You’ve probably seen or heard ads urging you to donate your car to charity. “Make a difference and receive tax savings,” one organization states.
But donating a vehicle may not result in a big tax deduction — or any deduction at all.
Following Up on FDII Changes from March 2019
Jen: This is the PKF Texas Entrepreneur’s Playbook. I’m Jen Lemanski, and I’m back again with Frank Landreneau, one of our International Tax Directors. Frank, welcome back to The Playbook.
Frank: Thanks. It’s exciting to be back.
Jen: I know there’s been some new changes to the Foreign-Derived Intangible Income, or FDII, as we’ve been calling it, that released in early March. What do we need to know about the new changes?
Frank: That’s right. Even though it’s interesting about this new tax law is that, even though it was passed a little over a year ago, guidance is still trickling in. Even though a law has been on the books, usually you do planning on a go-forward basis. There is some planning to go back and see about opportunities you may not have had.
How Associations Can Preserve Tax-Exempt Status by Avoiding Certain Activities
Not-for-profit trade associations, or 501(c)(6) organizations, exist to promote their members’ common interests and improve business conditions or “one or more lines of interest.” Whether the association is a local chamber of commerce, a real estate board or a large professional group, associations’ tax-exempt status is contingent on their sponsoring certain types of activities — and avoiding others.
When they fail to do so, the IRS may take action.
Moving to Another State for Retirement? Consider the Taxes
For your retirement, you may consider moving to another state — say, for the weather or to be closer to your loved ones. Don’t forget to factor state and local taxes into the equation.
Establishing residency for state tax purposes may be more complicated than it initially appears to be.
Chances of IRS Audit May be Down but Be Prepared
The IRS just released its audit statistics for the 2018 fiscal year, and fewer taxpayers had their returns examined as compared with prior years.
However, even though a small percentage of tax returns are being chosen for audit these days, that will be little consolation if yours is one of them.
Opportunities and Traps in the International Business Space
Jen: This is the PKF Texas Entrepreneur’s Playbook. I’m Jen Lemanski, and I’m back again with Frank Landreneau, one of our International Tax Directors. Frank, welcome back to The Playbook.
Frank: Thanks, Jen. It’s great to be back.
Jen: So, last time we talked about international tax baskets with the new tax reform. What are some issues that business owners are finding with that?
The Tax and Non-Tax Benefits of Hiring Your Children This Summer
If you’re a business owner and you hire your children (or grandchildren) this summer, you can obtain tax breaks and other nontax benefits. The kids can gain on-the-job experience, save for college and learn how to manage money.
And you may be able to:
- Shift your high-taxed income into tax-free or low-taxed income,
- Realize payroll tax savings (depending on the child’s age and how your business is organized), and
- Enable retirement plan contributions for the children.
The Tax Implications of Selling Your Home
Spring and summer are the optimum seasons for selling a home. And interest rates are currently attractive, so buyers may be out in full force in your area. Freddie Mac reports that the average 30-year fixed mortgage rate was 4.14% during the week of May 2, 2019, while the 15-year mortgage rate was 3.6%. This is down 0.41 and 0.43%, respectively, from a year earlier.
But before you contact a realtor to sell your home, you should review the tax considerations.
Electric Vehicles — How You Can Get Tax Savings
While the number of plug-in electric vehicles (EVs) is still small compared with other cars on the road, it’s growing — especially in certain parts of the country. If you’re interested in purchasing an electric or hybrid vehicle, you may be eligible for a federal income tax credit of up to $7,500. (Depending on where you live, there may also be state tax breaks and other incentives.)
However, the federal tax credit is subject to a complex phaseout rule that may reduce or eliminate the tax break based on how many sales are made by a given manufacturer. The vehicles of two manufacturers have already begun to be phased out, which means they now qualify for only a partial tax credit.
How Should Entrepreneurs Treat Expenses on Tax Returns?
Entrepreneurs are often unaware that many expenses incurred by start-ups can’t be deducted right away. You should be aware that the way you handle some of your initial expenses can make a large difference in your tax bill.
Have you recently started a new business? Or are you contemplating starting one? Launching a new venture is a hectic, exciting time. And as you know, before you even open the doors, you generally have to spend a lot of money. You may have to train workers and pay for rent, utilities, marketing and more.