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The goal of the Maginnis & Carey Tax and Business Alert is to provide you with current articles on various tax and business topics. The articles are intended to keep you up to date on trends and issues that may impact your business and personal financial affairs. Please contact us if you have questions about any of the issues discussed.
On January 22, President Obama signed into law H.R. 4462, a bill that allows donors to accelerate the income tax benefits of charitable cash contributions for the relief of victims of the earthquake in Haiti. The Senate had previously passed the bill by voice vote on January 21, and the House had similarly passed it by voice vote on January 20. The Act has been assigned a Public law number: P.L. 111-126.
The bill allows individuals who make charitable contributions to aid Haitian earthquake victims to elect to claim an itemized charitable deduction on their 2009 tax return (instead of having to wait until next year to claim the deductions on their 2010 tax return). The election applies only to Haitian relief contributions made in cash after Jan. 11, 2010, and before Mar. 1, 2010. If the election is made, Haiti relief donations are deductible on the 2009 return, not the 2010 return. The bill also relieves recordkeeping requirements for Haitian relief contributions. For these contributions, a telephone bill satisfies the Code Sec. 170(f)(17) recordkeeping requirements if it shows the name of the donee organization, the date of the contribution, and the amount of the contribution.
Oregon voters recently passed Measures 66 and 67, thereby confirming increases in Oregon taxes that were passed by the Oregon Legislature in 2009. We have received many questions on this subject, and so we are providing this general summary for everyone who wants to know how these important changes will affect them and their businesses in Oregon.
One-person 401(k) plans can provide a valuable source of retirement savings for successful entrepreneurs. Given the right circumstances, such plans allow large contributions on behalf of a business owner and maintain flexibility for making contributions in future years. For 2010, a business owner can make an elective deferral contribution of up to $16,500 (add an additional $5,500 catch-up contribution if he or she is age 50 or older at year-end) plus an employer contribution of up to 20% of self-employment (SE) income or 25% of compensation. In calculating the allowable employer contribution, the owner’s SE income or compensation is not reduced by the owner’s elective deferral contribution.
Shareholders of closely held C corporations routinely lease real estate, equipment, and other property to their corporate entity. These leases are either held directly by the shareholder or through a separate entity such as a partnership, LLC, or S corporation. Of course, the C corporation could directly purchase the item or lease it from an independent source. However, advantages that can motivate shareholder leasing arrangements include...
Many taxpayers currently underemployed due to recent economic conditions may consider applying for social security retirement benefits earlier than they previously planned to supplement their income. But, continuing to work while receiving those benefits may cause their benefits to be reduced below the anticipated amount. If you are a social security beneficiary under the full retirement age (currently age 66), an earnings test determines whether your social security retirement benefits will be reduced because you earned more from a job or business than an annual exempt amount (discussed below). A different earnings test applies to individuals entitled to disability benefits.
Employers can help employees get to and from work in a tax-favored manner. Within certain monthly dollar limits, employer-provided qualified transportation fringe benefits are exempt from tax. The following fringe benefits are currently available. |
