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If you are a Client of mine, please call our Testimonial Hotline & give us your feedback  and what you like about our firm at:

 

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Thank you!

Philip Schreiber, CPA

Schreiber Advisors, PC.

 


 

 

 

Other Articles

Click on this Link to Access These & Other Past Articles



- Walk The Path To Tax Savings For 2015

 

- 5 Things To Know About Substantiating Donations

 

- Married Filers, The Choice Is Yours

- Reacquainting Yourself With The Roth IRA

- How You Can Help Prevent Tax-Related Identity Theft

 

- Consolidate Accounts And Simplify Your Financial Life

 

- Time to Start Year-End Tax Planning

- Shared Equity Financing Arrangements For Home Ownership
 

- Planning To Avoid Or Minimize The 3.8% Net Investment Income Tax

- Supreme Court Legalizes same-gender Marriages In All States

- The Importance of Updating Beneficiary Designations

- Now is a Good Time to Start Planning and Organizing Your Taxes

- The Many Benefits of a Health Savings Account (HSA)

- Combined Business And Vacation Travel

- What You Should Do With An Identity Verification Letter From The Irs

- Donating A Life Insurance Policy To Charity

- Taxation Of College Financial Aid

 


 

 

Reminder: Tax Filing this year is April 18th but don't wait until the last minute to get your tax return information to us if you have not done so already!

   

Capital Gains and Losses: 10 Helpful Facts to Know + Walk The Path To Tax Savings For 2015 + 5 Things To Know About Substantiating Donations


 

When you sell a capital asset, the sale normally results in a capital gain or loss.

 

A capital asset includes most property you own for personal use or own as an investment. Here are 10 facts that you should know about capital gains and losses:

1. Capital Assets. Capital assets include property such as your home or car, as well as investment property, such as stocks and bonds.

2. Gains and Losses. A capital gain or loss is the difference between your basis and the amount you get when you sell an asset. Your basis is usually what you paid for the asset.

3. Net Investment Income Tax. You must include all capital gains in your income and you may be subject to the Net Investment Income Tax if your income is above certain amounts. The rate of this tax is 3.8 percent. For details, visit IRS.gov.

4. Deductible Losses. You can deduct capital losses on the sale of investment property. You cannot deduct losses on the sale of property that you hold for personal use.

5. Limit on Losses. If your capital losses are more than your capital gains, you can deduct the difference as a loss on your tax return. This loss is limited to $3,000 per year, or $1,500 if you are married and file a separate return.

6. Carryover Losses. If your total net capital loss is more than the limit you can deduct, you can carry it over to next year's tax return.

7. Long and Short Term. Capital gains and losses are treated as either long-term or short-term, depending on how long you held the property. If you held it for one year or less, the gain or loss is short-term.

8. Net Capital Gain. If your long-term gains are more than your long-term losses, the difference between the two is a net long-term capital gain. If your net long-term capital gain is more than your net short-term capital loss, you have a net capital gain.

9. Tax Rate. The tax rate on a net capital gain usually depends on your income. The maximum tax rate on a net capital gain is 20 percent. However, for most taxpayers a zero or 15 percent rate will apply. A 25 or 28 percent tax rate can also apply to certain types of net capital gain.

10. Forms to File. You often will need to file Form 8949, Sales and Other Dispositions of Capital Assets, with your federal tax return to report your gains and losses. You also need to file Schedule D, Capital Gains and Losses, with your tax return.

For more information about this topic, see the Schedule D instructions and Publication 550, Investment Income and Expenses. You can visit IRS.gov to view, download or print any tax product you need right away.
 



Walk The Path To Tax Savings For 2015

Like many taxpayers, you may have been expecting to encounter a few roadblocks while traversing your preferred tax-saving avenues.

If so, tax extenders legislation signed into law this past December may make your journey a little easier. Let's walk through a few highlights of the Protecting Americans from Tax Hikes Act of 2015 (the PATH Act).

Of interest to individuals

If you're a homeowner, the PATH Act allows you to treat qualified mortgage insurance premiums as interest for purposes of the mortgage interest deduction through 2016. However, this deduction is phased out for higher income taxpayers. The law likewise extends through 2016 the exclusion from gross income for mortgage loan forgiveness.

Those living in a state with low or no income taxes (or who make large purchases, such as a car or boat) will be pleased that the itemized deduction for state and local sales taxes, instead of state and local income taxes, is now permanent. Your deduction can be determined easily by using an IRS calculator and adding the tax you actually paid on certain major purchases.

Investors should note that the PATH Act makes permanent the exclusion of 100% of the gain on the sale of qualified small business stock acquired and held for more than five years (if acquired after September 27, 2010). The law also permanently extends the rule that eliminates qualified small business stock gain as a preference item for alternative minimum tax (AMT) purposes.

Breaks for businesses

The PATH Act gives business owners much to think about as well. First, there's the enhanced Section 179 expensing election. Now permanent (and indexed for inflation beginning in 2016) is the ability for companies to immediately deduct, rather than depreciate, up to $500,000 in qualified new or used assets. The deduction phases out, dollar for dollar, to the extent qualified asset purchases for the year exceeded $2 million.

The 50% bonus depreciation break is also back, albeit temporarily. It's generally available for new (not used) tangible assets with a recovery period of 20 years or less, and certain other assets. The 50% amount will drop to 40% for 2018 and 30% for 2019, however.

In addition, the PATH Act addresses two important tax credits. First, the research credit has been permanently extended, with some specialized provisions for smaller businesses and start-ups. Second, the Work Opportunity credit for employers that hire members of a "target group" has been extended through 2019.

Does your company provide transit benefits? If so, note that the law makes permanent equal limits for the amounts that can be excluded from an employee's wages for income and payroll tax purposes for parking fringe benefits and van-pooling / mass transit benefits.

Much, much more

Whether you're filing as an individual or on behalf of a business, the PATH Act could have a substantial effect on your 2015 tax return. We've covered only a few of its many provisions here. Please contact us to discuss these and other provisions that may affect your situation.

Sidebar: Good news for generous IRA owners

The recent tax extenders law makes permanent the provision allowing taxpayers age 70 1/2 or older to make direct contributions from their IRA to qualified charities up to $100,000 per tax year. The transfer can count toward the IRA owner's required minimum distribution. Many rules apply so, if you're interested, let us help with this charitable giving opportunity.
 


5 Things To Know About Substantiating Donations

There are virtually countless charitable organizations to which you might donate.

You may choose to give cash or to contribute noncash items such as books, sporting goods, or computers or other tech gear. In either case, once you do the good deed, you owe it to yourself to properly claim a tax deduction.

No matter what you donate, you'll need documentation. And precisely what you'll need depends on the type and value of your donation. Here are five things to know:

1. Cash contributions of less than $250 are the easiest to substantiate. A canceled check or credit card statement is sufficient. Alternatively, you can obtain a receipt from the recipient organization showing its name, as well as the date, place and amount of the contribution. Bear in mind that unsubstantiated contributions aren't deductible anymore. So you must have a receipt or bank record.

2. Noncash donations of less than $250 require a bit more. You'll need a receipt from the charity. Plus, you typically must estimate a reasonable value for the donated item(s). Organizations that regularly accept noncash donations typically will provide you a form for doing so. Keep in mind that, for donations of clothing and household items to be deductible, the items generally must be in at least good condition.

3. Bigger cash donations mean more paperwork. If you donate $250 or more in cash, a canceled check or credit card statement won't be sufficient. You'll need a contemporaneous written acknowledgment from the recipient organization that meets IRS guidelines.

Among other things, a contemporaneous written acknowledgment must be received on or before the earlier of the date you file your return for the year in which you made the donation or the due date (including an extension) for filing the return. In addition, it must include a disclosure of whether the charity provided anything in exchange. If it did, the organization must provide a description and good-faith estimate of the exchanged item or service. You can deduct only the difference between the amount donated and the value of the item or service.

4. Noncash donations valued at $250 or more and up to $5,000 require still more. You must get a contemporaneous written acknowledgment plus written evidence that supports the item's acquisition date, cost and fair market value. The written acknowledgment also must include a description of the item.

5. Noncash donations valued at more than $5,000 are the most complicated. Generally, both a contemporaneous written acknowledgment and a qualified appraisal are required unless the donation is publicly traded securities. In some cases additional requirements might apply, so be sure to contact us if you've made or are planning to make a substantial noncash donation. We can verify the documentation of any type of donation, but contributions of this size are particularly important to document properly.
 

Remember you can call our offices if you have any questions about these or any other accounting, tax, financial planning or insurance related issues, at 313-388-0300 or our other area offices listed below.

 

Regards, Philip Schreiber, CPA

Schreiber Advisors, PC

 

Philip Schreiber, CPA | Schreiber Advisors, PC | Certified Public Accountants
phil@cpatechs.com
Allen Park Office: 14801 Southfield Road | Allen Park, MI 48101
313-388-0300
| Fax 313-388-0303

Farmington Hills Office: 30201 Orchard Lake Rd., Ste 115 | Farmington Hills, MI 48334 | 248-702-0681 | Fax: 248-702-0684

Troy Office: 888 W. Big Beaver Rd., Suite 888 | Troy, MI 48084 | 248-689-7550 | Fax: 248-689-4376

Grosse Pointe Park Office: 787 Berkshire | Grosse Pointe Park, MI 48230
313-824-9095

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