusts Beneficiaries usually pay no income tax on the death benefit payments. You must consider estate taxes because if you own a policy on your own life, the death benefits are included in your estate for federal estate – tax purposes unless the money goes to your surviving spouse (and he […]
Disability Insurance – Secure Tax Free Benefits Long term disability benefit payments are typically tax free when you, not your employer, pay the premiums. Even if you pay with after-tax dollars via payroll withholding from your own salary, you are considered to pay the premiums with your own money. The same treatment applies if you […]
Dependent Care Assistance You can take advantage of the annual exclusion of up to $5,000 paid under your company’s dependent care assistance plan. No more than 25% of the amounts paid or incurred during the year can go to shareholders or owners with an interest of more than 5% in the company.
De Minimus Benefits Any property or service with a relatively low value is excluded from tax on employees – including owners and partners. This includes occasional meals or supper money, local transportation when working late, holiday or birthday gifts, occasional sporting event tickets and traditional awards.
Athletic Facilities In The Office If you can build a gymnasium on the premises, you can limit the use of the facilities to the top brass and still qualify for tax exclusion. However, if you want to deduct the cost of the facility, you must make it available to all employees.
Lawsuit Settlements In the settlement document, they award to the prevailing party should not be described as a single lump sum. Taking the award as an all-inclusive amount will kill your opportunity to avoid taxes on significant portions of it. DESCRIBE SETTLEMENTS IN FAVORABLE TAX TERMS – Court-awarded reimbursements for medical expenses and personal injuries […]