News and Posts

  If you’re interested in selling commercial or investment real estate that has appreciated significantly, one way to defer a tax bill on the gain is with a Section 1031 “like-kind” exchange. With this transaction, you exchange the property rather than sell it. Although the real estate market has been tough recently in some locations, there are still profitable opportunities (with high resulting tax bills) when [...]

  Sponsorship and advertising dollars can provide a real boost to your not-for-profit organization’s income. However, if sponsors or advertisers receive a “substantial benefit” or if providing benefits isn’t a related business activity, you may owe unrelated business income tax (UBIT) on the payments. Here’s a quick look at what is and isn’t taxable. UBIT typically doesn’t apply to sponsorships Sponsorship dollars generally aren’t taxed. [...]

The optional standard mileage rate used to calculate the deductible cost of operating an automobile for business will be going up by 1.5 cents per mile in 2024. The IRS recently announced that the cents-per-mile rate for the business use of a car, van, pickup or panel truck will be 67 cents (up from 65.5 cents for 2023). The increased tax deduction partly reflects the price of [...]

As 2023 hurtles toward Dec. 31, your not-for-profit probably is fully engrossed in last-minute fundraising. After all, taxpayers who itemize will be able to deduct qualified charitable contributions on their 2023 tax returns. As you make last-minute pitches, don’t forget to deploy the personal touch. Many studies have shown that people are more willing to donate if a friend, family member or coworker is doing the asking. [...]

One of the most appreciated fringe benefits for owners and employees of small businesses is the use of a company car. This perk results in tax deductions for the employer as well as tax breaks for the owners and employees driving the cars. (And of course, they enjoy the nontax benefit of using a company car.) Even better, current federal tax rules make the benefit [...]

Despite many predictions to the contrary, U.S. employers have continued to add workers to their payrolls and the unemployment rate has remained low — at 3.7% as of November 2023, according to the Bureau of Labor Statistics. Is your not-for-profit among the employers that need fresh staffers? The new year is a good time to start looking, but make sure you consider a couple of issues before [...]

Is your business depreciating over 30 years the entire cost of constructing the building that houses your enterprise? If so, you should consider a cost segregation study. It may allow you to accelerate depreciation deductions on certain items, thereby reducing taxes and boosting cash flow. Depreciation basics Business buildings generally have a 39-year depreciation period (27.5 years for residential rental properties). In most cases, a [...]

Charlotte thought she knew everything about running a not-for-profit community hospital. So the CEO was shocked when the IRS contacted her hospital about potentially losing its tax-exempt status. The IRS mentioned several issues, including the hospital’s increasingly wide operating margins and its extensive use of advertising. As the dispute proceeded to litigation, Charlotte learned that the hospital had tripped over the commerciality doctrine. This is a [...]

One of the most common misunderstandings about filing an income tax return is the difference between deductions and credits. Deductions reduce the amount of a taxpayer’s income before tax is calculated. For example, on your individual return, you can either take the standard deduction or itemize deductions if it will reduce your taxable income more. Credits, on the other hand, reduce the actual tax due, [...]

The so-called “kiddie tax” can cause some of a child’s unearned income to be taxed at the parent’s higher marginal federal income tax rates instead of at the usually much lower rates that a child would otherwise pay. For purposes of this federal income tax provision, a “child” can be up to 23 years old. So, the kiddie tax can potentially affect young adults as [...]

As year end approaches, it’s time for some calendar-year businesses to perform physical inventory counts. This activity is more than a time-consuming chore; it’s an opportunity to improve your company’s operational efficiency. Here are some best practices as you prepare to count your inventory, as well as guidance on how to get more from these counts. Getting an accurate count Accurate inventory counts are important [...]

Now that Jan. 29 has been announced as the start of the 2024 tax season, the IRS is reminding taxpayers about free tools that can make filing easier. It strongly encourages taxpayers to set up accounts at irs.gov/account to file, make payments, monitor the status of refunds, manage tax records and electronically sign power of attorney authorizations from their tax advisor. If you anticipate owing [...]

One of your New Year’s resolutions may be to pay more attention to your health. Of course, that may cost you. Can you deduct your out-of-pocket medical costs on your tax return? It depends. Many expenses are tax deductible, but there are several requirements and limitations that make it difficult for many taxpayers to actually claim a deduction. The rules Medical expenses can be claimed [...]

When you retire, you may think about moving to another state — perhaps because the weather is more temperate or because you want to be closer to family members. Don’t forget to factor state and local taxes into the equation. Establishing residency for state tax purposes may be more complex than you think. Pinpoint all applicable taxes It may seem like a smart idea to [...]