Tax and Business Alert - December 2014



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.

SUPERSIZING YOUR CHARITABLE CONTRIBUTION DEDUCTIONS
This article considers three charitable giving strategies that can help boost one's 2014 charitable contribution deduction: using a credit card, donating a life insurance policy, and taking advantage of a donor-advised fund. Read more...

UNICAP RULES AND EXEMPTIONS
A set of tax rules known as the uniform capitalization (UNICAP) rules require certain business costs that are normally expensed as they're incurred to instead be capitalized as part of the cost of inventory held for resale or noninventory items produced by a taxpayer for use in its trade or business. The rules are far from new, but a recent Tax Court decision is a reminder that they can be a trap for the unwary. Such was the case, this article explains, for a homebuilder who failed to capitalize a whole host of generally indirect costs that the IRS and the Court found to be related to completing the homes. Read more...

RETAINING KEY EMPLOYEES
Strategies to identify, retain and reward key employees are a must - and the most effective incentives are usually monetary. Generally, they are offered in the form of nonqualified plans, which are much more flexible than qualified plans concerning benefits, contributions, and participation requirements, and so can be tailored to a particular person's situation. This article discusses three types: restricted stock, incentive stock options, and nonqualified stock options. Read more...

HOME OFFICE EXPENSES OF EMPLOYEES
One requirement that must be met to qualify for a home office deduction is the "employer convenience test," which is hard to satisfy unless the employer doesn't provide the employee with an appropriate space in which to get their work done. This was the situation in a recent court case. This article looks at the case, in which the court ruled that an employee whose home was treated as her company's "branch office" did indeed qualify for a partial deduction. Read more...

CHECK YOUR PARTNERSHIP AND S CORPORATION STOCK BASIS BEFORE YEAR END
This paragraph explains what a person should do if they own an interest in a partnership or S corporation, but expect it to generate a loss this year and there's not sufficient basis to claim a full deduction. Read more...

DISABILITY INSURANCE FOR BUSINESS OWNERS AND PROFESSIONALS
Disability might not only remove a source of family income; it may also increase family expenditures. This brief article mentions a few factors to consider when choosing disability insurance coverage. Read more...

SENIORS AGE 70½+: TAKE YOUR REQUIRED RETIREMENT DISTRIBUTIONS
The tax laws generally require individuals with retirement accounts to take annual withdrawals based on the size of their account and their age beginning with the year they reach age 70½, or face a hefty penalty. Those turning age 70½ in 2014 can delay their 2014 required distribution to 2015 - but this brief article explains whether or not it may make sense to do so. Read more...

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