Home
Share |

Content about Income tax in the United States

April 23, 2013
Consolidating Defined Benefit Plans

CHICAGO — Is accumulating multiple IRAs and 401(k)s the best investment strategy?

CHICAGO — The more things change, the more they stay the same. So goes that old saying illustrating an important truth in many aspects of life, but not in retirement planning.

The world of retirement planning has undergone many drastic changes in recent years, most of which would appear to be here to stay. Perhaps the most significant of those is the gradual disappearance of the corporate defined benefit plan.

A generation ago, in the days of generous corporate retirement plans, spending an entire working career with one employer was a common experience; these days, not so much. Today, many if not most of us will have more than one employer during our working careers.

Some of those employers may provide one of the new retirement accounts such as 401(k)s and some may not. In those cases, we have the option of opening individual retirement accounts (IRAs) to help save money for our retirement years. As a result, over a working career, many people wind up with retirement dollars spread out in several different accounts.

February 20, 2013
Over the Fiscal Cliff for Tax Savings (Part 2)

ARDMORE, Pa. — Package renews more than 50 temporary tax breaks through 2013

ARDMORE, Pa. — The so-called “fiscal cliff” tax package recently signed into law renewed more than 50 temporary tax breaks through 2013, saving individuals and businesses an estimated $76 billion. For the owners and operators of small- and medium-sized dry cleaning businesses, there is good news and bad news contained in the fiscal cliff tax laws.

First, the good news: greater certainty in taxes. The owners and operators of dry cleaning businesses have grown used to many longstanding tax breaks but they also have had to get used to the uncertainty of whether they will be renewed each year.

On the downside, in addition to a 3.8% Net Investment Income (NII) tax and a 0.9% Additional Medicare tax that, thanks to the Health Care and Education Reconciliation Act of 2010, began in 2013, many dry cleaners and laundry owners discovered they are subject to new taxes. Single individuals with incomes above the $400,000 level and married couples with income higher than $450,000 will pay more in taxes in 2013.

February 19, 2013
Over the Fiscal Cliff for Tax Savings (Part 1)

ARDMORE, Pa. — Package renews more than 50 temporary tax breaks through 2013

ARDMORE, Pa. — The so-called “fiscal cliff” tax package recently signed into law renewed more than 50 temporary tax breaks through 2013, saving individuals and businesses an estimated $76 billion. For the owners and operators of small- and medium-sized dry cleaning businesses, there is good news and bad news contained in the fiscal cliff tax laws.

First, the good news: greater certainty in taxes. The owners and operators of dry cleaning businesses have grown used to many longstanding tax breaks but they also have had to get used to the uncertainty of whether they will be renewed each year.

On the downside, in addition to a 3.8% Net Investment Income (NII) tax and a 0.9% Additional Medicare tax that, thanks to the Health Care and Education Reconciliation Act of 2010, began in 2013, many dry cleaners and laundry owners discovered they are subject to new taxes. Single individuals with incomes above the $400,000 level and married couples with income higher than $450,000 will pay more in taxes in 2013.

October 10, 2012
Succession Planning: When It’s Time to Pass the Baton (Part 2)

ARDMORE, Pa. — Owners, shareholders and partners must decide what will happen to business when no longer in their control

ARDMORE, Pa. — Sooner or later, every dry cleaner thinks about retirement. For those who own a closely held or family business, retirement is more than just a matter of deciding not to go to work anymore. In addition to ensuring there will be enough money to retire, dry cleaning business owners, shareholders and partners must decide what will happen to the business when they are no longer in control.

An effectively developed succession plan can involve selling the business to provide a retirement nest egg, or continuation of the dry cleaning business, with gradual changes in management and/or control, to ensure a source of retirement income or any combination thereof.

One of the more important aspects of business succession planning is working out the financial pitfalls following the death of the business owner. That requires answering questions such as where the money to pay taxes will come from, or, if the business is a partnership, where the money to buy out the deceased partner’s share will come from.

September 4, 2012
Save Now and Minimize the Tax Bite

CHICAGO — If you haven’t yet set up your own retirement savings plan, you can’t afford to delay

CHICAGO — Whether you’re just getting started in your dry cleaning business or you’ve been around for years, you can’t afford to let your hard-earned dollars get eaten up at tax time. It’s tough enough to earn a decent income these days, and it can be even harder to keep what you earn. That’s why it’s so important to take advantage of every legitimate way to minimize the tax bite on your earned income.

Worrying about your retirement today when the business demands on you are so high may not be at the top of your priority list, but it’s important to understand that retirement savings plans have the double benefit of reducing today’s tax load, thus effectively increasing today’s income, while helping to build that all-important retirement nest egg.

December 7, 2011
Last-Minute Tips to Lower Your 2011 Income Tax Bill (Part 2 of 2)

CHICAGO — The filing deadline for 2011 federal income taxes is not far off, but you still have time to make sure you’ve done everything you can to keep Uncle Sam’s paws off as much of your money as possible. Here are some last-minute ways to do that by reducing your 2011 income tax bill:

Often-Overlooked Deductions

Many easily overlooked miscellaneous expenses are deductible as long as they add up to at least 2% of your adjusted gross income. Grouping them can help you meet the threshold. Here are some miscellaneous items you may have overlooked:

December 5, 2011
Last-Minute Tips to Lower Your 2011 Income Tax Bill (Part 1 of 2)

CHICAGO — The filing deadline for 2011 federal income taxes is not far off, but you still have time to make sure you’ve done everything you can to keep Uncle Sam’s paws off as much of your money as possible. Here are some last-minute ways to do that by reducing your 2011 income tax bill:

Save More for Retirement

One of the most important tax-savings steps you can take is contributing the maximum to your 401(k) or other tax-deferred retirement plan. If you haven’t done so, max out your retirement savings now by bringing your contribution up to the legal limit. For 2011, you may put as much as $16,500 into a 401(k), 403(b) or 457 plan. If you’re over age 50, you may add an additional $5,500.

Every dollar you contribute means you will pay less income tax. Except for Roth IRAs, all contributions to tax-deferred retirement plans are tax-deductible in the tax year for which you make your contribution.

If you can’t come up with the maximum, bump up your contribution as much as you possibly can. It may seem painful now, but you’ll benefit greatly in the future.

July 20, 2011
A Real-Life Horror Story (Part 2 of 2)

CHICAGO — By any definition, Joe was a “success,” and so was his business, Success Co. Although Joe was a planner, after he died, his estate plan and business succession plan turned into an economic and tax tragedy—for son Sam, wife Mary and the rest of the family.

March 10, 2010
Payroll Penalties

With local, state and federal governments suffering the effects of the economic downturn, it should come as no surprise to anyone in the industry that tax laws will be subject to stricter enforcement to shore up plummeting revenues. What might come as a surprise is just how far the tax collector’s reach can extend, however.

November 28, 2008
The Bailout’s Breaks: Wall Street Rescue Provides Tax Credits, Deductions (Part 2 of 2)

The Emergency Economic Stabilization Act of 2008 (EESA) is designed to solve the credit crunch in the financial markets, but it’s also one of the biggest tax bills in recent years.

Many drycleaners will be affected by the rescue bill, thanks to almost 300 changes to the tax laws — including tax breaks expected to save taxpayers a whopping $150 billion.

CONTRIBUTIONS AND S-CORP CHARITABLE DEDUCTIONS

November 19, 2008
Prepare for Tax Time Early

Most drycleaners take their paperwork to their accountant just before the April 15th deadline and hope for the best. But by being proactive, you can fine-tune the outcome, anticipate cashflow needs, reduce the chance of penalties and lower accountant fees.

April 18, 2007
Maine Eyes Service Sales Tax

AUGUSTA, Maine — Maine is examining multiple proposals for tax reform that would extend the state sales tax to personal services such as drycleaning.

Legislators’ goal is to reduce state income taxes — currently a graduated system charging 2% to 8.5% on personal earnings — as well as offer property tax relief and tax rebates for low-income owners and renters.