Smart Tax, Business & Planning Ideas from your Trusted Business Advisor in Virginia Beach
Prepare Your Kids for Financial Independence
This conversation can begin when children are very young—even before they start kindergarten. Give each child a piggy bank, which might hold spare change and even dollar bills. Once the children reach the age when they start learning counting skills, you can explain how five pennies make a nickel, two nickels make a dime, and so on, until you have dollars that can buy things in a store.
Parents also can open up bank accounts for youngsters; banks may have low or no minimums for children’s savings accounts. Parents can take their kids to the bank to make deposits and show them the results on bank statements. If the child’s account earns interest, that can offer another teaching opportunity. For more ideas as children grow older, read this month’s newsletter.
New IRS Ruling May Rescue Estate Plans
President Trump’s campaign promise to abolish the federal estate tax may or may not be realized. Meanwhile, the “death tax” still exists, and it continues to be a major concern for high net-worth taxpayers, including the owners of successful small companies.
IRS Revenue Procedure 2017-34, effective June 9, 2017, provides relief when a deceased spouse’s executor fails to make a timely portability election. The revenue procedure sets out a simplified method for requesting an extension of time to executors of certain estates of decedents who died after 2010 to make the election.
The new extension is permanent but applies only to estates of decedents who died after 2010, survived by a spouse, that are otherwise not required to file an estate tax return, except to make the portability election. In cases in which the surviving spouse died before a portability election was made, and the surviving spouse’s estate paid federal estate tax, a tax refund may result. Learn how to double the extension, file the form and how business owners are affected.
Tax Court Approves 100% Business Meal Deduction
Many business owners, self-employed individuals, and other taxpayers are aware that business meals and entertainment expenses are only 50% deductible. Did you know that some business meals can be fully deductible? The Tax Court recently overruled the IRS in a case regarding the pro hockey team, the Boston Bruins (Jacobs v. Commissioner, 148 T.C. No. 24, 6/26/17). Although the IRS claimed tax deficiencies totaling about $85,000 over two years’ tax returns, the court sided with the team’s owners and allowed 100% deductions for meal costs. Here are five tests that need to be met for you to quality for 100% deductions.
Use our handy tax calendar for upcoming tax dates in October and November of 2017.
Stephen Merritt is a full-service accounting and cpa firm in Virginia Beach offering tax preparation and accounting services for small to medium-sized businesses and their families. Our accounting services and tax services include QuickBooks training; Financial Statements preparation; Compilations, Reviews and Audits; individual, corporate and payroll tax return preparation; and new business formation. Give us a call at 757-420-5778 today for more information, or email us now.