Returning Value Blog

Comparing two tax return methods

Do you operate a business out of your home? It could be your main line of work, and your only source of business income, or just a sideline activity. Depending on your circumstances, you may be entitled to a generous tax deduction for this “home office” on your 2016 tax return.

Welcome to 2017. As we move through January and get ever-closer to April 15, we are fast-approaching the 2016 year-end tax season. We understand just how stressful this time can be—and particularly so for individuals who are working to grow startup companies

Of course, taxes are a major concern when you work full time for a living. Unfortunately, you may also have to pay federal income tax on a portion of the Social Security benefits you receive during the year—even though you’ve paid Social Security tax all the years you have been working.

Business owners beware

Several filing deadlines have changed beginning this month. Under the 2015 PATH Act, beginning with forms filed in 2017, Forms 1099-MISC, used to report non-employee compensation must be filed on or before January 31 of the year following the calendar year to which such returns relates. And those returns are no longer eligible for the extended filing date for electronically filed returns. (Code Sec. 6071(c)) View 2017 filing instructions for Form 1099-MISC.

As 2016 draws to a close, the time to consider tax-saving opportunities for you and/or your business is before year-end. Individual income taxes, whether paid through employer withholding or quarterly estimates, are probably one of your largest annual expenditures. You may want to consider opportunities to reduce or defer your annual tax obligation. Also, if you own a business, some opportunities may apply regardless of whether your business is conducted as a sole proprietorship, partnership, limited liability company, S corporation, or a regular corporation. Other opportunities may apply only to a particular type of business organization. These Tax Planning Letters are intended to assist you in your individual and business tax planning efforts.

Machen McChesney has been assisting executors and trustees in managing administrative duties for over 60 years.  We understand that leaving an estate or trust to chance can result in significant tax consequences or even frozen assets. The complexity of it all is very confusing, which is why we can work together to help you achieve the future you seek for yourself and your family. 

Does your manufacturing company plan to purchase equipment or machinery early in 2017? If so, it is worth considering the timing of when you purchase that equipment for the best tax savings. It all has to do with something called the de minimis safe harbor election.

Key rules for job-related expenses

Are you planning a move in the near future? Be aware of special tax rules for deducting moving expenses on your personal tax return. In some cases, moving expenses are fully or partially deductible, while other times they are not.

With the 2017 tax season fast approaching, I wanted to pass along a few tips and timelines to any executor or trustee who will be filing Form 1041 income tax filings for trust and estates, as well as Form 709 gift tax. Filing Fiduciaries of estates and complex trusts have the option to treat certain distributions as having occurred last year. An election can be made with respect to distributions made within 65 days after the end of a tax year.