Tax Planning

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Family Business Transition Dilemma – Who Gets The Baton?

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Family business transition planning is frequently predicated on the assumption that someday the parents will be passing on the baton to one (or several) of their own children. What more satisfactory way of crowning their lifelong efforts and hard won success than to pass on the legacy to their own kin so they too can continue to enjoy and prosper from it.

However, children are never clones of a parent and generations also vary one from another so that we can, these days, point to enough commonalities among age cohorts to be able to characterize this person as a baby boomer, that one as a Gen X and another as a Gen Y.

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Fuel for Tax Rate Increases - The Capital Gain Tax Debate

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With the recent release of some IRS statistics that the 400 highest-earning U.S. households reported an average of $345 million in income in 2007, up 31 percent from a year earlier and  the average tax rate for these households fell to the lowest in almost 20 years you can imagine the political hay that may be made.

Each household in the top 400 of earners paid an average tax rate of 16.6 percent, the lowest since the agency began tracking the data in 1992, the Internal Revenue Service statistics show. Their average effective tax rate was about half the 29.4 percent in 1993.

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What does being "agnostic" about raising taxes really mean? Probably that our pockets are about to be emptied.

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Never let it be said that these aren't some interesting political times. Our federal government has been spending money faster than the printing presses can create it and the politicos have yet to figure out how they plan to pay for it all. Forget the debate of right or wrong on the spending, the fact is the bill will be coming due.

If you'd like to get an idea of what may be coming down the pipe for us, Bloomberg BusinessWeek had an interview with the President you really should read.

President Barack Obama said he is “agnostic” about raising taxes on households making less than $250,000 as part of a broad effort to rein in the budget deficit. Now that's a new way to be wishy-washy with an answer.

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Making the Most of Your Aircraft Deductions

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More than ever, the media, IRS and the Securities and Exchange Commission have expressed their disapproval of private aircraft use by businesses. They each hold a general perception that personal use of business aircraft is extravagant and difficult to justify. But, your purchase, lease, or charter of an aircraft by you or the corporation you own (remember if you’re married, “you” includes your spouse as well) can still create open the opportunity for significant tax benefits.

As you might imagine, the IRS does not take as kind of a view of the tax benefits of aircraft ownership as you or I might. The American Jobs Creation Act of 2004 reversed the favorable aircraft deduction strategies previously available to you as identified in a key Tax Court case (Sutherland Lumber-Southwest, Inc. v Commissioner).

An IRS notice now restricts certain aircraft deductions, requires specific treatment of business owners, and requires stricter, more detailed records of aircraft use. Even with these restrictions though, you can still increase your financial wellbeing by making the aircraft rules work for you.

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Do you have to file a tax return?

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It's that season of the year, that dreaded one following the holiday season... Tax Season.  Every year about this time we begin to get lots of calls and emails from students, retirees, etc. all asking, "Do I need to file a tax return this year?"

Well, besides just income level there are plenty of reasons why you may need -- or even want to -- to file a tax return.

You must file a tax return if your income is above a certain level. The amount varies depending on filing status, age and the type of income you receive. Here are the general guidelines.

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Want your home buyer tax credit? I hope you are patient.

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For all of you that are eligible for the home buyer tax credit this filing season I have some news from the IRS administrative front. Don't expect your tax refunds to come quickly. Oh, and you won't be able to file your federal income tax return electronically either. And make sure you have all your closing paperwork at your fingertips.

The Internal Revenue Service today (Jan 15, 2010) released the new form that eligible home buyers need to claim the first-time homebuyer credit this tax season and announced processing of those tax returns will begin in mid-February. The IRS also announced new documentation requirements to deter fraud related to the first-time home buyer credit.

The new form and instructions follow major changes in November to the home buyer credit by the Worker, Homeownership, and Business Assistance Act of 2009. The new law extended the credit to a