The rules for writing off personal casualty losses on a tax return have changed for 2018 to 2025. Specifically, taxpayers generally can’t deduct losses unless the casualty event qualifies as a federally declared disaster. (The rules for business or income-producing property are different.) Another factor that now makes it harder to claim a casualty loss is that you must itemize deductions to claim one. For 2018 to 2025, fewer people will itemize, because the standard deduction amounts have been significantly increased. We can help you navigate the complex rules.
Financial statements present a company’s financial position as of a specific date. But some events happen after the cutoff date that have financial implications for the prior period or the future. Subsequent events that provide further evidence of conditions that existed on the financial statement date must be recorded. Other unforeseeable events may be disclosed in the footnotes to keep the financial statements from being misleading. Contact us to help determine the appropriate accounting treatment for these types of events.
You still have time to make your 2018 traditional and Roth IRA contributions. The deadline for most taxpayers is April 15, 2019. If you qualify, deductible contributions to traditional IRAs can lower your 2018 tax bill. Even nondeductible contributions can be beneficial because of tax-deferred growth. The 2018 contribution limit is $5,500 (plus $1,000 for those age 50 or older on Dec. 31, 2018). However, your deduction or contribution may be reduced or eliminated based on your income. Contact us to learn more about retirement saving in your situation.
If your company is merging with or acquiring another business, it’s important to understand how the transaction will be taxed. For tax purposes, a transaction can basically be structured in two ways: stock (or ownership interest) or assets. For tax and nontax reasons, buyers usually prefer to purchase assets, while sellers generally prefer stock sales. Buying or selling a business may be the most important deal you’ll ever make, so seek professional tax advice as you negotiate. After a deal is done, it may be too late to get the best tax results. Contact us.
If you participate in a qualified retirement plan, such as a 401(k), you must generally begin taking required minimum distributions (RMDs) no later than April 1 of the year after which you turn age 70½. The penalty for withdrawing less than the RMD is 50% of the portion that should have been withdrawn but wasn’t. However, there’s an exception that may apply to certain people if they’re still working for the entire year in which they turn 70½. The RMD rules are complex. Contact us to customize a plan based on your individual retirement and estate planning goals.
Here are a few key tax deadlines for businesses during Q2 of 2019. APR. 1: File with the IRS if you’re an employer that will electronically file 2018 Forms 1097, 1098, certain Forms 1099 and/or Form W-2G. APR. 15: If you’re a calendar-year corporation, file a 2018 income tax return (Form 1120) or file for a six-month extension (Form 7004) and pay any tax due. APR. 30: Employers report income tax withholding and FICA taxes for Q1 2019 (Form 941) and pay any tax due. Contact us to learn more about filing requirements and ensure you meet all applicable deadlines.
If you’re the parent of a child age 17 to 23, and you pay all (or most) of his or her expenses, you may be surprised to learn you’re not eligible for the child tax credit. But there’s a $500 dependent tax credit that may be available to you. That can provide some extra spending money! To qualify, you and your child must pass certain tests. These include: The child lives with you for over half the year; the child is over age 16 and up to age 23 if he or she is a student; and you provide over half of the child’s support for the year. Contact us for more details.
Related party transactions and relationships aren’t necessarily bad. But they raise some concerns about the risk of misstatement or omission in financial reporting. In recent years, updated professional standards have led external auditors to focus more attention on related parties. This scrutiny may help avert corporate failures and lead to improvements in accounting transparency and disclosures. We need your help throughout the audit process to identify, evaluate and disclose all related party relationships and transactions, openly and completely.