Tax and Tax Planning

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 [...]

Tax rates are scheduled to be higher next year. It might be time to reverse your usual tax strategy. Instead of deferring tax, it may make sense for some taxpayers to accelerate income into 2010, defer expense into 2011 and pay tax at the current lower rates. The majority of the potential increases are due to the scheduled expiration of cuts enacted in 2001 and 2003 at the end of the year.

2010 Tax Information now available. Sponsored by Grant Thornton LLP National Tax Office.

New legislation radically expands your obligation to annually issue 1099s. This is not good. Complying with the existing 1099 obligation is costly and time-consuming. The new law is expected to increase the burden fivefold at the very least. Most accounting professionals, such as Eide Bailly, LLP partner Dan Cunningham, say the new law is virtually certain to be repealed. All say it’s ridiculous and unworkable. For this reason, and because there’s enough time before you’re required to do anything under the new law, we suggest you ignore it entirely — at least for now.

On September 25, the Small Business Jobs Act of 2010 became law. Here are the provisions you should know about:
Extension of Aggressive SBA Loan Programs

You might be able to reduce debt service burden by refinancing your debt. If you need additional working capital, or need to purchase equipment or fund improvements to your facilities, aggressive-support SBA programs have been extended through year-end and, in some cases, enhanced. You might be surprised at what banks are willing to do with government guarantees standing behind them. Here’s a summary of the SBA elements of the new law.

The federal tax rate on long-term investment gains is currently 15 percent. Under current law it’s set to rise to 20 percent in 2011. How might this affect you? If you have an investment you plan to sell, and do so in 2010, you’ll pay a little less tax. For example, if you invested $300 and sell it for $500, your gain will be $200. Sell it in 2010 and your tax will be $30. Sell it in 2011 and your tax will be $40, a 25 percent increase.

Though the tax-filing deadline is near, there’s no need to panic. You still have time to employ some smart strategies and avoid common problems and hassles. The tax experts at Grant Thornton provide the following suggestions and reminders.