deduction

Getting a New Car for Business? Buy or Lease? Part 2: Tax Consequences

This blog will address the tax consequences of both leased and owned vehicles used for business purposes. Hopefully, it will offer some insight into the decision as to what is best for your business: buying or leasing?

With both owned and leased cars, any related expenses may be deducted using the standard mileage rate or the total amount of actual expenses. If the vehicle is owned, you may choose the standard mileage rate in the first year and switch to the actual expense method in a later tax year. If a vehicle is leased, you may also choose the standard mileage rate in the first year but once you the standard mileage rate is chosen, it must be used for the life of the lease.

Most Confusing Parts Of The Income Tax Code, Part 2: Alternative Minimum Tax

Many provisions of the Internal Revenue Code are complicated. Proper interpretation of the rules and regulations contained in these provisions requires the assistance of an experienced and knowledgeable tax professional. The second part of our series about the most confusing provisions of the Internal Revenue Code addresses everyone’s favorite, the alternative minimum tax.

Why Is It Confusing?

  • The AMT doesn’t seem to achieve its purpose
  • Taxpayers have to compute two taxes
  • The computation of the AMT itself is enormously long and complicated

Tax Treatment Of Lease Terms Part 2: Tenant Allowances

Tenant construction allowances are a common detail in commercial real estate leases. Because landlords need tenants to fill their commercial spaces, and tenants need to customize these spaces for their business, a tenant allowance is a vital lease term which significantly pushes forward and finalizes a commercial real estate leasing transaction. An allowance must be structured accordingly to avoid undesired tax consequences.

I.R.C. § 110 provides landlords and tenants with a safe harbor which ensures that a tenant is not required to recognize income for a tenant allowance in leases which are for 15 years or less of a retail space. Otherwise, the tenant treats a tenant allowance received from the landlord as ordinary income, while depreciating assets over their useful life, typically resulting in much more income than expenses.

What Is Foreign Earned Income? Am I Eligible to Claim Either the Exclusion Or Deduction?

Individuals that are U.S. citizens or resident aliens of the United States living abroad are taxed on their income by more than one governmental entity. However, these taxpayers may qualify to exclude from their income an amount of their foreign earnings (adjusted annually for inflation) under I.R.C. § 911. They may also be eligible for either a foreign housing exclusion or the foreign housing deduction (this will be discussed in a future blog). To determine eligibility to claim either the foreign earned income exclusion, the foreign earned housing deduction or foreign earned housing exclusion, please consider the following analysis. Remember, that an experienced tax professional can offer assistance in making this analysis.

A Discussion Of New York State Income Tax Credits

Individuals and businesses in the State of New York are both subject to income tax. New York enacted a sweeping tax-reduction bill in 2011, creating the lowest mid-bracket tax rates in the state in 58 years. These tax breaks affected over four million taxpayers. Despite this legislation and other New York tax breaks, New York still has one of the highest state income tax rates in the nation.

New York Personal Income Tax

A Discussion Of New York State Income Tax Deductions

Income tax deductions are expenses that may be deducted from pre-tax gross income. Of course, deductions reduce New York income tax and maximize a refund. One of the experienced tax professionals at the Thorgood Law Firm can assist any New Yorker in determining the deductions for which they qualify under New York law.

New York has a standard state income tax deduction. For 2015, they are as follows:

Filing Status Amount  of Standard Deduction
Single (and can be claimed as a dependent on another taxpayer’s federal return) $3,100

The Most Overlooked Tax Deductions, Part 5

Many taxpayers overlook the long list of deductions that they may take when completing and filing their tax returns. The tax professionals at the Thorgood Law Firm can help ensure that all taxpayers take advantage of any and all deductions that may apply to them.  Here is the fifth part of our multi-part blog on the most overlooked tax deductions:

LEGAL INCOME & FEES AS DEDUCTIONS

Jury pay paid to employer

The Most Overlooked Tax Deductions, Part 4

The Most Overlooked Tax Deductions, Part 4Many taxpayers overlook the long list of deductions that they may take when completing and filing their tax returns. The IRS has estimated that millions of taxpayers overpay their taxes each year mainly because they fail to avail themselves of all of the possible deductions. The tax professionals at the Thorgood Law Firm can help ensure that all taxpayers take advantage of any and all deductions that may apply to them. Here is the fourth part of our multi-part blog on the most overlooked tax deductions:

HEALTH, CHILD CARE, AND CHARITY DEDUCTIONS

The Most Overlooked Tax Deductions, Part 3

Many taxpayers overlook the long list of deductions that they may take when completing and filing their tax returns. The IRS has estimated that millions of taxpayers overpay their taxes each year mainly because they fail to avail themselves of all of the possible deductions. The tax professionals at the Thorgood Law Firm can help ensure that all taxpayers take advantage of any and all deductions that may apply to them. Here is the third part of our multi-part blog on the most overlooked tax deductions:

PAYMENT OF TAXES AS DEDUCTIONS

Estate tax on income in respect of a decedent

Tax Benefits For Education Part 4

This is the fourth part of our multi-part series of blogs on tax benefits for education. Any present or former student should utilize the knowledge, experience and expertise of the tax professionals at the Thorgood Law Firm to ensure that they take advantage all the credits and deductions that the law allows for students of higher education.

Tax credits, deductions and savings plans offer taxpayers ways to reduce their expenses for higher education.

  • A tax credit may reduce the amount of potential income tax.
  • A deduction reduces the amount of income that is subject to tax, thus reducing the amount of tax paid.

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