MORDFIN Blog (page 41)

Your business may be able to claim big first-year depreciation tax deductions for eligible real estate expenditures rather than depreciate them over several years. But should you? It’s not as simple as it may seem.

The IRS recently released its audit statistics for the 2022 fiscal year and fewer taxpayers had their returns examined as compared with prior years. But even though a small percentage of returns are being chosen for audits these days, that will be little consolation if yours is one of them.

It has come to our attention that the word “is” is missing in the first sentence of the FULL ARTICLE. Below is an updated version. We apologize for the error and any inconvenience it has caused you.

When one spouse in a married couple is not earning compensation, the couple may not be able to save as much as they need for a comfortable retirement. In general, an IRA contribution is allowed only if a taxpayer earns compensation. However, there’s an exception involving a “spousal” IRA. It allows contributions to be made for a spouse who is out of work or who stays home to care for children, elderly parents or for other reasons, as long as the couple files a joint tax return.

Do your not-for-profit’s accounting processes work perfectly — with no errors, delays or other inefficiencies? If yours is like most organizations, probably not. But if your nonprofit is committed to improvement, you have an edge over those that accept the status quo. Whether it’s building budgets, paying invoices or preparing financial statements, there’s almost always something that can work better, faster and less expensively.

When one spouse in a married couple not earning compensation, the couple may not be able to save as much as they need for a comfortable retirement. In general, an IRA contribution is allowed only if a taxpayer earns compensation. However, there’s an exception involving a “spousal” IRA. It allows contributions to be made for a spouse who is out of work or who stays home to care for children, elderly parents or for other reasons, as long as the couple files a joint tax return.

For 2023, the amount that an eligible married couple can contribute to an IRA for a nonworking spouse is $6,500, which is the same limit that applies for the working spouse.

If you and your employees are traveling for business this summer, there are a number of considerations to keep in mind. Under tax law, in order to claim deductions, you must meet certain requirements for out-of-town business travel within the United States. The rules apply if the business conducted reasonably requires an overnight stay.

If you’re age 65 and older and have basic Medicare insurance, you may need to pay additional premiums to get the level of coverage you want. The premiums can be costly, especially for married couples with both spouses paying them. But there may be an advantage: You may qualify for a tax break for paying the premiums.

Using the cash basis of accounting may make sense for your not-for-profit organization — at least at this stage. Many smaller nonprofits use the cash basis to prepare their financial statements because it’s generally quick, easy and intuitive and can alert them to current cash flow challenges. However, there’s a potential problem with cash basis accounting: It can require year-end adjustments. Let’s look at the issue.

High-income taxpayers face a regular income tax rate of 35% or 37%. And they may also have to pay a 3.8% net investment income tax (NIIT) that’s imposed in addition to regular income tax. Fortunately, there are some ways you may be able to reduce its impact.

Your not-for-profit organization can’t count its cybersecurity program effective unless it properly trains employees. If staffers visit “dangerous” websites, mix work and personal accounts, or can’t recognize a social engineering scheme, they may open the door to hackers. Both new employee training and refresher courses for longtime staffers can protect your organization.