Business owners should review options and eligibility for tax deductions now to better estimate their tax situation and plan ahead. The key deductions that will be reviewed are the qualified business income deduction, business losses, and business expenses. Qualified Business Deduction: The qualified business income deduction (“QBI”) allows eligible owners of pass-through entities (sole-proprietorships, partnerships, S-corporations, trusts, and estates) to deduct 20% of their qualified business income. The deduction will allow for a 20% deduction of qualified business income, plus 20% of qualified real estate investment trust (“REIT”) dividends and qualified publicly traded partnership (“P
The IRS has urged businesses to make estimated tax payments during the year to avoid owing money. Estimated tax is the method used to pay tax on income that is not subject to withholding. This will generally mean making quarterly estimated payments as income is earned or received during the year. The IRS coined the phrase “pay as you go, so you don’t owe”. Individuals, including sole proprietors, partners and S corporation shareholders, generally must make estimated tax payments if they expect to owe tax of $1,000 or more when they file their 2019 tax return. Corporations generally must make these payments if they expect to owe tax of $500 or more on their 2019 tax return. Estimated tax is
Section 179 deductions are not as ominous or complex as they may seem. In a nutshell, Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. That means that if you buy (or lease) a piece of qualifying equipment, you can deduct the full purchase price from your gross income. Section 179 is one of the few government incentives available to small businesses that provides substantial tax relief/benefits. To qualify, the equipment or software must be placed into service between January 1, 2019 and December 31, 2019. New or used equipment will qualify, so long as the used equipment is
6 Essentials of Estate Planning, Part 2: Beneficiary Designations, Healthcare Power of Attorney, and
Part 1 discussed wills/trusts, durable power of attorney, and letters of intent. This part will focus on the basics of the last 3 essential items (beneficiary designations, healthcare power of attorney, and guardianship designations). Beneficiary designations determine where any assets (e.g. 401(k), insurance) not mentioned or dictated in the will, will go. It is important to maintain a beneficiary and a contingent beneficiary on such accounts or plans. If a beneficiary is not named, deceased, or otherwise unable to serve as a beneficiary, a court may be left with the responsibility of determining the fate of the principal’s funds. It is also important to remember that beneficiaries must
Whether you are creating a plan for a large, complex estate or a small, modest estate, these 6 essentials should be included in your plan: will/trust, durable power of attorney, letter of intent, beneficiary designations, healthcare power of an attorney, and guardianship designations. Part 1 of this series will review the basics of the first three items listed (wills/trusts, durable power of attorney, and letters of intent). A will or trust is generally one of the main components of an estate plan, regardless of the amount of assets owned. A will ensures that property is distributed according to the intent or wishes of the grantor upon death. A trust is similar in operation; however, trus
