Returning Value Blog

If your employees incur work-related travel expenses, you can better attract and retain the best talent by reimbursing these expenses. But to secure tax-advantaged treatment for your business and your employees, it’s critical to comply with IRS rules.

Reap tax rewards for travel and entertainment

What are your plans for the summer? If you have a business trip scheduled for a place you would like to visit personally, you might decide to combine a little pleasure with your business. Similarly, you may invite some of your best clients to your home for a Memorial Day or Fourth of July barbecue or treat them to a night out on the town.

Section 179 provides generous tax break

There is a unique tax break for business entities of all shapes and sizes contained in Section 179 of the Internal Revenue Code. Under this section, a business can elect to “expense,” or currently deduct, the cost of qualified property placed in service during the year, up to a maximum level. It is near-instant tax gratification.

Undoubtedly, the national elections will have an impact on personal taxes for years to come. But it is unlikely that a lame-duck Congress will enact changes that will significantly affect tax planning for 2016. Accordingly, here are seven tax moves for individuals to consider at the end of this year.

Choose one of three tax-savers

Now that your children are back in school, you might consider the available tax breaks for higher education expenses. Following extensions and modifications under the Protecting Americans from Tax Hikes (PATH) Act of 2015, there are three primary tax provisions that may benefit parents: the American Opportunity Tax Credit (AOTC), the Lifetime Learning Credit (LLC) and the tuition deduction.

Tax rules may affect your donations

Do you own shares of stock that you want to contribute to charity? Before you pull the trigger on the donation, make sure that you give away the “right kind” of securities instead of the “wrong kind.” It can make a big difference on your tax return.

Maximize tax benefits for passive activities

Do you own investment real estate—say, an apartment building—that you rent out to tenants? Real estate can be a valuable and reliable source of income. Of course, the rental income is subject to tax, but the resulting tax liability may be offset by deductible expenses. In some cases, you might even qualify for a loss.

How parents can avoid or reduce tax

Despite its name, the “kiddie tax” is not limited to toddlers or preschool children. In fact, it may continue to apply to 20-somethings. Saving grace: At least you may be able to minimize or even eliminate this additional tax.

On November 24, 2015, the IRS issued Notice 2015-82, which increases the deductible amount for purchases of de minimis tangible property from $500 to $2,500 per item. The new limit is for taxpayers who do not have an applicable financial statement (AFS), a financial statement that is required to be filed with the SEC or a certified audited financial statement accompanied by the report of an independent CPA.