The IRS reminds taxpayers that they still have time to contribute to an IRA for 2016 and, in many cases, qualify for a deduction or even a tax credit. Available since the mid 70s, individual retirement arrangements (IRAs) enable employees and the self-employed to save for retirement. Contributions to traditional IRAs are often deductible, but distributions, usually after age 59½, are generally taxable.
Archive for the ‘Tax deduction’ Category
If you’re planning to make significant charitable donations in the coming year, consider a donor-advised fund (DAF). These accounts allow you to take a charitable income tax deduction immediately, while deferring decisions about how much to give — and to whom — until the time is right. (more…)
Business owners, especially those who operate in corporate form, need to realize that there is a difference between advancing business funds to cover anticipated expenses and being entitled to a deduction for those expenses. A married couple who held partial interests in a corporation learned that difference to their detriment recently in the Tax Court (Aleamoni, TC Summary Opinion 2016-21) when they were not allowed to deduct advances they made to the corporation as business expenses on their Schedules C. The court held that the advances were investments and not expenses the taxpayers incurred in carrying on a trade or business. (more…)
IRS issues 2016 auto and truck maximum FMVs for cents-per-mile/fleet-average valuation
The IRS has issued the maximum fair market value (FMV) amounts that trigger certain valuation rule for employers calculating fringe benefit income from employer-provided automobiles, trucks, and vans first made available for personal use in 2016 (Notice 2016-12). (more…)