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What Is Kiddie Tax And How To Avoid It?

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When it comes to taxes, children are typically in lower income tax brackets in the USA. That is why many wealthy parents would shift income-producing assets to their children’s names to avoid paying taxes at their top marginal tax rates, up to 37%.  But the Tax Reform Act of 1986 changed it all. The new act requires a child’s unearned income above a specific threshold to be taxed at the parent’s tax rates. As a result, ‘Kiddie Tax’ was born. Despite its sweet-sounding moniker, the “kiddie tax” is an often-misunderstood tax provision that can result in sizable income tax liability for your family. So, it is important to understand what kiddie tax is and how to avoid it from tax services San Bernardino . If your child has an unearned income, it is a tax you should be aware of. What is Kiddie Tax? Kiddie Tax was introduced to deter wealthy parents from pushing certain incomes into their children’s lower tax rates. This tax provision has seen many revisions. As of 2023 kiddie tax rules, a
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The Essential Countdown To Tax Deadline: Navigating 1099s And Beyond With Expert Guidance

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2024 TAX DEADLINE Are you feeling overwhelmed because tax season is here, with a tax deadline looming, is it twisting your brain? Listen, you’re not in this alone. At G&S Accountancy, we’re the pros who make tax season stress-free. Think of us as your tax season ninjas, tackling everything from the complexities of 1099 forms to strategizing for the best tax benefits. We’re all about turning the tax maze, including that tax deadline, into a walk in the park. Here’s the cool part: With G&S Accountancy, you step into tax season with confidence with our tax services Rancho Cucamonga CA . Why? Because we handle every detail with precision and care. It’s not just about filing taxes; it’s about enhancing your financial well-being. Personalized, expert guidance that simplifies your tax process? That’s what we do. Join us, and experience a tax season that’s not just bearable, but actually smooth and well-managed. Understanding the Basics of Tax Season Tax season – a puzzle, right? All t
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Irc Section 179 Expensing: Maximizing Your Tax Deductions

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Business assets such as a computer, machinery, vehicles, or other equipment that wear out over time. Businesses are allowed to write off a part of the asset’s loss in value when planning their taxes throughout its life, thus reducing their taxable income by that amount. In 2002, the federal Job Creation and Worker Assistance Act allowed businesses of 30% depreciation on certain new property. As of September 2017, lawmakers revised bonus depreciation to 100% for new and used property. And starting in 2023, bonus depreciation will decline by 20% each year, becoming ‘zero’ in 2027. IRC Section 179 Expensing is an equally beneficial alternative to bonus depreciation. Let’s discuss how: What is IRC Section 179 Expensing? As per IRC (Internal Revenue Code) Section 179, eligible businesses can immediately deduct the cost of qualifying purchases such as equipment or machinery. This allows companies to get an immediate break from their tax burden. This rule is beneficial particularly for small
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Evaluating Investments

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In today’s dynamic financial landscape, the realm of business and investment stands as a beacon of potential. For many individuals, whether seasoned professionals or budding enthusiasts, this world represents a fusion of challenges and rewards. It’s a vast arena where strategic moves, backed by knowledge and foresight, can lead to significant financial gains, shaping one’s future and financial stability. But to truly excel and make the most of these opportunities, you must be well-armed with the right information. It’s not just about having capital to invest; it’s about understanding where, when, and how to invest it. Grasping fundamental financial concepts is the cornerstone of this understanding, ensuring that every decision made is not just informed but also strategic and forward-thinking. Understanding the Basics of Investment Evaluation a. Why It Matters: Every investment decision, from buying shares in a promising startup to investing in real estate or even diversifying a stock p
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Why Small Businesses Are Choosing Health Savings Accounts (Hsa)?

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When you put away money as your retirement savings, you must pay taxes on the saved amount. Fortunately, traditional retirement plans like 401(k)s and individual retirement accounts give you an upfront tax break. But these plans require you to pay taxes when you withdraw the money. Enter health savings accounts (HSA). An HSA account is a tax-deductible contribution with tax-free growth and tax-free withdrawals on certain medical expenses in retirement. The same principle applies to small business employees as well. Because of the benefits of HSA for employers and employees, HSAs are booming. According to some of the latest HSA stats, there were 35 million HSA accounts holding nearly $104 billion in assets at the end of 2022. It is projected that this figure will reach 43 million accounts with $150 billion in assets by 2025. Health Savings Account (HSA) – The Basics According to Healthcare.gov, “HSA is a type of savings account that lets you set aside money on a pre-tax basis to pay for
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California EV Tax Credit: Accelerating Clean Energy Transition

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As the world shifts towards a more sustainable future, California has emerged as a leading proponent of electric vehicles (EVs). With its commitment to reducing greenhouse gas emissions and promoting clean transportation, the state has implemented various initiatives to encourage the adoption of EVs. One such initiative is the California EV tax credit, a financial incentive designed to make EV ownership more accessible and affordable. This article delves into the California EV tax credit details, exploring its benefits by certified accountants , eligibility criteria, the application process, and its impact on the state’s clean energy transition. Understanding the California EV Tax Credit The California EV tax credit, also known as the Clean Vehicle Rebate Project, is a financial incentive introduced by the state to promote the adoption of electric vehicles (EVs) and fuel cell electric vehicles (FCEVs). California, known for its commitment to sustainability and its effor
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Qualified Opportunity Fund Investment: All You Need To Know

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A Qualified Opportunity Fund (QOF) is an investment vehicle created as part of the Opportunity Zone program, which was established by the U.S. government in 2017. The qualified opportunity zone program aims to promote economic development and job creation in designated low-income communities, known as Opportunity Zones. In addition, the Qualified Opportunity Fund Investment is made into eligible businesses and properties located within these Opportunity Zones. It allows investors to receive certain tax benefits by investing capital gains into the fund. The goal of the Qualified Opportunity Fund is to gain tax incentives on long-term investments in economically distressed areas, fostering job creation and spur economic development. Moreover, it’s worth noting that this program looks similar to 1031 Exchanges. So, read our post on the differences between 1031 Exchanges and the Qualified Opportunity Fund Investment program. You can also consult local CPA for small business
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