Welcome to this month's edition of the Tax and Business Alert. Our goal 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.
LEASING PROPERTY TO A CLOSELY HELD CORPORATION
Shareholders of closely held C corporations routinely lease real estate, equipment,
and other property to their corporate entity. These leases can be held directly by
the shareholder or through a separate entity, such as a partnership, LLC, or S
corporation. Of course, the corporation could directly purchase the item or lease it
from an independent source. But this article describes several advantages that can
motivate these leasing arrangements.
TAXING A CHILD'S INVESTMENT INCOME
Some children who receive investment income are required to file a tax return and pay
tax on at least a portion of that income (and possibly at the parents' marginal tax
rate). This is often referred to as the kiddie tax. But it cannot be computed
accurately until the parents' income is known. This article discusses tax rules that
affect how parents report a child's investment income.
DON'T BE A CHARITY SCAM VICTIM
When a natural disaster strikes, thieves often play on the goodwill of people by
posing as representatives of real charities to steal money or get information to
commit identity theft. This article describes how bogus charities use several
different tactics to get money and information from unsuspecting individuals.
TAXABLE TIP INCOME
Tips received on the job from customers must be included in the computation of one's
tax liability, if any. This article explains the different kinds of tips that are
taxable and what tips must be reported to one's employer.
AVOIDING PENALTIES ON IRA WITHDRAWALS BEFORE AGE 59 1/2
IRA owners can withdraw money from their account at any time and for any reason
because the owner is in total control of this account. But most withdrawals from
traditional IRAs will be at least partially taxable, and the taxable portion of a
withdrawal made before age 59 1/2 will be subject to a 10% penalty tax (or as high as
25% on early withdrawals from a SIMPLE IRA). There can even be a 10% penalty tax
assessed on a nontaxable portion of some early withdrawals from Roth IRAs. However,
this article notes that there are some ways to avoid the penalty tax.
DIRTY DOZEN TAX SCAMS FOR 2014
This article notes that the IRS has released its latest annual list of the "Dirty
Dozen," the twelve most common scams that taxpayers encounter. Topping the list in
2014 is tax fraud using identity theft.
TAXING SOCIAL SECURITY BENEFITS
Some taxpayers must include up to 85% of their Social Security benefits in taxable
income, while others find that their benefits are not taxable at all. Those who
receive income from other sources may have to pay taxes on at least a portion of
their Social Security benefits. Income and filing status will also affect whether
these benefits are taxable. This article offers a quick way to find out if one's
benefits may be taxable and how to avoid tax time surprises by voluntarily requesting
that federal income tax be withheld from benefit payments.
This publication is distributed with the understanding that the author, publisher and
distributor are not rendering legal, accounting or other professional advice or
opinions on specific facts or matters, and, accordingly, assume no liability
whatsoever in connection with its use. The information contained in this newsletter
was not intended or written to be used and cannot be used for the purpose of (1)
avoiding tax-related penalties prescribed by the Internal Revenue Code or (2)
promoting or marketing any tax-related matter addressed herein. © 2014