Berger, Elliott & Pritchard, CPAs, LLC

07/08/2023

07/07/2023

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. However, it can be difficult to qualify to claim medical expenses on your tax return. For 2023, you can deduct medical expenses only if you itemize deductions and only to the extent that total qualifying expenses exceeded 7.5% of adjusted gross income. We can determine whether you should claim the standard deduction or claim medical expense deductions on your tax return.

07/03/2023

High-income taxpayers face a regular income tax rate of 35% or 37%. And they may also have to pay an additional 3.8% net investment income tax (NIIT). The NIIT applies only if modified adjusted gross income (MAGI) exceeds: $250,000 for married taxpayers filing jointly and surviving spouses; $125,000 for married taxpayers filing separately; and $200,000 for unmarried taxpayers and heads of household. The amount subject to the tax is the lesser of your net investment income or the amount by which your MAGI exceeds the threshold ($250,000, $200,000, or $125,000) that applies to you. Fortunately, there are some ways you may be able to reduce the impact of the NIIT. Contact us for strategies.

06/29/2023

Section 179 allows businesses to deduct (rather than depreciate over several years) the costs of eligible assets, such as equipment and furniture. The deduction can also be claimed for real estate qualified improvement property (QIP). For eligible assets placed in service in 2023, the maximum allowable first-year Sec. 179 deduction is $1.16 million. QIP includes improvements to an interior portion of a nonresidential building that are placed in service after the building is placed in service. QIP also includes HVAC systems, nonresidential roofs and alarm systems that are placed in service after the building is first placed in service. Consult with us about how to proceed.

06/28/2023

In recent years, many workers have become engaged in the “gig” economy. They may deliver takeout restaurant meals, walk dogs, drive for ride-hailing companies or even perform services such as nursing. There are tax consequences when performing these jobs. Generally, if you receive income from gigs or freelancing, it’s taxable. That’s true even if the income comes from a side job and if you don’t receive a 1099-NEC or other form reporting the money you made. You may need to make quarterly estimated tax payments because your income isn’t subject to withholding. Some or all of your business expenses may be deductible on your tax return, subject to the normal tax rules. Contact us to learn more.

06/26/2023

If you have significant assets, you should consider establishing a living trust to avoid probate. Probate is the legal process intended to make sure a deceased person’s assets are properly distributed. However, going through probate typically means red tape, legal fees and your financial affairs becoming public information. You can avoid this with a living trust. For federal income tax purposes, a living trust’s existence is ignored while you’re alive. As far as the IRS is concerned, you still personally own the assets that are in the trust. So, you continue to report on your tax return any income generated by trust assets and any deductions related to those assets. Contact us to learn more.

06/22/2023

If you and your employees are traveling for business this summer, there are a number of considerations. Under tax law, in order to claim deductions, you must meet certain requirements for out-of-town business travel within the U.S. The rules apply if the business reasonably requires an overnight stay. The actual costs of travel (plane fare, cabs, etc.) are deductible for out-of-town business trips. You’re also allowed to deduct the cost of lodging. For 2023, the law allows a 50% deduction for business meals. If a trip is a combined business/pleasure trip, only the costs of meals, lodging, etc., incurred for the business days are deductible (not those incurred for personal vacation days).

06/20/2023

Here are a few key tax-related deadlines for businesses and other employers during the third quarter of 2023. JULY 31: Report income tax withholding and F**A taxes for Quarter 2 of 2023 (unless eligible for an Aug. 10 deadline). File a 2022 calendar-year retirement plan report or request an extension. SEPT. 15: If you operate a calendar-year partnership or S corp. that filed an extension, file a 2022 income tax return and pay any tax, interest and penalties due. SEPT. 15: If a calendar-year C corp., pay third installment of 2023 estimated income taxes. Contact us for more about the filing requirements and to ensure you meet all applicable deadlines.