Generous Energy Credits Available to Individuals and Businesses Through 2016

Conserving energy is a priority for many taxpayers. There are generous federal income-tax credits available to individuals and businesses that can help defray some of the cost of buying and installing certain energy efficient systems. Individuals The residential energy efficient property (REEP) credit is a tax credit of up to 30% of the expenses paid for solar electric, solar hot water, geothermal heat pump, small wind energy, and fuel cell property. In the case of fuel cell property, there is an additional cap on the credit of $500 for each half kilowatt of capacity. To qualify for the credit, the … Continue reading

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IRS Reduces Filing Requirements for Small Businesses Complying with Tangible Property Regulations

The IRS has announced that, for 2014, it will allow qualifying small businesses to account for tangible property on a go-forward basis for that year and without filing Form 3115. Essentially, the new rule makes it easier for small businesses to adopt the new tangible property regulations made effective for 2014. Background In 2013, the IRS issued long-awaited and wide-ranging final regulations concerning the proper method of accounting for the acquisition, maintenance, and improvement of tangible property. In 2014, the IRS issued additional final regulations regarding dispositions of tangible property. The new regulations will require many taxpayers to change their … Continue reading

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Does Your Expense Reimbursement Plan Meet IRS Requirements?

Any employer reimbursing its employees for business-related expenses should consider whether the reimbursement arrangement meets the IRS’s requirements for an “accountable plan.” Meeting these requirements avoids the need to include the expense payments in employees’ gross income and avoids the employer’s share of any payroll taxes that otherwise would be due on the payments. General Requirements An accountable plan must meet several requirements. One is that the expense must have a “business connection,” meaning it must be allowable as a deduction and paid or incurred by the employee while performing services as an employee. Also, the employee must adequately account … Continue reading

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2015 Contribution Limits for Retirement Accounts

The IRS has announced the 2015 contribution limits for both employer-sponsored plans and individual retirement accounts (IRAs). Increased limits may provide individuals and businesses with opportunities for additional tax savings in the coming year. Employer-sponsored Plans 401(k), 403(b), and most 457 plans. In 2015, employees may defer up to $18,000 in earnings (up from $17,500 in 2014). For those 50 and older, the limit on supplemental “catch-up” contributions has increased from $5,500 to $6,000. Defined contribution plans. The dollar limit on “annual additions” (generally, combined contributions of the employee and employer) to a participant’s account in a defined contribution plan, … Continue reading

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Congress Passes Extender Legislation for 2014

On December 19, President Obama signed legislation extending a number of tax breaks that had expired at the end of 2013. For many individuals and businesses, these deductions and credits can provide substantial tax savings for the 2014 tax year. Below are some of the more significant provisions in the extender package. Individuals State and Local Sales Tax Deduction. Individuals who itemize their deductions may choose to deduct state and local sales taxes instead of state and local income taxes. This provision may help taxpayers who purchased big-ticket items, such as automobiles, in 2014, as well as taxpayers in states … Continue reading

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