Tax and Tax Planning

It’s been a tough couple of years for many businesses. When the economy struggles, companies are tempted to put taxes on the back burner while they concentrate on other business concerns. This is a big mistake. You can’t bury your head in the sand and pray that everything works out when April 15 rolls around. Managing your business and individual tax burden becomes even more important in a difficult business environment. You can’t afford to miss out on tax incentives that can boost your bottom line. Your competitors won’t.

This tax section sponsored by: Grant Thornton LLP National Tax Office  1900 M Street, NW, Suite 300 Washington, DC 20036 T 202.296.7800 | F 202.833.9165 www.grantthorton.com taxconsulting@gt.com PERSONAL EXEMPTION $3,700 per person (none if filling as a dependent) EXEMPTION PHASEOUT There is no phaseout for exemptions in 2011.  (Phaseout scheduled to return in 2013.) MAXIMUM [...]

The sale of high-value assets is commonly made on “terms.” That is, the seller agrees to accept payment over time in “installments.” If there is a gain, should the tax bill on the entire transaction be due and payable in the year the transaction is consummated? What if the buyer defaults? What if the first payment does not provide enough cash to allow the seller to pay all the tax due?

You work hard to increase sales and reduce costs. Both are essential for profitable growth. But it may surprise you to learn that, from a pure cash-in-your-pocket point of view, a tax dollar saved is much more valuable than an additional sales dollar or cost-savings dollar. The reason: A tax dollar saved is a full [...]

Question: Several years ago my daughter took out a mortgage to buy a home. I told her that I would help her pay it off. Now I am wondering whether I can deduct the mortgage interest since I’ve personally been paying the monthly payments. The loan is in her and her husband’s name, but they are now separated.

A key feature of our federal tax system is its progressive nature. Tax rates are higher at higher levels of income. Your marginal tax rate is the rate of tax you pay on your next dollar of taxable income. The rates for 2010 and 2011 start at zero, then go to 10, 15, 25, 28, [...]

Strategies for lowering the rate at which income is taxed include the rationalization of taxable income between tax years in light of marginal tax rates, moving income to persons or entities that are taxed at lower levels, moving income into accounts that are nontaxable or tax deferred, and conducting transactions in a manner that qualifies [...]

As an individual taxpayer and business owner, you often have options as to when and how to complete a taxable transaction. You have the right to choose the timing and method that results in the lowest tax liability. There is nothing wrong or illegal about tax planning or tax avoidance, as long as you don’t [...]

The filing season is here and although 2010 is in the books, it’s not too late to employ some smart strategies. Tax law changes enacted the past two years provide some opportunities. The tax experts at Grant Thornton offer the following for owners of small and midsize U.S. companies: New and of Note Must itemize [...]