Make Direct Payments of Tuition and Medical Payments

With the lifetime gift and estate tax exemption at $11.40 million for 2019 ($11.58 million for 2020), you may think you don’t have to worry about gift and estate taxes.  However, there are no guarantees that estate tax law won’t be revised in the future or that your accumulated assets won’t eventually exceed the available exemption (which is scheduled to drop significantly in 2026). Thus, there’s a need to investigate other tax-saving possibilities. Beyond annual exclusion gifts Under the annual gift tax exclusion, you can reduce your taxable estate without using up any of your lifetime exemption by giving each recipient gifts valued up to $15,000 a year. For example, if you have three children and seven grandchildren, you can give each one $15,000 tax free, for a...

5 Business Service Scams to Watch Out For

Preventing fraud from costing your company can sometimes seem like a game of whack-a-mole: Squash one scheme and another one pops up. Business service scams are particularly abundant. Fraud perpetrators know that business owners don’t always have time to verify the identities of salespeople or service reps and the legitimacy of their claims.  Your best defense is to refuse to pay anyone anything until you’ve ascertained the facts. It also helps to know what schemes are popular with criminals. Here are 5 business service scams to watch out for. (1) Utility Bill Fraudsters Someone claiming to be from your gas, electric or water company may call and say services are about to be cut off for non-payment. However, you can stop the discontinuation if you immediately pay the...

When Limited Partners Suspect General Partners of Fraud

Fraud suspicions are hard enough to investigate if you’re a business owner and call the shots. But what if you’re a limited partner (LP) in a business where a general partner (GP) is possibly engaged in mismanagement, self-dealing or fraud? With little control over the company, limited partners that suspect general partners of fraud face several challenges. The problem In a limited partnership, one or more general partners (GPs) manage the business while limited partners (LPs) contribute capital and share in the profits. LPs don’t run or manage the business. In fact, in most states, if they become involved in management decisions they can lose their LP status. Other states allow minor exceptions to this rule by, for example, allowing an LP to vote on issues that...

How to Choose a Guardian for Your Child

If you have minor children, arguably the most important estate planning decision you need to make is choosing a guardian for them should the unthinkable occur. If you haven’t yet made this decision, formalize your choice as soon as possible.  When it comes to choosing the best candidate for a guardian for your child, you probably already have a short list consisting of members of your immediate family. This is an excellent start, but don’t forget about extended family members and trusted friends. Things to consider when choosing a guardian for your child There are many issues you’ll need to consider in making your decision. Perhaps the most important issue is whether you and your guardian choice share similar values, such as parenting philosophy, religious and moral beliefs,...

Flexibility is Key in an Unpredictable Estate Planning Environment

The Tax Cuts and Jobs Act (TCJA) made only one change to the federal gift and estate tax regime, but it was a big one. It more than doubled the combined gift and estate tax exemption, as well as the generation-skipping transfer (GST) tax exemption. This change is only temporary, however. Unless Congress takes further action, the exemptions will return to their inflation-adjusted 2017 levels starting in 2026.  What does this mean for your estate plan? If your estate is well within the 2019 exemption amount of $11.40 million ($11.58 million for 2020), the higher exemption won’t have a big impact on your estate planning strategies. But if your estate is in the $6 million to $11 million range, it’s important to build some flexibility into...

Tax Implications of Environmental Cleanup

If your company faces the need to “remediate” or clean up environmental contamination, the money you spend can be deductible on your tax return as ordinary and necessary business expenses. There are however "timing difference" types of tax implications of environmental cleanup. You want to claim the maximum immediate income tax benefits possible for the expenses you incur but that may not always be possible. These expenses may include the actual cleanup costs, as well as expenses for environmental studies, surveys and investigations, fees for consulting and environmental engineering, legal and professional fees, environmental “audit” and monitoring costs, and other expenses. Current deductions vs. capitalized costs Unfortunately, every type of environmental cleanup expense cannot be currently deducted. Some cleanup costs must be capitalized. But, generally, cleanup costs are...