IRAs: Build a tax-favored retirement nest egg
Traditional and Roth IRAs can help you save for retirement on a tax-favored basis. Contributions to a traditional IRA reduce your current tax bill if you’re eligible, and earnings are tax deferred. However, withdrawals are taxed in full (plus a 10% penalty if taken before age 59½, unless an exception applies). Roth IRA contributions aren’t deductible. But earnings are tax deferred and withdrawals are tax-free if certain conditions are met. Contact the CPA's and business tax advisors at SEK for your tax questions and for more tax tips.
Ready, set, value!
If you’ve never worked with a business valuation professional, you might not know where to start. Although valuators use a variety of analytical techniques and possess different qualifications, they generally adhere to the same process of engagement, preparing and presenting reports. Contact the CPA's and business advisors to answer your questions.
Should your business offer the new emergency savings accounts to employees?
As part of the SECURE 2.0 law, there’s a new benefit option for employees facing emergencies. It’s called a pension-linked emergency savings account (PLESA) and it became effective for plan years beginning Jan. 1, 2024. Employers with 401(k), 403(b) and 457(b) plans can opt to offer PLESAs to non-highly compensated employees. Contact the CPA's and business tax advisors at SEK for more information and to answer your tax questions.
Maryland bFile and Maryland Tax Connect
Per communication on January 19, 2024, from the Comptroller of Maryland's office in regards to bFile and Maryland Tax Connect: January 18, 2024 - Last day to submit new Admissions and Amusement returns or make payments using the bFile system.
Nonprofits: Why uncertainty calls for a more flexible budget
When times are turbulent, your not-for-profit’s budget could end up falling short. Even if you’ve already made a fixed budget for 2024, consider taking a different approach in the future. Identify variable costs and revenues and the effect trigger events might have on them. Then reforecast items likely to differ substantially from your original estimates. Contact the CPA's and business advisors at SEK to answer your tax questions and for more tax tips.
A power of attorney is a critical component of an effective estate plan
While much of your estate plan focuses on actions that take place after death, it’s equally important to have a plan for making critical financial or medical decisions if you’re unable to make them for yourself during your lifetime. This is why including a power of attorney in your estate plan is a must. Contact the CPA's and business advisors at SEK for additional details.
Tax-favored Qualified Small Business Corporation status could help you thrive
Operating your small business as a Qualified Small Business Corporation (QSBC) could be a tax-wise idea. QSBCs are the same as garden-variety C corporations for tax and legal purposes, except QSBC shareholders are potentially eligible to exclude from federal income tax 100% of their stock sale gains. That translates into a 0% federal income tax rate on QSBC stock sale profits! However, you must meet several requirements set forth in the Internal Revenue Code, and not all shares meet the tax-law description of QSBC stock. Consult with the CPA's and business tax advisors at SEK if you’re interested in operating your business as a QSBC or for more tax questions and tax tips.
Comparing inter vivos and testamentary trusts
Trusts are used to accommodate asset transfers beyond dispositions in a will. There are two main types: the inter vivos trust and the testamentary trust. An inter vivos trust, sometimes called a “living trust,” is created during your lifetime. A testamentary trust, on the other hand, is created when the grantor passes away. It doesn’t officially become effective until the grantor’s death, and at that time it becomes irrevocable. The choice between an inter vivos or testamentary trust often depends on your estate planning objectives, including tax implications and whether you want to avoid probate or maintain control over assets. Contact the CPA's and business advisors at SEK to answer your tax questions and for more tax tips.
Understanding reporting obligations under the Affordable Care Act (ACA)
The Affordable Care Act (ACA), also known as Obamacare, has been a landmark legislation impacting healthcare in the United States. Understanding and fulfilling reporting obligations under the ACA is crucial for employers to avoid penalties and ensure compliance.
The kiddie tax could affect your children until they’re young adults
The “kiddie tax” can cause some of a child’s unearned income to be taxed at the parent’s higher marginal federal income tax rates instead of at the usually much lower rates that a child would otherwise pay. For purposes of this federal income tax provision, a “child” can be up to 23 years old. The kiddie tax is only assessed on a child’s or young adult’s unearned income. Earned income from a job or self-employment is never subject to the kiddie tax. Other rules apply. Contact the CPA's and business tax advisors if you want more information or for more tax tips.