July 2017 Tax & Business Alert

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WHY YOU SHOULD (OR SHOULDN’T) PURSUE AN ACQUISITION

M&A activity tends to wax and wane. Nonetheless, billions of dollars continue to change hands annually, and an acquisition can be a great way to grow a business. So owners should be prepared if one of these deals comes their way. This article explores some pros and cons to consider.

LEASING PROPERTY TO YOUR BUSINESS MIGHT TRIGGER UNDESIRABLE TAX CONSEQUENCES

A business owner who also owns real estate may be tempted to lease that property to the company. Unfortunately, for owners of pass-through entities, doing so may trigger the “self-rental rule” and might lead to negative tax consequences. This article explains the details of the self-rental rule plus a way to avoid triggering it.

WHICH TYPE OF MORTGAGE LOAN MEETS YOUR NEEDS?

Few purchases during one’s lifetime will be as expensive as buying a home. That’s why, when considering a mortgage, it’s important to know what specific type of loan is the best choice. This article looks at the two major choices: fixed-rate and adjustable-rate.

KNOW YOUR TAX HAND WHEN IT COMES TO GAMBLING

A royal flush can be quite a rush. But the IRS casts a wide net when defining gambling income. This brief article outlines the tax impact of gambling winnings for casual players and how the rules differ for professional gamblers.

TAX CALENDAR

This calendar notes important tax deadlines for the third quarter of 2017.

A vision for “transformational” tax reform

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In a recent speech to the National Association of Manufacturers, House Speaker Paul Ryan urged Republicans to seize this “historic opportunity” to enact meaningful tax reform. With few details, he listed goals that included a simplified tax code, lower tax rates, improved global competitiveness for American businesses, elimination of special interest carveouts and permanent changes that give businesses certainty to plan for the future. Ryan projected that a realistic timeline for tax reform would be the end of 2017.

Raffensperger, Martin & Finkenbiner will continue to follow the potential tax reform. In truth, many of us thought the bill would be law by now, and the rates and changes would have been retroactive to January 1, 2017. Based on the timeframe, we anticipate that any changes would not be law until January 1, 2018. 

As of now, that makes proactive tax planning a little more challenging as what’s good this year may be altered in the future. However, we will continue to recommend options and new ideas that provide immediate benefit. We will still look at long-term plans but will be more conservative in our recommendations depending on the situation and circumstance.  

 

IRS warns of new impersonation scam

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The IRS has issued a warning concerning a scam linked to the Electronic Federal Tax Payment System (EFTPS). The scam involves fraudsters calling potential victims and demanding an immediate payment through a prepaid debit card. The scammers impersonate IRS employees and tell the victims about certified letters that purportedly were mailed to the taxpayer but returned as undeliverable. Targets of the scam are told that the prepaid debit card is linked to the EFTPS and they’re threatened with arrest if a payment isn’t made

Relief from a Tax Penalty You May Not Have Even Known About!

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Did you know that small businesses that fail to file their annual retirement plan returns can face hefty fines of up to $15,000 per return? Fortunately, the Internal Revenue Service recognizes that some businesses may not even realize that this requirement applies to them. As a result, a tax penalty relief program allows them to pay $500 per return for late filings, up to a maximum of $1,500. The shelter aims at small businesses whose plans cover a 100% owner or partners in a business partnership, and their spouses. The U.S. Department of Labor also has a relief program for companies that have employees.

If you’re not sure whether the requirements—or the relief programs—apply to you, be sure to contact us. We can offer advice on how to remain in compliance with critical regulations and minimize your tax outlays.