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Boris Benic
1,116 followers -
Long Island based CPA , experienced in all areas of tax planning and compliance, both for individuals and corporations
Long Island based CPA , experienced in all areas of tax planning and compliance, both for individuals and corporations

1,116 followers
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Summer Day Camp Can Save You Taxes!

Although the kids might still be in school for a few more weeks, summer #daycamp is rapidly approaching for many families. If yours is among them, did you know that sending your child to day camp might make you eligible for a #taxcredit?

The power of tax credits
Day camp (but not overnight camp) is a qualified #expense under the child and dependent care credit, which is worth 20% of qualifying expenses (more if your adjusted gross income is less than $43,000), subject to a cap. For 2016, the maximum expenses allowed for the credit are $3,000 for one qualifying child and $6,000 for two or more.
Remember that tax credits are particularly valuable because they reduce your tax liability dollar-for-dollar — $1 of tax credit saves you $1 of taxes. This differs from deductions, which simply reduce the amount of income subject to tax. For example, if you’re in the 28% tax bracket, $1 of deduction saves you only $0.28 of taxes. So it’s important to take maximum advantage of the tax credits available to you.

Rules to be aware of
A qualifying child is generally a dependent under age 13. (There’s no age limit if the dependent child is unable physically or mentally to care for him- or herself.) Special rules apply if the child’s parents are divorced or separated or if the parents live apart.
Eligible costs for care must be work-related, which means that the child care is needed so that you can work or, if you’re currently unemployed, look for work. However, if your employer offers a child and dependent care Flexible Spending Account (FSA) that you participate in, you can’t use expenses paid from or reimbursed by the FSA to claim the credit.

Are you eligible?
These are only some of the rules that apply to the child and dependent care credit. So please contact us to determine whether you’re eligible.
#taxtips #taxdeductions #childcare  
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If your company still doesn't have a website, it should. To help get you started, here are some "must have" essential features for your #smallbusiness website. #smallbusinesstips #webdesign  
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School Year Ends and Your Selling Your Home? Know the Tax Consequences

As the school year draws to a close and the days lengthen, you may be one of the many homeowners who are getting ready to put their home on the market. After all, in many locales, summer is the best time of year to sell a home. But it’s important to think not only about the potential #profit (or loss) from a sale, but also about the# tax consequences.

Gains
If you’re selling your principal residence, you can exclude up to $250,000 ($500,000 for joint filers) of gain — as long as you meet certain tests. Gain that qualifies for exclusion also is excluded from the 3.8% net investment income tax.
To support an accurate tax basis, be sure to maintain thorough records, including information on your original cost and subsequent improvements, reduced by any casualty losses and depreciation claimed based on business use. Keep in mind that gain that’s allocable to a period of “nonqualified” use generally isn’t excludable.

Losses
A loss on the sale of your principal residence generally isn’t deductible. But if part of your home is rented out or used exclusively for your business, the loss attributable to that portion may be deductible.

Second homes
If you’re selling a second home, be aware that it won’t be eligible for the gain exclusion. But if it qualifies as a rental property, it can be considered a business asset, and you may be able to defer tax on any gains through an installment sale or a Section 1031 exchange. Or you may be able to deduct a loss.

Learn more
If you’re considering putting your home on the market, please contact us to learn more about the potential tax consequences of a sale.
#taxtip #realestate 
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Mistakes happen, even on your #taxes. The good news is they're totally fixable. But you need to take action right away. The longer you wait, the harder, more time-consuming and costly it could get. #taxtips #taxmistakes
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With the economic problems our country has faced in recent years, we've come to think of #debt as a bad word. But, in business, it's often a necessity. That's because growing a business takes a lot of money. As such, there are times when the benefits of small business loans far outweigh the risks, like when you're looking to hire more staff, purchase more inventory or move into a bigger facility.  #businesstips  
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Did You Know? QSB Stock Offers 2 Valuable Tax Benefits

By investing in qualified small business (QSB) stock, you can diversify your portfolio and enjoy two valuable #taxbenefits:

1. Tax-free gain rollovers. If within 60 days of selling #QSB stock you buy other QSB #stock with the proceeds, you can defer the tax on your gain until you dispose of the new stock. The rolled-over gain reduces your basis in the new stock. For determining long-term capital gains treatment, the new stock’s holding period includes the holding period of the stock you sold.

2. Exclusion of gain. Generally, taxpayers selling QSB stock are allowed to exclude up to 50% of their gain if they’ve held the stock for more than five years. But, depending on the acquisition date, the exclusion may be greater: The exclusion is 75% for stock acquired after Feb. 17, 2009, and before Sept. 28, 2010, and 100% for stock acquired on or after Sept. 28, 2010. The acquisition deadline for the 100% gain exclusion had been Dec. 31, 2014, but Congress has made this exclusion permanent.

The taxable portion of any QSB gain will be subject to the lesser of your ordinary-income rate or 28%, rather than the normal long-term gains rate. Thus, if the 28% rate and the 50% exclusion apply, the effective rate on the QSB gain will be 14% (28% × 50%).

Keep in mind that these tax benefits are subject to additional requirements and limits. For example, to be a QSB, a business must be engaged in an active trade or business and must not have assets that exceed $50 million.

Consult us for more details before buying or selling QSB stock. And be sure to consider the nontax factors as well, such as your risk tolerance, time horizon and overall investment goals. #taxtip #taxportfolio #smallbusiness  
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Our answers to your questions might not be as entertaining, but they're just as accurate. #FridayFunny #AccountingHumor  
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Serious Tax Problems: Unexpected Retirement Plan Disqualification

It’s not unusual for the #IRS to conduct audits of qualified employee benefit plans, including 401(k)s. Plan sponsors are expected to stay in compliance with numerous, frequently changing #federallaws and regulations.

For example, have you identified all employees eligible for your 401(k) plan and given them the opportunity to make deferral elections? Are #employeecontributions limited to the amounts allowed under tax law for the calendar year? Does your 401(k) plan pass nondiscrimination tests? Traditional 401(k) plans must be regularly tested to ensure that the contributions don’t discriminate in favor of highly compensated employees.

If the IRS uncovers #complianceerrors and the plan sponsor doesn’t fix them, the plan could be disqualified.

What happens if qualified status is lost?

Tax law and administrative details that may seem trivial or irrelevant may actually be critical to maintaining a plan’s qualified status. If a plan loses its tax-exempt status, each participant is taxed on the value of his or her vested benefits as of the disqualification date. That can result in large (and completely unexpected) tax liabilities for participants.

In addition, contributions and earnings that occur after the disqualification date aren’t tax-free. They must be included in participants’ taxable incomes. The employer’s #taxdeductions for plan contributions are also at risk. There are also penalties and fees that can be devastating to a business.

Finally, withdrawals made after the disqualification date cannot be rolled over into other tax-favored retirement plans or accounts (such as IRAs).

Voluntary corrections
The good news is that 401(k) plan errors can often be voluntarily corrected. We can help determine if changes should be made to your company’s qualified plan to achieve and maintain compliance. Contact us for more information.
#taxtips #401k
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So you filed your #taxes and then you received another #taxdocument in the mail. Don't panic! Here's what you do …
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One way for #employers to keep good #employees is by offering good benefits. But make sure you're complying with government standards. In an audit, the #IRS can easily discover errors. And that could be a very expensive goof! #employeebenefits  
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