If you’re the owner of an incorporated business, you know there’s a tax advantage to taking money out of a C corporation as compensation rather than as dividends. The reason: A corporation can deduct the salaries and bonuses that it pays executives, but not dividend payments. Therefore, if funds are paid as dividends, they’re taxed twice, once to the corporation and once to the recipient.
In the News
Tuesday, April 25, 2023
Monday, April 3, 2023
Summer is around the corner so you may be thinking about hiring young people at your small business. At the same time, you may have children looking to earn extra spending money. You can save family income and payroll taxes by putting your child on the payroll. It’s a win-win!
Here are four tax advantages.
Wednesday, March 29, 2023
Let's say you have an unincorporated sideline activity that you think of as a business, including an activity involving horses. If you have a net loss (deductible expenses exceed revenue) on that activity and you think you can deduct that loss on your personal federal income tax return, think again!
Wednesday, March 29, 2023
If you or a loved one needs long-term care (LTC) services, there are insurance products that can help cover the cost. As an additional incentive, qualified LTC policies deliver some tax advantages.
Wednesday, March 29, 2023
In early March, Silicon Valley Bank (SVB) and Signature Bank unexpectedly collapsed. They became the second and third largest bank failures in U.S. history, respectively. The largest collapse involved Washington Mutual in 2008, precipitating the Great Recession. (See "Two Banks Collapse in One Week" at right.)
Wednesday, March 8, 2023
Retirement Plan Distributions: Know the Tax Rules
At tax time, age matters. Taxpayers who take distributions from their retirement accounts before age 59½ will generally owe a penalty of 10% of the amount of the distribution. There are exceptions, such as the need to pay documented medical bills (within statutory limits).
Wednesday, March 8, 2023
There's some sobering news amid other encouraging recent employment data that may take you by surprise in this tight labor market. After all, "now hiring" signs are everywhere, and some sources paint a picture of a historically strong jobs market.
Wednesday, March 8, 2023
If you're thinking about selling stocks, mutual funds or other investments, you need to first familiarize yourself with the cost basis rules and their implications for your tax bill. Learning the rules may help you significantly reduce the amount of capital gains that will be subject to taxation as a result of the sale.
Tuesday, February 21, 2023
Many people began working from home during the COVID-19 pandemic — and many still work from their home offices either all the time or on a hybrid basis. If you’re self-employed and run your business from home or perform certain functions there, you might be able to claim deductions for home office expenses against your business income.
Tuesday, January 24, 2023
The threat of a recession has persisted for over a year. With this uncertainty, many businesses may be considering layoffs. If you're seeing clues that your employer might slash jobs and you're worried about being on the firing line, it's smart to prepare. Here are five personal finance tips you can use … just in case.
1. Increase Savings
