Mid-Year Tax Planning for 2008
Federal Tax Watch
Tax planning is time-sensitive: It may be time to review your plan
The current sagging interest rates create opportunities for favorable tax planning results. Each month, the IRS establishes interest rates that are used for a variety of purposes. Based on the premise that investors earn only a rate of return measured by current interest rates, taxpayers may transfer wealth from one generation to the next without the imposition of significant gift or estate tax.
Surviving spouse home sale exclusion liberalized
Before a change in the law late in 2007, an exclusion of up to $500,000 of gain on the sale of a principal residence was available only to taxpayers who filed a joint return and met certain other tests. Under the change in the law, effective in 2008, the surviving spouse now may use the full $500,000 exclusion as long as the sale occurs not later than two years after the date of death of the other spouse.
Electronic tax payment offers many advantages
The Electronic Federal Tax Payment System is a free system used by both businesses and individuals to pay their federal tax liability. While many employers hire an outside payroll company to take care of their payroll tax obligations, including the remittance of payroll taxes, it makes sense to enroll in the electronic system. When the employer enrolls, it should obtain a separate personal identification number (PIN). The payroll company may have a contractual obligation to make the payroll taxes on behalf of the business. However, it is ultimately the employer who is responsible to make sure that all payroll taxes are paid in the correct amount and in a timely manner.
Kiddie tax changes warrant re-examining portfolio
Until recently, the so-called "kiddie" tax was applicable to minors under age 14. Recent legislation expanded the scope of this tax for 2008 income tax returns to children under age 19, or under age 24 if a full-time student. The tax is assessed at the parents' tax rate on unearned income in excess of $1,800.
General Business/Management Strategies
Consumer-directed health plans: Are they right for your company?
CDHPs are an attempt to make the system more rational by giving consumers a financial stake in their healthcare decision making as well as giving them tools to make good healthcare choices to stay healthier in the first place. The plans are currently most popular among large employers, but 10 percent of employees of small enterprises (those with under 200 employees) are enrolled in CDHPs, and that number is growing for all size employers.
Workplace romance: Do you have a policy?
What better place than work to meet a potential romantic partner – someone with similar values and interests that you get to know slowly over time. We all know happy couples who met at work. But when handled poorly, workplace romance can cause serious problems for the whole organization.
Investigating a Fraud: Verbal – and nonverbal – clues point to guilt
A properly planned interview can yield much more than simply learning about a subject’s background information.
Techniques such as behavior analysis can be used to determine whether someone is being truthful or deceitful.
By incorporating behavior-provoking questions during the session, the interviewer can observe and analyze verbal, as well as nonverbal, responses.
Family Business/Succession
When your name is your business -- Planning successful succession
If your business is closely identified with you or your partners, carefully consider the impact of transferring leadership to other family members, professional managers or new owners before making any drastic changes. This article uses the case of Ben & Jerry's ice cream company to illustrate the best approach to succession when your name is your business.
Business, family demands require good balancing act
Ask anyone who owns a small business, and they’ll tell you how quickly the business can take over your life. Keeping the needs of the business from taking over is tough. Running a business does take time, but keeping a family together does, too. Yes, you do have to make some sacrifices to make your business a success, but your family shouldn’t be one of those sacrifices. So how can you keep the demands of your business in check?
Mentoring may deliver the work force you need
If one of your key managers were to suddenly leave the business or become incapacitated, do you have someone qualified to take that manager’s place immediately? Could you prevent your business from suffering while a replacement grows into the role? If not, a mentoring program might be the answer. Mentoring pairs seasoned employees – mentors – with less experienced employees – mentees – to help foster your employees’ career development and professional growth.
Manufacturing
Compensation, incentive plans bolster employee morale
Outsourcing to a low-wage country sounds like a great way to save money. But, it won’t work in the distribution and logistics sector, where you need hands-on people. It’s important to keep your best workers by letting them know how much they really earn and developing incentive programs that offer opportunities to earn still more.
Five ratios help you manage from the balance sheet
Managing and measuring growth from the balance-sheet side of the company’s books can often generate stronger financial performance. By taking a look at both assets and liabilities, management can ensure that the company’s growth plans do not increase debt and cause cash flow or liquidity problems.
Cash flow forecast can help you weather rainy days
Most business owners learn very quickly that there is a big difference between profit and cash flow. This lesson is so important that a failure to grasp its business significance may lead to a failure of the business itself. First, it is important to be clear about what the term “cash” means.
Construction
‘BIM’ enters construction vocabulary
Three letters – BIM – are increasingly becoming part of the ABCs of construction technology. What is BIM? BIM, which stands for building information modeling, refers to the creation and coordinated use of digital information about a building project, according to the Construction Management Association of America.
10 tax tips for real estate investors
These are tricky times for real estate investments.
While many properties still have solid appreciation, the market continues to slide, and a turnaround is not expected anytime soon. As you ride out the slide, here are some strategies to help you minimize the sting of taxes.
What is the true value of a business valuation?
Although a business valuation is important for contractors considering an ownership transition or business sale, it serves many other purposes. A valuation should be considered when seeking loans, establishing an employee stock option plan, creating a buy-sell agreement, contemplating a merger or acquisition or engaging in estate planning or gift taxation.
Federal Tax Watch Special Issue - February 2008
Congress passes economic stimulus package
The technical information here is necessarily brief. No final conclusion on these topics should be drawn without further review and consultation. Please be advised that, based on current IRS rules and standards, the advice contained herein is not intended to be used, nor can it be used, for the avoidance of any tax penalty assessed by the IRS.
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