QTA Tax, Ltd.

Tax Planning in Naperville How Adhering To Sales TAx Regulations Can Help Expand Your Naperville Law Practice

https://qtatax.com/blog/tax-planning-in-naperville-how-adhering-to-sales-tax-regulations-can-help-expand-your-naperville-law-practice/

Navigating Intellectual Property Tax: Essentials for Your Business

https://qtatax.com/blog/navigating-intellectual-property-tax-essentials-for-your-business/

Tax Angles to Stock Dividends

Question: Do I owe tax on dividends that I don’t withdraw from my brokerage account? T.P., Oak Park, IL

Answer: Yes. Qualified dividends from a taxable brokerage account are taxed at capital gain rates whether they are paid out or reinvested. This includes dividends from domestic corporations and certain foreign corporations if you meet a holding period requirement. The maximum capital gains rate is 20%, but most taxpayers will pay 15%. The qualified dividend amount is reported on the Form 1099 you receive for the year.

Tip: Similarly, capital gains are recognized on sales of appreciated shares even if the proceeds are reinvested. Short-term gains are taxed at ordinary higher income rates. This information is also reported on Form 1099.

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Place biz assets in service
Question: We bought equipment last year that we haven’t used yet. Can we deduct the cost on our 2023 return? M.T.S., Champagne, IL
Answer: It depends. The Section 179 deduction is available within generous limits for equipment “placed in service” during the year. To qualify for the deduction, the equipment must be available for a specific use in the business. Generally, that means that it must be assembled or installed and ready to be used. In other words, you can’t deduct the cost in 2023 if the equipment is still in a box in the warehouse, but it doesn’t necessarily need to be already operating. Equipment needs to be either actively up and running or ready and waiting on a standby basis to be considered placed in service.
Tip: The maximum Section 179 deduction for tax years beginning in 2023 is $1.16 million.

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Anticipated Refund Dates!

QnA with QTA
Records of cash donations
Q: Can I deduct small gifts of cash that I give to charity without any receipts? M.A. Naperville, IL
A: Technically, no. If you give a donation of $250 or more to a qualified charitable organization, you must obtain a written contemporaneous acknowledgment from the charity to qualify for the deduction. The acknowledgment should include the amount of the contribution, whether you received any goods or services in return for the contribution and their value, if any. For gifts under $250, you still must be able to prove your donation via bank records or credit card receipts.
Tip: Nevertheless, if you deduct cash you toss into a kettle around the holidays, it’s not likely to be challenged by the IRS.

Preserving the Maximum Federal Income Tax Exclusion on Home Sale Gains After Divorce

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Be positive about capital loss Alert: A new decision shows how to apply the capital loss rules. In short, you can’t claim the loss as a negative number. (Powell, TC Summary Opinion 2022-19, 9/26/22) This still leaves room for investors to offset taxable income in subsequent years.

QTA Tax wishes you a very Merry Christmas and a Happy New Year!✨

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