News & Resources

News

Your compensation may take several forms, including salary, fringe benefits, and bonuses. If you work for a corporation, you might also receive stock-based compensation, such as stock options. These come in two varieties: nonqualified (NQSOs) and incentive (ISOs). With both NQSOs and ISOs, if the stock appreciates beyond your exercise price, you can buy shares...

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It can be easy to forget all about taxes during summertime, when “the livin’ is easy,” as the Gershwin song goes. But if you start your tax planning now, you may avoid an unpleasant tax surprise when you file next year. Summer is also a good time to establish a storage system for your tax...

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A new Statement on Auditing Standards (SAS) that is being proposed will directly affects trustees, management, and those responsible for plan governance.  Should the SAS be adopted in its current form, the requirement for management to demonstrate compliance with all relevant provisions of the plan document will place additional burden on plan administrators, increase the...

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Summer is a popular time to move, whether it’s so the kids don’t have to change schools mid-school-year, to avoid having to move in bad weather or simply because it can be an easier time to sell a home. Unfortunately, moving can be expensive. The good news is that you might be eligible for a...

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If your estate plan includes one or more trusts, review them with consideration towards income taxes. For trusts, the income threshold is very low for triggering the: Top income tax rate of 39.6%, Top long-term capital gains rate of 20%, and Net investment income tax (NIIT) of 3.8%. The threshold is only $12,500 for 2017....

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The tax consequences of the sale of an investment, as well as your net return, can be affected by a multitude of factors. You might be focused on factors such as how much you paid for the investment vs. how much you’re selling it for, whether you held the investment long-term (more than one year),...

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When it comes to estate planning, asset protection is paramount. No matter how well your estate plan is designed, it won’t benefit anyone if you wind up with no wealth to share with your family. If you have substantial assets in employer-sponsored retirement plans or IRAs, it’s important to understand the extent to which those...

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These factors can have a big impact. Some charitable donations provide larger deductions than others, and it isn’t necessarily based on how much - or even what - you donate that matters. How the charity uses your donation can have a large outcome on your deduction. Take vehicle donations, for example. If you donate your...

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Congratulations to Nicholas Sanchez, one of MKA's taxation attorneys, on being named as a "Rising Star" in the accounting industry! See the full article here.

January 24, 2017 | by Julia Damasco We provide expert tax planning and compliance services for same sex couples and domestic partners. Contact me if you would like to talk about our experience and the specialized services we provide. The IRS has created several resource documents addressing tax issues unique to same sex married couples...

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Retirement plan contribution limits are indexed for inflation, but with inflation remaining low, most of the limits remain unchanged for 2017. The only limit that has increased from the 2016 level is for contributions to defined contribution plans, which has gone up by $1,000. Type of limit 2017 limit Elective deferrals to 401(k), 403(b), 457(b)(2)...

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California AB 1513, which went into effect on January 1, 2016, added section 226.2 to the California Labor Code. The statute establishes standards for compensating “piece-rate” employees for rest and recovery periods and other nonproductive time going forward from the effective date of the statute.  Labor Code section 226.2 also establishes a process for employers...

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LOS ANGELES, Oct. 3, 2016 – Miller Kaplan Arase LLP (“Miller Kaplan”) is pleased to announce that effective October 1, 2016, the tax and consulting experts at Damasco & Associates, have joined the Firm – further expanding  its reach through new locations and elite services. Miller Kaplan is one of the top 100 accounting firms...

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(LOS ANGELES, CALIFORNIA) August 19, 2016 – Michael Kaplan, a Partner CPA from Miller Kaplan Arase LLP, has been recognized by Billboard Magazine as one of the top 30 music managers in the industry. Compiling the exclusive list from surveyed industry sources, including executives who rank in Billboard’s annual Power 100 list, the media mogul...

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In our commitment to staying current on emerging trends within the Sports and Entertainment industry, the Miller Kaplan Arase team attended Variety & Sports Illustrated's Sports & Entertainment Summit. The Summit was held at the Vibiana in Los Angeles with keynote speakers Kobe Bryant, Dwyane Wade, Luc Robitaille, and Lisa Joseph Metelus. The Los Angeles...

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The majority of tax-exempt organizations need to file IRS Form 990 on an annual basis. The return provides an overview of an organization’s financial information, activities, and governance. There is also a section for the organization to present an overview of accomplishments during the year in order to justify and maintain its tax-exempt status. Tax-exempt...

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When creating a comprehensive financial plan, many customers overlook the importance of insurance coverage. Insurance is fallback protection, a safety net against the unexpected costs of accidents, illness, disability or disaster. Miller Kaplan guides clients in obtaining the ideal, comprehensive insurance coverage they need. These are the contingencies and considerations we evaluate with our clients...

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As the school year draws to a close and the days lengthen, you may be one of the many homeowners who are getting ready to put their home on the market. After all, in many locales, summer is the best time of year to sell a home. But it's important to think not only about...

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By investing in qualified small business stock (QSB), you can diversify your portfolio and enjoy two valuable tax benefits: Tax-Free Gain Rollovers. If within 60 days of selling QSB stock you buy other QSB stock with the proceeds, you can defer the tax on your capital gains until you dispose of the new stock. The...

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Now that the April 18 income tax filing deadline has passed, it may be tempting to set aside any thought of taxes until year end. But don’t succumb. For maximum tax savings, now is the time to start tax planning for 2016. Don’t Leave Tax Planning for the End of the Year. A tremendous number...

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Yes, the federal income tax filing deadline is slightly later than usual this year - April 18 — but it's now nearly upon us. So, if you haven't filed your federal income tax return yet, you may be thinking about an extension. When are the tax extension deadlines? Filing for a tax extension allows you...

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Starting a new business is an exciting time. But before you even open the doors, you generally have to spend a lot of money. You may have to train workers and pay for rent, utilities, marketing and more. Entrepreneurs are often unaware that many expenses incurred by start-ups can’t be deducted right away. How Expenses...

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If you suffer damage to your home or personal property, you may be able to deduct casualty losses on your federal income tax return. A casualty is a sudden, unexpected or unusual event, such as a natural disaster (hurricane, tornado, flood, earthquake, etc.), fire, accident, theft or vandalism. A casualty loss doesn’t include losses from...

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If your 2015 tax liability is higher than you'd hoped and you're ready to transfer some assets to your loved ones, now may be the time to get started. Giving away taxable assets will, of course, help reduce the size of your taxable estate. But with income-tax-smart gifting strategies, it also can reduce your income...

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Tax-advantaged retirement plans allow your money to grow tax-deferred - or, in the case of Roth accounts, tax-free. But your annual IRA contributions are limited by tax law. That means any unused limit can't be carried forward to make larger IRA contributions in future years. So it's a good idea to use up as much...

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In 1982 the Federal Communications Commission (FCC), the chief regulator of American television, radio, satellite and other forms of telecommunication, created Low Power Television (LPTV). The purpose of LPTV was to provide local-oriented programming for smaller communities. 2,450 LPTV stations were created and licensed primarily to educational, religious and governmental entities. Entrepreneurs have had difficulty...

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Tax credits reduce your tax liability dollar-for-dollar, making them particularly valuable. Two valuable tax credits for small businesses also offer certain employee benefits. Can you claim one — or both — of them on your 2015 tax return? Retirement Plan Credit Small employers (generally those with 100 or fewer employees) that create a retirement plan...

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When it comes to deducting charitable gifts from your 2015 taxes, all donations are not created equal. As you file your 2015 tax return and plan your charitable giving for 2016, it's important to keep in mind the available tax deductions. Common charitable donations that can be claimed for tax deductions include: Cash. This includes...

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If there was a college student in your family last year, you may be eligible for some valuable tax breaks on your 2015 tax return. To max out your education tax breaks, you’ll need to determine which ones you’re eligible for and then claim the one(s) that will provide the greatest benefit. In most cases...

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Today it’s becoming more common to work from home. But just because you have a home office space doesn’t mean you can deduct expenses associated with it from your 2015 taxes. Eligibility requirements If you’re an employee, your use of your home office must be for your employer’s convenience, not just your own. If you’re...

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Bonus depreciation allows businesses to recover the costs of depreciable property more quickly by claiming additional first-year depreciation for qualified assets. The Protecting Americans from Tax Hikes Act of 2015 (the PATH Act) extended 50% bonus depreciation through 2017. The break had expired December 31, 2014, for most assets. So the PATH Act may give...

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If you're like many Americans, you may not start thinking about filing your tax return until the April 15 deadline (this year April 18) is just a few weeks — or perhaps even just a few days — away. There’s another date you should keep in mind: January 19. That's the date the IRS began...

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North Hollywood, CA (January 21, 2016) – Miller Kaplan Arase LLP ("Miller Kaplan"), one of the top 100 accounting firms in the U.S., proudly announces the 75th anniversary of the company's founding. For 75 years, Miller Kaplan has been honored to provide a full range of top-notch accounting services, business management and advisory services to...

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By purchasing stock in certain small businesses, you can not only diversify your portfolio but also enjoy preferential tax treatment. And under a provision of the tax extenders act signed into law this past December (the PATH Act), such stock is now even more attractive from a tax perspective. 100% exclusion from gain The PATH...

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For the last several years, taxpayers have been allowed to take an itemized deduction for state and local sales taxes in lieu of state and local income taxes. This break can be valuable to those residing in states with no or low income taxes or who purchase major items, such as a car or boat....

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The Protecting Americans from Tax Hikes Act of 2015 (PATH Act) extended a wide variety of tax breaks, in some cases making them permanent. Extended breaks include many tax credits — which are particularly valuable because they reduce taxes dollar-for-dollar (compared to deductions, for example, which reduce only the amount of income that’s taxed). Here...

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Under the original provisions of the ACA, the due date for providing Forms 1095 to employees was February 1, 2016. Employers had until February 29, 2016 to file Forms 1094 & 1095 with the IRS (if submitting these forms electronically, the deadline was March 31, 2016). However, on December 28, 2015, the Internal Revenue Service...

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Retirement plan contribution limits are indexed for inflation, but with inflation remaining low, the limits remain unchanged for 2016: Type of limit 2016 limit Elective deferrals to 401(k), 403(b), 457(b)(2) and 457(c)(1) plans $18,000 Contributions to defined contribution plans $53,000 Contributions to SIMPLEs $12,500 Contributions to IRAs $5,500 Catch-up contributions to 401(k), 403(b), 457(b)(2) and...

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Many valuable tax breaks expired December 31, 2014. For them to be available for 2015, Congress had to pass legislation extending them — which it now has done, with the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), signed into law by the President on December 18. The PATH Act not only revives...

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What is a claims examination and when should you consider obtaining one? A claims examination is a test of claims designed to identify overpayments and can cover medical, dental, vision and other types of health benefits. It should be performed by an independent firm or person that specializes in this type of work—ideally a firm...

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Due to the proliferation of counterfeit goods offered for sale within internet commerce websites, Miller Kaplan Arase LLP (“MKA”) has enhanced its trademark enforcement services that it can offer to its’ clients. MKA has now registered to participate on behalf of IP Rights Owners in eBay’s Verified Rights Owner (“VeRO”) Program.  eBay implemented the VeRO...

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The year is quickly drawing to a close, but there’s still time to take steps to reduce your 2015 tax liability — you just must act by December 31: 1.  Pay your 2015 property tax bill that’s due in early 2016. 2.  Make your January 1 mortgage payment. 3.  Incur deductible medical expenses (if your deductible...

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After you reach age 70½, you must take annual required minimum distributions (RMDs) from your IRAs (except Roth IRAs) and, generally, from your defined contribution plans (such as 401(k) plans). You also could be required to take RMDs if you inherited a retirement plan (including Roth IRAs). If you don’t comply — which usually requires...

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Recently, the IRS released the 2016 annually adjusted amount for the unified gift and estate tax exemption and the generation-skipping transfer (GST) tax exemption: $5.45 million (up from $5.43 million in 2015). But even with the rising exemptions, annual exclusion gifts offer a valuable tax-saving opportunity. The 2015 gift tax annual exclusion allows you to give...

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From the Thanksgiving kick-off of the holiday season through December 31, many businesses find themselves short-staffed as employees take time off to spend with family and friends. But if you limit how many vacation days employees can roll over to the new year, you might find your workplace to be nearly a ghost town as...

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While tax consequences should never drive investment decisions, it’s critical that they be considered — especially by higher-income taxpayers, who may be facing the 39.6% short-term capital gains rate, the 20% long-term capital gains rate and the 3.8% net investment income tax (NIIT). Holding on to an investment until you’ve owned it more than one year...

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Donations to qualified charities are generally fully deductible, and they may be the easiest deductible expense to time to your tax advantage. After all, you control exactly when and how much you give. But before you donate, it’s critical to make sure the charity you’re considering is indeed a qualified charity — that it’s eligible...

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If you’re saving for college, consider a Section 529 plan. Although contributions aren’t deductible for federal purposes, plan assets can grow tax-deferred. (Some states do offer tax incentives for contributing.) Distributions used to pay qualified expenses (such as tuition, mandatory fees, books, equipment, supplies and, generally, room and board) are income-tax-free for federal purposes and...

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The first step to smart timing is to project your business’s income and expenses for 2015 and 2016. With this information in hand, you can determine the best year-end timing strategy for your business. If you expect to be in the same or lower tax bracket in 2016, consider: Deferring income to 2016. If your...

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Now may be a great time to refinance, because mortgage rates are still low but expected to increase. Before deciding to refinance, however, here are a couple of tax consequences to consider: 1. Cash-out refinancing. If you borrow more than you need to cover your outstanding mortgage balance, the tax treatment of the cash-out portion...

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The additional Medicare tax and net investment income tax (NIIT) apply when certain income exceeds the applicable threshold: $250,000 for married filing jointly, $125,000 for married filing separately, and $200,000 for other taxpayers. The following types of executive compensation could be subject to the 0.9% additional Medicare tax if your earned income exceeds the applicable...

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Starting in 2016, applicable large employers (ALEs) under the Affordable Care Act (ACA) will have to file Forms 1094-C and 1095-C to provide information to the IRS and plan participants regarding their health care benefits for the previous year. Both the forms and their instructions are now available for ALEs to study and begin preparations...

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Medical expenses that aren’t reimbursable by insurance or paid through a tax-advantaged account (such as a Health Savings Account or Flexible Spending Account) may be deductible — but generally only to the extent that they exceed 10% of your adjusted gross income. Taxpayers age 65 and older can enjoy a 7.5% floor through 2016. The...

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Although a vehicle’s value typically drops fairly rapidly, the tax rules limit the amount of annual depreciation that can be claimed on most cars and light trucks. Thus, when it’s time to replace a vehicle used in business, it’s not unusual for its tax basis to be higher than its value. If you trade a...

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Miller Kaplan Arase Concludes Agreement with Hungerford Nichols CPAs + Advisors to Assume Its Broadcast Client Relationships North Hollywood, CA, September 24th, 2015  – Miller Kaplan Arase, one of the top 100 accounting firms in the U.S., announced today that it has concluded an agreement to assume the Hungerford Nichols CPAs + Advisors  broadcast client...

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Contributing to a traditional employer-sponsored defined contribution plan, such as a 401(k), 403(b) or 457 plan, offers many benefits: Contributions are pretax, reducing your modified adjusted gross income (MAGI), which can also help you reduce or avoid exposure to the 3.8% net investment income tax. Plan assets can grow tax-deferred — meaning you pay no...

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As you are aware, an excise tax is imposed on employers for any failure of their group health plans to meet group health plan requirements with respect to: portability, access, and renewability requirements; benefits for mothers and newborns; mental health benefits; dependent students on medically necessary leave of absence; and the Affordable Care Act (ACA) (e.g.,...

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A tax exempt organization may need a letter to confirm its tax-exempt status or to reflect a change in its name or address.  If so, an organization may generally contact Customer Account Services by phone, letter, or fax to request an affirmation letter. A letter or fax requesting an affirmation letter must include your organization’s...

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Here’s a simplified way to project your estate tax exposure. Take the value of your estate, net of any debts. Also subtract any assets that will pass to charity on your death. Then, if you’re married and your spouse is a U.S. citizen, subtract any assets you’ll pass to him or her. Those assets qualify...

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The Financial Accounting Standards Board (FASB) recently issued ASU 2015-12 Plan Accounting:  Topic 960, Defined Benefit Pension Plans; Topic 962, Defined Contribution Pension Plans; Topic 965, Health and Welfare Benefit Plans.  The guidance consists of three parts: Part I designates contract value as the only required measure for fully benefit-responsive investment contracts.  An adjustment to...

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With Congress returning from its August recess, this is the question on tax-savvy Americans’ minds. Many valuable tax breaks aren’t permanent, so Congress has to pass legislation extending them to keep them in effect. Unfortunately, Congress often waits until the last minute to do so. For example, Congress didn’t pass 2014 extenders until December 2014,...

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The Financial Accounting Standards Board (FASB) recently issued ASU 2015-07 Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). Entities measuring investments at net asset value per share (NAV) as a practical expedient are no longer required to categorize such investments within the fair value hierarchy. The investments...

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The tax treatment of investment income varies, and not just based on whether the income is in the form of dividends or interest. Qualified dividends are taxed at the favorable long-term capital gains tax rate (generally 15% or 20%) rather than at the applicable ordinary-income tax rate (which might be as high as 39.6%). Interest...

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If your business exports American-made goods or performs architectural or engineering services for foreign construction projects, an interest-charge domestic international sales corporation (IC-DISC) can help slash your tax bill. An IC-DISC is a “paper” corporation you set up to receive commissions on export sales, up to the greater of 50% of net income or 4%...

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If you’re a collector, donating from your collection instead of your bank account or investment portfolio can be tax-smart. When you donate appreciated property rather than selling it, you avoid the capital gains tax you would have incurred on a sale. And long-term gains on collectibles are subject to a higher maximum rate (28%) than...

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The IRS plans to amend minimum distribution rules for defined benefit plans to prohibit lump sum payments in lieu of ongoing annuity payments. The new requirement is to be effective July 9, 2015.

Teenagers’ retirement may seem too far off to warrant saving now, but IRAs can be perfect for teens precisely because they’ll likely have many years to let their accounts grow tax-deferred or tax-free. The 2015 contribution limit is the lesser of $5,500 or 100% of earned income. A teen’s traditional IRA contributions typically are deductible,...

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Mortgage interest rates are still at historically low levels, but they’re expected to go up by year end. So if you’ve been thinking about helping your child — or grandchild — buy a home, consider acting soon. There also are some favorable tax factors that will help: 0% capital gains rate. If the child is...

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Tread carefully when determining compensation for S corp. shareholder-employees By distributing profits in the form of dividends rather than salary, an S corporation and its owners can avoid payroll taxes on these amounts. Because of the additional 0.9% Medicare tax on wages in excess of $200,000 ($250,000 for joint filers and $125,000 for married filing...

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With nonqualified stock options (NQSOs), if the stock appreciates beyond your exercise price, you can buy shares at a price below what they’re trading for. This is the same as for the perhaps better-known incentive stock options (ISOs). The tax treatment of NQSOs, however, differs from that of ISOs: NQSOs create compensation income — taxed...

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If you usually receive a large federal income tax refund, you’re essentially making an interest-free loan to the IRS. Rather than wait until you file your 2015 tax return in 2016, why not begin enjoying your “refund” now by reducing your withholdings or estimated tax payments for the remainder of 2015? It’s particularly important to...

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On June 26, the U.S. Supreme Court ruled that same-sex couples have a constitutional right to marry, making same-sex marriage legal in all 50 states. For federal tax purposes, same-sex married couples were already considered married, under the Court’s 2013 decision in United States v. Windsor and subsequent IRS guidance — even if their state...

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Washington, D.C. (June 22, 2015) – The American Institute of CPAs (AICPA) offered more than 40 recommendations to the Internal Revenue Service (IRS) last week for the Form 990, Return of Organization Exempt from Income Tax, and instructions. The recommendations include adding thresholds throughout the instructions at the top of any schedule, part or line that...

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With the U.S. Supreme Court’s June 25 decision upholding the Affordable Care Act (ACA) yet again, employers subject to the act’s information reporting provision can no longer afford to put off planning in the hope that the requirements might go away. Beginning in 2016, “large” employers as defined by the act (generally employers with 50...

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Recently the Los Angeles Business Journal invited one of our partners, Michael Kaplan, to participate in a roundtable discussion on business accounting. The participants discussed various trends, financial advice and a glimpse into the state of business accounting in 2015. Please click the image to read the article.

A potential downside of tax-deferred saving through a traditional retirement plan is that you’ll have to pay taxes when you make withdrawals at retirement. Roth plans, on the other hand, allow tax-free distributions; the tradeoff is that contributions to these plans don’t reduce your current-year taxable income. Unfortunately, modified adjusted gross income (MAGI)-based phaseouts may...

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Even though portability now allows married couples to use up both spouses’ estate tax exemptions without having to make lifetime asset transfers or set up trusts, this “easier” path isn’t necessarily the better path. For couples with large estates, making lifetime asset transfers and setting up trusts can provide benefits that exemption portability doesn’t offer....

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If you donate your vehicle, the value of your deduction can vary greatly depending on what the charity does with it. You can deduct the vehicle’s fair market value (FMV) if the charity: Uses the vehicle for a significant charitable purpose (such as delivering meals-on-wheels to the elderly), Sells the vehicle for substantially less than...

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As the school year draws to a close, it’s a good time to think about Coverdell Education Savings Accounts (ESAs) — especially if you have young children. One major advantage of ESAs over another popular education saving tool, the Section 529 plan, is that tax-free ESA distributions aren’t limited to college expenses; they also can...

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Income and losses from investment real estate or rental property are passive by definition — unless you’re a real estate professional. Why is this important? Passive income may be subject to the 3.8% net investment income tax (NIIT), and passive losses are deductible only against passive income, with the excess being carried forward. To qualify...

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Generally, businesses are limited to deducting 50% of allowable meal and entertainment (M&E) expenses. But certain expenses are 100% deductible, including expenses: For food and beverages furnished at the workplace primarily for employees, Treated as employee compensation, That are excludable from employees’ income as de minimis fringe benefits, For recreational or social activities for employees,...

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Incentive stock options allow you to buy company stock in the future at a fixed price equal to or greater than the stock’s fair market value on the grant date. If the stock appreciates, you can buy shares at a price below what they’re then trading for. ISOs must comply with many rules but receive...

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The additional 0.9% Medicare tax applies to FICA wages and self-employment income exceeding $200,000 per year ($250,000 for married filing jointly and $125,000 for married filing separately). Unfortunately, the withholding rules have been tripping up some taxpayers, causing them to face an unexpected tax bill — plus interest and penalties — when they file their...

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When a company’s deductible expenses exceed its income, generally a net operating loss (NOL) occurs (though of course the specific rules are more complex). If when filing your 2014 income tax return you’ve found that your business had an NOL, there is an upside: tax benefits. When a business incurs a qualifying NOL, the loss...

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The IRS considers a paper return that’s due April 15 to be timely filed if it’s postmarked by midnight on April 15.  But dropping your return in a mailbox on the 15th may not be sufficient. For example, let’s say you mail your return with a payment on April 15, but the envelope gets lost. ...

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On March 17, 2015, SD-3C LLC won a summary judgment of more than $69 million when a federal judge ruled that two Chinese companies and four of its executives were guilty of fraud, trademark infringement, and breach of contract after underreporting sales and royalties on the sale of memory card technology licensed by SD-3C. In...

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Miller Kaplan Arase, one of the top 100 accounting firms in the U.S., proudly announced the promotions of Alexandra Chernyak, Justine Grant Ruffalo and Stephen Ozen into the firm’s partnership, effective March 1, 2015. Douglas Waite, Managing Partner said, “It’s a pleasure to welcome Alex, Justine and Stephen to the partnership.  Their depth of industry...

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Generally, you'll need to file a gift tax return for 2014 if, during the tax year, you made gifts: That exceeded the $14,000-per-recipient gift tax annual exclusion (other than to your U.S. citizen spouse), That you wish to split with your spouse to take advantage of your combined $28,000 annual exclusions, or Of future interests --...

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If your business has made repairs to tangible property, such as buildings, machinery, equipment and vehicles, you may be eligible for a deduction on your 2014 income tax return. But you must make sure they were truly "repairs," and not actually "improvements." Why? Costs incurred to improve tangible property must be depreciated over a period...

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Investment interest -- interest on debt used to buy assets held for investment, such as margin debt used to buy securities -- generally is deductible for both regular tax and alternative minimum tax purposes. But special rules apply that can make the deduction less beneficial than you might think. Your investment interest deduction is limited...

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If you don't meet IRS substantiation requirements, your charitable deductions could be denied. To comply, generally you must obtain a contemporaneous written acknowledgment from the charity stating the amount of the donation, whether you received any goods or services in consideration for the donation, and the value of any such goods or services. If you...

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If you have a child in college, you may not qualify for the American Opportunity credit on your 2014 income tax return because your income is too high (modified adjusted gross income phaseout range of $80,000-$90,000; $160,000-$180,000 for joint filers), but your child might. The maximum credit, per student, is $2,500 per year for the...

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The manufacturers' deduction, also called the "Section 199" or "domestic production activities" deduction, is 9% of the lesser of qualified production activities income or taxable income. The deduction is also limited to 50% of W-2 wages paid by the taxpayer that are allocable to domestic production gross receipts. Yes, the deduction is available to traditional manufacturers. But...

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You probably know that miles driven for business purposes can be deductible.  But did you know that you might also be able to deduct miles driven for other purposes?  The rates vary depending on the purpose and the year. Business: 56 cents (2014), 57.5 cents (2015) Medical: 23.5 cents (2014), 23 cents (2015) Moving: 23.5...

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If you're like many Americans, you may not start thinking about filing your tax return until the April 15 deadline is just a few weeks - or perhaps even just a few days - away.  But there's another date you should keep in mind: Jan. 20.  That's the date the IRS began accepting 2014 returns,...

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An annual estate plan checkup is critical to the health of your estate plan. Because various exclusion, exemption and deduction amounts are adjusted for inflation, they can change from year to year, impacting your plan:   2014 2015 Lifetime gift and estate tax exemption $5.34 million $5.43 million Generation-skipping transfer tax exemption $5.34 million $5.43...

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990 Changes The 2014 990 instructions have been updated to clarify that compensation earned or accrued in the current year should be included in Reportable Compensation,  if deferred no more than 2½ months after year-end.

The Tax Increase Prevention Act of 2014 (TIPA) extended through Dec. 31, 2014, a wide variety of tax breaks, including many tax credits — which are particularly valuable because they reduce taxes dollar-for-dollar. Here are three credits that businesses may benefit from when they file their 2014 returns: 1. The research credit. This credit (also...

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Plan management is responsible for establishing internal controls over financial reporting, including proper valuation and appropriate presentation in conformity with U.S. generally accepted accounting principles (GAAP). Hard to value assets have recently been identified as an area of focus by the Department of Labor and there’s no better time to tighten up your plan’s controls....

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On Dec. 19, the president signed into law the Tax Increase Prevention Act of 2014 (TIPA), which extended through Dec. 31, 2014, many valuable tax breaks that had expired at the end of 2013. Here are three that individuals may be able to take advantage of when filing their 2014 returns: State and local sales...

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This is our annual information brief that is primarily intended to address payroll tax matters and information reporting requirements.  We will not address corporate inversions, sales tax nor detail the provisions of the Affordable Care Act beyond the basic reporting requirements.  We do touch on a few other federal and California tax matters that relate...

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Many retirement plan contribution limits increase slightly in 2015; thus, you may have opportunities to increase your retirement savings: Type of limitation 2014 limit 2015 limit Elective deferrals to 401(k), 403(b), 457(b)(2) and 457(c)(1) plans $17,500 $18,000 Annual benefit for defined benefit plans $210,000 $210,000 Contributions to defined contribution plans $52,000 $53,000 Contributions to SIMPLEs...

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On Dec. 16, the Senate passed the Tax Increase Prevention Act of 2014 (TIPA), which the House had passed on Dec. 3. TIPA extended many valuable tax breaks that expired at the end of 2013 — but only through Dec. 31, 2014. Here are three types of extended tax breaks that you may want to...

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On Dec. 16, the Senate passed the Tax Increase Prevention Act of 2014 (TIPA), which the House had passed on Dec. 3. TIPA is the latest “extender” package, a stopgap measure that retroactively extends through Dec. 31, 2014, certain tax relief provisions that expired at the end of 2013. It was drafted after the collapse...

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The 2014 gift tax annual exclusion allows you to give up to $14,000 per recipient tax-free without using up any of your lifetime gift tax exemption. If you and your spouse “split” the gift, you can give $28,000 per recipient. The gifted assets are removed from your taxable estate, which can be especially advantageous if...

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North Hollywood, CA (December 10, 2014) - Miller Kaplan Arase, one of the U.S. top 100 accounting firms, has announced the addition of Vincent Leoni, CPA as a Partner in our Licensing and Royalties practice. Douglas Waite, Managing Partner said, “It’s a pleasure to welcome Vince to the partnership. His depth of licensing and entertainment...

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To take a 2014 charitable donation deduction, the gift must be made by Dec. 31, 2014. According to the IRS, a donation generally is “made” at the time of its “unconditional delivery.” But what does this mean? Is it the date you, for example, write a check or make an online gift via your credit...

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Appreciating investments that don’t generate current income aren’t taxed until sold, deferring tax and perhaps allowing you to time the sale to your tax advantage. Review your year-to-date gains and losses now to see if selling any additional investments by Dec. 31 can reduce your 2014 tax liability. For example, if you’ve cashed in some...

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If you’re looking to reduce your 2014 tax bill, you may want to consider purchasing a business vehicle before year end. Business-related purchases of new or used vehicles may be eligible for Section 179 expensing, which allows you to expense, rather than depreciate over a period of years, some or all of the vehicle’s cost....

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Michael Kaplan, partner at Miller Kaplan Arase LLP has been named as one of Variety's 2014 Business Managers Elite. Michael Kaplan prides himself on being able to see the big financial picture for his clients, who include actors, producers, writers, directors, athletes, high net worth individuals, executives and musicians. He estimates his company has grown 50%...

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Smart timing of deductible expenses can reduce your tax liability, and poor timing can unnecessarily increase it. When you don’t expect to be subject to the alternative minimum tax (AMT) in the current year, accelerating deductible expenses into the current year typically is a good idea. Why? Because it will defer tax, which usually is...

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With the midterm elections now behind us and control of the U.S. Senate set to shift parties in January, it’s time to revisit the valuable tax breaks that expired at the end of 2013. Will the lame-duck 113th Congress revive any of them for 2014? Or will nothing happen until the 114th Congress goes into...

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The long-term capital gains rate is 0% for gain that would be taxed at 10% or 15% based on the taxpayer’s ordinary-income rate. If you have loved ones in the 0% bracket, you may be able to take advantage of it by transferring appreciated assets to them. The recipients can then sell the assets at...

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Typically, it’s better to defer tax. Here are two timing strategies that can help businesses do this: Defer income to next year. If your business uses the cash method of accounting, you can defer billing for your products or services. Or, if you use the accrual method, you can delay shipping products or delivering services....

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A fundamental tax planning strategy is to accelerate deductible expenses into the current year. This typically will defer — and in some cases permanently reduce — your taxes. But there are exceptions. One is if the additional deductions this year trigger the alternative minimum tax (AMT). This is a separate tax system that limits some...

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If you’re self-employed, you may be able to set up a retirement plan that allows you to make much larger contributions than you could make as an employee. For example, the maximum 2014 employee contribution to a 401(k) plan is $17,500 — $23,000 if you’re age 50 or older. Look at how the limits for...

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Are you planning to make charitable donations before year end? Do you own appreciated stock that you’d like to sell, but you’re concerned about the tax hit? Then consider donating it to charity rather than making a cash gift. Appreciated publicly traded stock you’ve held more than one year is long-term capital gains property. If...

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For assets with a useful life of more than one year, businesses generally must depreciate the cost over a period of years. Special breaks are available in some circumstances, but uncertainty currently surrounds them: Section 179 expensing. This allows you to deduct, rather than depreciate, the cost of purchasing eligible assets. Currently the expensing limit...

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If you’ve cashed in some big gains this year, consider looking for unrealized losses in your portfolio and selling those investments before year end to offset your gains. This can reduce your 2014 tax liability. But if you want to minimize the impact on your asset allocation, keep in mind the wash sale rule. It...

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If you’re an executive or other key employee, you might be compensated with more than just salary, fringe benefits and bonuses: You might also be awarded stock-based compensation, such as restricted stock or stock options. Another form that’s becoming more common is restricted stock units (RSUs). RSUs are contractual rights to receive stock (or its...

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You can be subject to penalties if you don’t pay enough tax during the year through estimated tax payments and withholding. Here are some strategies to protect yourself: Know the minimum payment rules. Your estimated payments and withholding must equal at least 90% of your tax liability for 2014 or 100% of your 2013 tax...

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With summer drawing to a close, if you own a vacation home that you both rent out and use personally, it’s a good time to review the potential tax consequences: • If you rent it out for less than 15 days, you don’t have to report the income. But expenses associated with the rental won’t...

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Now’s the time of year when many young adults are about to head back to college — or to enter their first year of higher education. If you have a grandchild who’ll be in college this fall and you’re concerned about gift and estate taxes, you may want to consider paying some of his or...

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Many expenses that may qualify as miscellaneous itemized deductions are deductible for regular tax purposes only to the extent they exceed, in aggregate, 2% of your adjusted gross income (AGI). Bunching these expenses into a single year may allow you to exceed this “floor.” So now is a good time to add up your potential...

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A taxable sale of a business might be structured as an installment sale if the buyer lacks sufficient cash or pays a contingent amount based on the business’s performance. An installment sale also may make sense if the seller wishes to spread the gain over a number of years — which could be especially beneficial...

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If you have a traditional IRA, you might benefit from converting some or all of it to a Roth IRA. A conversion can allow you to turn tax-deferred future growth into tax-free growth. It also can provide estate planning advantages: Roth IRAs don’t require you to take distributions during your life, so you can let...

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Would you like to benefit charity while reducing the size of your taxable estate yet maintain an income stream for yourself? Would you also like to divest yourself of highly appreciated assets and diversify your portfolio with minimal tax consequences? Then consider a CRT. Here’s how it works: When you fund the CRT, you receive...

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There is an old expression that says, “If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck.” It seems the U.S. Supreme Court applied the “duck test” when on June 25th, in a 6-3 ruling, the Court determined that Aereo, an online video streaming...

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Earlier this year, the U.S. Tax Court made a controversial ruling regarding IRA rollovers that contradicted an IRS publication designed to explain the law to taxpayers. In Bobrow v. Commissioner, the court ruled that the one-rollover-per-year rule applies to all of a taxpayer’s IRAs in aggregate, rather than on an account-by-account basis. The IRS had...

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An employer enjoys several advantages when it classifies a worker as an independent contractor rather than as an employee. For example, it isn’t required to pay payroll taxes, withhold taxes, pay benefits or comply with most wage and hour laws. However, there’s a potential downside: If the IRS determines that you’ve improperly classified employees as...

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According to the U.S. Department of Homeland Security, counterfeiting and fraud cost intellectual property owners more than $1.26 billion in financial losses during fiscal 2012. In addition to the negative economic impact, counterfeit and pirated goods pose a serious threat to the health and safety of consumers. For example, counterfeit products such as pharmaceuticals and...

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With the gift and estate tax exemptions currently at $5.34 million, you might think that estate valuations are less important. But even if you believe that your estate’s value is under the exemption amount, it’s still important to know the value of your assets. First, your estate might be worth more than you think. For...

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Information requested from a licensee during a royalty inspection (commonly referred to as an “audit”) is sometimes not available or not willingly provided by a licensee. The reason may be an interpretational issue within the license agreement, an unwillingness to disclose unreported licensed sales or other issues. As an alternative to demanding or threatening the...

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Recently the Los Angeles Business Journal invited one of our partners, Michael Kaplan, to participate in a roundtable discussion on business accounting. The participants discussed various trends, financial advice and a glimpse into the state of business accounting in 2014. Please click the image to read the article.

Summer is a common time to put a home on the market. If you’re among those who are following this trend, it’s important to be aware of the tax consequences. If you’re selling your principal residence, you can exclude up to $250,000 ($500,000 for joint filers) of gain — as long as you meet certain...

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Kelly Harper is a partner in the employee benefit plans group in our San Francisco office, where she specializes in both multi and single employer employee benefit plans. Kelly has more than 20 years of experience in auditing employee benefit plans, including analyzing internal controls of many large administrators who handle and administer employee benefit...

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Restricted stock is stock that’s granted subject to a substantial risk of forfeiture. Income recognition is normally deferred until the stock is no longer subject to that risk or you sell it. You then pay taxes on the stock’s fair market value at your ordinary-income rate. But you can instead make a Section 83(b) election...

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In general, when meal and entertainment expenses are incurred in the context of an employer-employee or customer–independent contractor relationship, one party will be subject to a 50% limitation on the deduction. But which party? Last year, the IRS finalized regulations that address this question. In the employer-employee setting: If the employer reimburses the employee for...

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Did you know that while many tax rules are permanent, others are written to expire at some point in the future? These expiring items are often granted a temporary extension, but a significant number of popular “extenders” terminated at the end of 2013, including both credits and deductions. A number of credits for qualified energy...

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The Patient Protection and Affordable Care Act established a   Patient-Centered Outcomes Research Institute (PCORI) fee on plan sponsors of   applicable self-insured health plans for plan years ending after September   30, 2012.The PCORI fee is based on the following table: To determine the number of covered lives, applicable health   plans must use...

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The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) have issued new joint guidance that addresses one of the most important measures investors use when assessing a company’s performance and prospects — revenue. FASB’s version, communicated in Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, standardizes and simplifies...

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First and foremost, don’t take a lump-sum distribution from your old employer’s retirement plan. It generally will be taxable and, if you’re under age 59½, subject to a 10% early-withdrawal penalty. Here are three alternatives: 1. Stay put. You may be able to leave your money in your old plan. But if you’ll be participating...

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MKA Partner Michael Kaplan was recently featured in the San Fernando Valley Business Journal, regarding his expertise and the growing business of business management. Please click the image to read the article.    

The passing of Memorial Day marks the beginning of summer in the minds of many Americans. Although the kids might still be in school for another week or two, summer day camp is rapidly approaching for many families. If yours is among them, did you know that sending your child to day camp might make...

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If you’re considering donating a property to charity, here are three potential tax traps you need to be aware of: If you donate real estate to a public charity, you generally can deduct the property’s fair market value. But if you donate it to a private foundation, your deduction is limited to the lower of fair market value...

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Are you thinking about turning a business trip into a family vacation this summer? This can be a great way to fund a portion of your vacation costs. But if you’re not careful, you could lose the tax benefits of business travel. Generally, if the primary purpose of your trip is business, then expenses directly...

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This year, trusts are subject to the 39.6% ordinary-income rate and the 20% capital gains rate to the extent their taxable income exceeds $12,150. And the 3.8% net investment income tax applies to undistributed net investment income to the extent that a trust’s adjusted gross income exceeds $12,150. Three strategies can help you soften the...

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The Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2014-08 which lays out new guidance for financial reporting on discontinued operations.  The new rules will reduce the number of asset disposals that companies must present as discontinued operations in their financial statements.  However, companies must expand the disclosures that are required when discontinued operations...

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If during 2013 income tax return filing you found that your business had a net operating loss (NOL) for the year, the news isn’t all bad. While no one enjoys being unprofitable, an NOL does have an upside: tax benefits. In a nutshell, an NOL occurs when a company’s deductible expenses exceed its income —...

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If you still file a paper return, it’s important to know the IRS’s “timely mailed = timely filed” rule: If your tax return is due April 15, it’s considered timely filed if it’s postmarked by midnight on April 15. But just because you drop your return in a mailbox on the 15th doesn’t mean you’re...

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For you to deduct up to $3,900 on your 2013 tax return under the adult-dependent exemption, in most cases the parent must have less gross income for the tax year than the exemption amount. Generally Social Security is excluded, but payments from dividends, interest and retirement plans are included. In addition, you must have contributed...

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The Financial Accounting Standards Board (“FASB”) has issued its third update to Generally Accepted Accounting Principles (“GAAP”), offering an alternative to certain private companies permitting them to elect, in some circumstances, not to consolidate the financial reporting from variable interest entities (“VIEs”) that lease property to them.  It may apply in situations where an owner...

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Tax-advantaged retirement plans allow your money to grow tax-deferred — or, in the case of Roth accounts, tax-free. But annual contributions are limited by tax law, and any unused limit can’t be carried forward to make larger contributions in future years. So it’s a good idea to use up as much of your annual limits...

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The Financial Accounting Standards Board (“FASB”) issued two updates to Generally Accepted Accounting Principles (“GAAP”) that offer alternatives to certain private companies in the areas of Accounting for Goodwill and Derivatives and Hedging—Accounting for Interest Rate Swaps. These alternative standards streamline the method for goodwill impairment and make it easier for certain interest rate swaps...

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If you purchased qualifying assets by Dec. 31, 2013, you may be able to take advantage of these depreciation-related breaks on your 2013 tax return: 1. Bonus depreciation. This additional first-year depreciation allowance is, generally, 50%. Among the assets that qualify are new tangible property with a recovery period of 20 years or less and...

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Tax credits can be especially valuable because they reduce taxes dollar-for-dollar; deductions reduce only the amount of income that’s taxed. A couple of credits are available for higher education expenses: The American Opportunity credit — up to $2,500 per year per student for qualifying expenses for the first four years of postsecondary education. The Lifetime...

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One of the most common mistakes investors make is forgetting to increase their basis in mutual funds to reflect reinvested dividends. Many mutual fund investors automatically reinvest dividends in additional shares of the fund. These reinvestments increase tax basis in the fund, which reduces capital gain (or increases capital loss) when the shares are sold....

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For the last several years, taxpayers have been allowed to take an itemized deduction for state and local sales taxes in lieu of state and local income taxes. Although this break hasn’t yet been extended to 2014, it is available for 2013. It can be valuable if you reside in a state with no or...

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To support a charitable deduction, you need to comply with IRS substantiation requirements. This generally includes obtaining a contemporaneous written acknowledgment from the charity stating the amount of the donation, whether you received any goods or services in consideration for the donation, and the value of any such goods or services. “Contemporaneous” means the earlier of 1) the date...

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If your use of a home office is for your employer’s benefit or because you’re self employed, you may be able to deduct a portion of your mortgage interest, property taxes, insurance, utilities and certain other expenses, as well as the depreciation allocable to the office space. Or you may be able to take the...

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Certain health insurers are required to pay annual Patient-Centered Outcomes Research Institute Fees (PCORI Fees). First year fees are $1 per covered life, increasing to $2 in the second year and then adjusted annually by the Department of Health and Human Services thereafter. This fee is to be paid annually for seven years, using Internal...

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To help you make sure you don’t miss any important 2014 deadlines, we’ve provided this summary of when various tax-related forms, payments and other actions are due. Please review it and let us know if you have any questions about the deadlines or would like assistance in meeting them. January 15 Individuals: Paying final installment...

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Businesses both large and small are researching the idea of expanding or opening businesses in the People’s Republic of China (China) due to the tremendous potential to reach a market of over 1 billion people. Miller Kaplan has established a China Desk to assist our clients who are considering investing in businesses in China or...

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With the well-publicized security breach at major retailer Target recently, identity theft is likely on your mind. And stolen credit isn’t your only risk. In an increasingly common scam, identity thieves use victims’ personal information to file fraudulent tax returns electronically and claim bogus refunds. When the real taxpayers file their returns, they’re notified that...

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Under the Affordable Care Act (ACA), beginning in 2013, taxpayers with FICA wages over $200,000 per year ($250,000 for joint filers and $125,000 for married filing separately) had to pay an additional 0.9% Medicare tax on the excess earnings. Unlike regular Medicare taxes, the additional Medicare tax doesn’t include a corresponding employer portion. But employers...

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Now that we’re in the new year, it’s time for an estate plan checkup. Why? First, various exclusion, exemption and deduction amounts are adjusted for inflation and can change from year to year, so it’s a good idea to see if they warrant any updates to your estate plan:   2013 2014 Lifetime gift and...

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Many valuable tax breaks expired at the end of 2013. But Congress probably will revive at least some of them, likely retroactively to Jan. 1, 2014. The question is exactly which breaks they’ll extend and when they’ll pass the necessary legislation to do so. Here are several that may benefit you or your business if...

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As part of the Patient Protection and Affordable Care Act, self-insured health plans will be required to pay a transitional reinsurance fee starting at $63 per-year, per covered life or $5.25 per month. This fee is in addition to the PCORI fee. It is transitional in nature, spanning from 2014 through 2016. The fee applies...

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With the new year upon us, it’s time to start thinking about 2014 retirement plan contributions. Contributing the maximum you’re allowed to an employer-sponsored defined contribution plan is likely a smart move: Contributions are typically pretax. Plan assets can grow tax-deferred — meaning you pay no income tax until you take distributions. Your employer may match some or all of...

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On Dec. 6 the Internal Revenue Service released the 2014 optional standard mileage rates. As of Jan. 1, 2014, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be: 56 cents per mile for business miles driven 23.5 cents per mile driven for medical or moving purposes 14 cents...

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For 2013, the maximum IRA contribution is $5,500 — $6,500 if you’re age 50 or older on Dec. 31. (The maximum IRA  contribution or deduction may be reduced or eliminated depending on various factors.) But if you’re self-employed, you may be eligible for a retirement plan that allows you to make much larger contributions. As...

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Maybe. Deductions are more valuable when tax rates are higher, and higher-income taxpayers face higher rates in 2013. But the return of the itemized deduction reduction could make your donation deduction less valuable. Also keep in mind that the amount of your deduction depends on various factors, including what you give. For example: Long-term capital...

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The implementation of the Affordable Care Act, gridlock in Washington, the court decision invalidating the Defense of Marriage Act, and the NSA Spying scandal were among the top domestic stories of 2013. We trust that you made it through and hope that we can assist you to deal with the increasing responsibilities of employers in...

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While tax consequences should never drive investment decisions, it’s critical that they be considered — especially this year: Higher-income taxpayers may face more taxes on their investment income in the form of the returning 39.6% top short-term capital gains rate and 20% top long-term capital gains rate and a new 3.8% net investment income tax...

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By projecting your business’s income and expenses for 2013 and 2014, you can determine how to time them to save — or at least defer — tax. If you’ll be in the same or lower tax bracket in 2014, consider: Deferring income to 2014. If your business uses the cash method of accounting, you can...

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Information requested from a licensee during a royalty inspection (commonly referred to as an “audit”) is sometimes not available or not willingly provided by a licensee.  The reason may be an interpretational issue within the license agreement or an unwillingness to disclose unreported licensed sales or any number of other issues.  As an alternative to...

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Michael Kaplan, partner at Miller Kaplan Arase LLP has been named one of Variety's 2013 Business Managers Elite. Full print PDF can be downloaded here, story on page 86.

It may be in error. The Internal Revenue Service has sent erroneous penalty notices (CP 283s) to Form 5500 filers who filed their returns before an extension (Form 5558) had been processed. Help center representatives at the IRS have been advised to remove penalties when they are contacted. The representatives will then prepare a letter...

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As year end approaches, you may be trying to accelerate deductible expenses into 2013 to reduce, or at least defer, tax. But you must beware of the alternative minimum tax (AMT) — a separate tax system that limits some deductions and doesn’t permit others, such as: State and local income tax deductions, Property tax deductions, and...

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From the IRS: "The Internal Revenue Service today announced cost‑of‑living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2014. Some pension limitations such as those governing 401(k) plans and IRAs will remain unchanged because the increase in the Consumer Price Index did not meet the statutory thresholds for their...

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Recently, the IRS released the 2014 annually adjusted amount for the unified gift and estate tax exemption and the generation-skipping transfer (GST) tax exemption: $5.34 million (up from $5.25 million in 2013). But even with the rising exemptions, making annual exclusion gifts is still a good idea. The 2013 gift tax annual exclusion allows you...

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If you’re age 70½ or older, you can make a direct contribution — up to $100,000 — from your IRA to a qualified charitable organization in 2013 without owing any income tax on the distribution. This “charitable IRA rollover” can be used to satisfy required minimum distributions. The American Taxpayer Relief Act of 2012 (ATRA)...

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The Internal Revenue Service has provided a useful 10-question checklist for plan sponsors to test compliance with important rules. Use the online tool to learn more about how to find, fix and avoid common mistakes. Click on the image below for additional information linked to each question.   If you have any questions, please contact...

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Maybe. The following types of executive compensation could be subject to the health care act’s 0.9% additional Medicare tax: Fair market value (FMV) of restricted stock once the stock is no longer subject to risk of forfeiture or it’s sold FMV of restricted stock when it’s awarded if you make a Section 83(b) election Bargain element of nonqualified...

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Contributing the maximum you’re allowed to an employer-sponsored defined contribution plan, such as a 401(k), 403(b) or 457 plan, is likely a smart move: Contributions are typically pretax, reducing your modified adjusted gross income (MAGI), which can also help you reduce or avoid exposure to the new 3.8% Medicare tax on net investment income. Plan assets can...

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Since 2007, homeowners have been allowed to exclude from their taxable income up to $2 million in cancellation-of-debt (COD) income ($1 million for married taxpayers filing separately) in connection with qualified principal residence indebtedness (QPRI). The exclusion had been available only for debts forgiven through 2012, but Congress extended it. Now that expiration date —...

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According to the U.S. Department of Homeland Security, counterfeiting and fraud cost intellectual property owners more than $1.26 billion in financial losses during fiscal 2012.  In addition to the negative economic impact, counterfeit and pirated goods pose a serious threat to the health and safety of consumers.  For example, counterfeit products such as pharmaceuticals and...

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Under the health care act, starting in 2013, taxpayers with modified adjusted gross income (MAGI) over $200,000 per year ($250,000 for joint filers and $125,000 for married filing separately) may owe a new Medicare contribution tax, also referred to as the “net investment income tax” (NIIT). The tax equals 3.8% of the lesser of your...

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With the clock ticking down on the extended October 15, 2013 Form 5500 deadline for pension plans with a December 31, 2012 year end, it's not too late to put your game plan in place to gather all the necessary information for a successful Form 5500 submission. The information required to accurately complete Form 5500...

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Medical expenses that aren’t reimbursable by insurance or paid through a tax-advantaged account (such as a Health Savings Account or Flexible Spending Account) may be deductible — but only to the extent that they exceed 10% of your adjusted gross income. Before 2013, the floor was only 7.5% for regular tax purposes. (Taxpayers age 65...

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Media properties are moving quickly to both understand and deploy into the mobile world.  With the continued growth of mobile devices, there is more division of the user’s time.  Media properties realize this and are working hard to capture the attention of the user. In Radio, a prominent industry CEO has been tireless in his...

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In response to the U.S. Supreme Court’s June decision regarding same-sex marriage, the IRS recently clarified that married same-sex couples will be treated as married for all federal tax provisions in which marriage is a factor, such as filing status, dependent exemptions and child credits, and gift and estate tax breaks. Significantly, the Supreme Court...

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In January, Congress extended some depreciation-related tax breaks that can benefit owners of leasehold, restaurant and retail properties: 50% bonus depreciation Congress extended this additional first-year depreciation allowance to qualifying leasehold improvements made in 2013. Section 179 expensing Congress revived through 2013 the election to deduct under Sec. 179 (rather than depreciate over a number...

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As the kids head back to school, it’s a good time to think about Coverdell Education Savings Accounts (ESAs). One major advantage of ESAs over another popular education saving tool, the Section 529 plan, is that tax-free ESA distributions aren’t limited to college expenses; they also can fund elementary and secondary school costs. That means...

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Many provisions of the Patient Protection and Affordable Care Act of 2010 have recently gone into effect, and some significant provisions will do so in 2014 and 2015. To help individuals and families, employers (both large and small), and other organizations learn more about how they’ll be affected, the IRS has launched a new website:...

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Congress’s decision not to include a proposed minimum term for grantor retained annuity trusts (GRATs) in the tax legislation passed back in January — combined with low interest rates — may make it an ideal time to add short-term GRATs to your estate planning arsenal. A GRAT consists of an annuity interest, retained by you,...

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If you rent out your vacation home for 15 days or more, you must report the income. But exactly what expenses you can deduct depends on whether the home is classified as a rental property for tax purposes, based on the amount of personal vs. rental use. Adjusting your personal use — or the number...

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If you’re in need of cash, early retirement plan withdrawals generally should be a last resort. With a few exceptions, distributions before age 59½ are subject to a 10% penalty on top of any income tax that ordinarily would be due on a withdrawal. Additionally, you’ll lose the potential tax-deferred future growth on the withdrawn...

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The Patient Protection and Affordable Care Act of 2010’s shared responsibility provision, commonly referred to as “play or pay,” was scheduled to take effect Jan. 1, 2014. But on July 2, the U.S. Treasury announced that the effective date would be delayed one year, to Jan. 1, 2015. IRS guidance will be issued providing more...

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On June 26, the U.S. Supreme Court struck down Section 3 of the 1996 Defense of Marriage Act (DOMA) as a violation of the U.S. Constitution’s guarantee of equal protection under the law. Sec. 3 defined marriage for federal benefits purposes as being between a man and a woman, thus denying federal benefits — including...

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Day camp is a qualified expense under the child or dependent care credit, which is worth 20% of qualifying expenses (more if your adjusted gross income is less than $43,000), subject to a cap. For 2013, the maximum expenses allowed for the credit are $3,000 for one qualifying child and $6,000 for two or more....

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Under the health care act, starting in 2013, taxpayers with earned income over $200,000 per year ($250,000 for joint filers and $125,000 for married filing separately) must pay an additional 0.9% Medicare tax on the excess earnings. Employers are required to withhold the tax beginning in the pay period in which wages exceed $200,000 for...

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When you sell your principal residence, you can exclude up to $250,000 ($500,000 for joint filers) of gain if you meet certain tests. Gain that qualifies for exclusion also is excluded from the new 3.8% Medicare contribution tax. Losses on the sale of your home aren’t deductible. But if part of it is rented or...

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If you’re considering expanding your staff, hiring from certain disadvantaged groups before the end of 2013 can save you tax. The American Taxpayer Relief Act of 2012 extended the Work Opportunity credit for hires from most eligible groups through 2013. Examples of eligible groups include food stamp recipients, ex-felons and nondisabled veterans who’ve been unemployed...

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With commencement ceremonies for high school seniors coming up, many parents and grandparents are contemplating making cash gifts the student can use for college expenses. But if gift and estate taxes are a concern, consider a potentially more tax-efficient gift: paying some of the child’s college tuition. Cash gifts to an individual generally are subject...

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Most IRA owners invest their funds in traditional assets, such as stocks, bonds and mutual funds. But some intrepid investors have enjoyed impressive, tax-deferred returns — or even tax-free returns in the case of a Roth IRA — by using their IRAs to hold rental real estate, business interests or other alternative assets. Despite the...

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Partner Brian Harris sheds light on questions regarding allowances for doubtful accounts in this in-depth article from The Financial Manager Magazine, provided by the Media Finance Manager Association. Allowances for Doubtful Accounts What method should be used to determine an allowance for doubtful accounts? Should it be done at the corporate level or by local...

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Exemption portability, made permanent by the American Taxpayer Relief Act of 2012, provides significant estate planning flexibility to married couples if sufficient planning hasn’t been done before the first spouse’s death. How does exemption portability work? If one spouse dies and part (or all) of his or her estate tax exemption is unused at death, the...

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With the 2012 tax filing season behind us, it’s time to start thinking seriously about 2013 tax planning — especially if you’re a higher-income taxpayer, because you might be subject to one or more significant tax increases this year: Taxpayers with FICA wages and self-employment income exceeding $200,000 for singles and $250,000 for joint filers...

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If you purchased from out of state retailers without paying sales tax, the California Use Tax requires you to report and pay tax on those purchases.   Reviewing your records, such as email receipts, invoices or credit card statements will help you determine if you owe use tax. This information is due to the State of...

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For many years, the research credit (also commonly referred to as the “research and development” or “research and experimentation” credit) has provided an incentive for businesses to increase their investments in research. But the credit expired at the end of 2011. The American Taxpayer Relief Act of 2012 (ATRA) extends the credit to 2012 and...

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The Patient Protection and Affordable Care Act The Patient Protection and Affordable Care Act establishes a fee of $1 per covered life for self-insured health plans starting with fiscal years ending after September 30, 2012. The rate increases to $2 the second year and is adjusted by the Department of Health and Human Services thereafter....

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Miller Kaplan Arase LLP, a regional West Coast accounting and advisory firm, has been listed as the 84th largest accounting firm in the United States in the Top 100 Accounting Firms list by Accounting Today. Miller Kaplan’s continued success stems from dedicated professionals who provide personalized service and add value to our clients.  Miller Kaplan...

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Generally, you’ll need to file a gift tax return for 2012 if, during the tax year, you made gifts: That exceeded the $13,000-per-recipient gift tax annual exclusion (other than to your U.S. citizen spouse), That you wish to split with your spouse to take advantage of your combined $26,000 annual exclusions, or Of future interests...

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The manufacturers’ deduction, also called the “Section 199” or “domestic production activities deduction,” is 9% of the lesser of qualified production activities income or taxable income. The deduction is also limited to 50% of W-2 wages paid by the taxpayer that are allocable to domestic production gross receipts. Yes, the deduction is available to traditional...

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The deadline for 2012 IRA contributions is April 15, 2013. The limit for total contributions to all IRAs generally is $5,000 ($6,000 if you were age 50 or older on Dec. 31, 2012). Any unused limit can’t be carried forward to make larger contributions in future years. So if you haven’t already maxed out your...

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A tax-exempt organization is not taxed on income derived for its tax exempt purpose; however, income from activities unrelated to the tax-exempt purpose may be subject to unrelated business income tax. The IRS describes unrelated business income (UBIT) as income that is derived from a trade or business that is regularly carried on by the...

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W2 Reporting Notice: Cost of Employer-Sponsored Group Health Plan Coverage The Affordable Care Act requires employers to report the cost of coverage under an employer-sponsored group health plan on an employee’s Form W-2, Wage and Tax Statement, in Box 12, using Code DD. Many employers are eligible for transition relief for tax-year 2012. Specifically employers...

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Miller Kaplan Arase LLP partner Gregory Klein recently co-hosted an informative webinar on 401(k) issues and pitfalls. Below is the PDF of the presentation. PDF of Presentation

The IRS has simplified the requirement to identify contributing employers on Form 990 (Schedule R) for Multiemployer Health and Welfare Plans. For 2012, only the names of contributing employers are required to be disclosed. The employer’s federal tax ID, primary activity, legal domicile, type of entity, etc., are no longer required.

The American Taxpayer Relief Act was signed into law on January 2, 2013. We have compiled an overview of this new law, to assist you as are accumulating information for your 2012 tax returns. Key Provisions of the American Taxpayer Relief Act Provisions Affecting Individuals • Individual Income Tax Rates • Limitation on Itemized Deductions...

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Payroll tax will increase, as passed by Congress New Year's Day. 99% of Americans will be protected from a tax increase, but most will still pay more federal taxes in 2013. Social Security is financed by a 12.4% tax on wages up to $113,700, with employers paying half and workers paying the other half. President...

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As a result of the passage of Proposition 30, California Personal Income Tax Rates for various taxpayers will be increased retroactively to January 1, 2012. These increases will be effective through 2018. Previously, the maximum Personal Income Tax Rate in California was 9.3%. Taxable Income of Single Filers $0 to $250,000 9.3% max. rate $250,001-300,000...

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Before conducting a raffle, exempt organizations must register with the California Attorney General. Register by submitting Form NRP-1 by September 1st each year (but at least 60 days before the raffle date) for raffles to be held September 1st through August 31st. In addition, organizations registered to conudct raffles must submit NRP-2 by October 1st...

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Legislation kown as Moving Ahead for Progress int he 21st Century Act ("MAP-21") recently became law. Effective for 2013 plan years, MAP-21 changes PBGC premium rates. Flat-rate premiums for multiemployer plans will increase from $9 per participant to $12, with inflationary adjustments thereafter.

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