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April 15th Offers an Important Tax Planning Opportunity for Partners

By:  Amanda Wilson

April 15th is usually greeted with dread as tax day.  However, April 15th also offers an important tax planning opportunity for partners in partnerships (including limited liability companies that are treated as partnerships for federal income tax purposes).  The tax rules allow partners to amend their partnership agreement retroactively to January 1 of the prior year if the amendment is in place by April 15th.  If your business has a partnership, this might be a great opportunity for you.  You should take a moment to look at how your partnership is allocating taxable income and losses to the partners in 2013 and make changes if a different allocation would work better for your partnership.  Act fast, though, because unlike the due date for filing your return, this deadline cannot be extended. read more

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Time To Think About Your Form 990 – What does is say about your charitable organization?

It’s almost that time of year, again…time to start thinking about your non-profit’s Form 990 filing for the 2013 tax period. These information returns are due the 15th day of the 5th month after the end of an organization’s accounting period. For calendar year organizations, that date is May 15, 2014. You can obtain an automatic 3 month extension by submitting Form 8868. You can subsequently use the same form to apply for an additional 3 month extension if needed. read more

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2014 Brings Increase in Federal Estate and Gift Tax Exemption

On January 1, 2014, the federal estate tax exemption (and lifetime gift tax exemption) increased to $5,340,000 per person.  This represents a $90,000 increase from $5,250,000 in 2013.  Keep in mind the federal estate and gift tax exemption is “unified”.  Use of federal gift tax exemption during your lifetime will reduce the amount of federal estate tax exemption remaining at your death.  For example, if you give away $2,000,000 in taxable gifts during your lifetime you would likely owe no federal gift tax because you would use a portion of your lifetime federal gift tax exemption ($5,340,000 in 2004) to avoid paying federal gift tax.   If you die in December 2014, however, your federal estate tax exemption amount will be reduced by the amount of lifetime federal gift tax exemption you used during your life.  In our example,  you have already used $2,000,000 of your exemption so you would have $3,340,000 of your federal estate tax exemption remaining to use to pass your estate to your beneficiaries free from federal estate tax. read more