The CBD Blog

Find peer advice, partner insights, and industry updates – all here in the CBD blog, ‘At The Helm’! With contributions from our entire team, we blog about the things that interest you.

How to Save Tax with an Installment Sale

Installment sales are often used to help complete a deal between a buyer and seller of real property. As an added bonus, they also offer three tax advantages to the seller. Here are the tax rules for installment sales, details on how this deal structure can sometimes save taxes when one is selling real estate, and reasons why installment sale treatment might not be the best option for every transaction.

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Coming Soon: Deadline to Reverse 2016 Roth Conversions

Hindsight is 20/20. If you converted a traditional IRA to a Roth IRA in 2016 but now regret your decision because the account’s value has decreased significantly, there’s still time to regroup. October 16, 2017, is the deadline for reversing any Roth IRA conversions made in 2016. Here’s why you might want to reverse a Roth conversion and how a reversal is executed.

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Federal Contractors Get a Minimum Wage Increase in 2018

The U.S. Department of Labor’s Wage and Hour Division (WHD) recently announced that the minimum wage rate for federal contractors will increase by 15 cents per hour, effective January 1, 2018. This article reveals the new minimum wage rate, and details what non-federal contractor employers in various states must pay staff members and tipped employees.

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Could Travel Per Diems Simplify Employee Expense Reimbursements?

Submitting expense reports can be tedious and time-consuming for employees who travel. While on the road, they must collect paper receipts and record the details of business meals. Fortunately, the IRS offers simplified methods for reimbursing employees’ travel costs that involve the use of travel per-diem and “high-low” rates based on location. Here’s an explanation of how these methods work, as well as a summary of the changes that go into effect starting on October 1, 2017.

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How to Maximize Tax Breaks for Work-Related Education Costs

Individuals who take work-related courses may be eligible for some lucrative federal income tax breaks. But the rules can be confusing. Here’s what employees and self-employed individuals need to know to make the most of work-related education tax breaks, including the American Opportunity and Lifetime Learning credits, employer-provided educational assistance plans and reimbursements, and miscellaneous itemized deductions for work-related education.

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Are You Ready for the New IRS Partnership Audit Rules?

A new partnership audit regime goes into effect for the 2018 tax year that assesses incremental taxes, penalties and interest at the partnership level. However, many partnerships can elect to follow alternative rules. Here’s guidance on what’s changing, including the importance of choosing a partnership representative to handle audit matters. We’ve also got good news for partnerships that missed the new tax filing deadline for the 2016 tax year.

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Report Warns Retirees about Potential Downsides of Reverse Mortgages

Some seniors decide to defer Social Security benefits and, instead, apply for a reverse mortgage to meet their cash flow needs. A recent CFPB report points out the risks and costs you should consider before using this strategy. If you don’t carefully weigh the pros and cons, you could jeopardize your retirement nest egg. Here are the mechanics of reverse mortgages and some potential pitfalls to bear in mind.

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Inadequate Records Lead to Unfavorable Results for Taxpayers

Unsubstantiated deductions may be disallowed if the IRS audits your tax return. Here are three recent U.S. Tax Court cases in which deductions for business expenses and charitable donations were disallowed for inadequate recordkeeping, resulting in additional tax assessments, along with penalties and interest on the unpaid taxes. We also provide guidance on how long you generally should retain records that support figures on your tax return.

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Why It's Risky to Rely on Unofficial IRS Guidance

Relying on FAQs and Answers, along with other forms of unofficial guidance posted on the IRS website, may not protect you from IRS audit or additional tax assessments, interest and penalties. Here’s an overview of the different types of guidance the IRS publishes, recommendations from the National Taxpayer Advocate on how to make guidance fairer, and a suggestion on how to minimize penalties on assessments of additional taxes.

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Learn the ABCs of Higher Education Tax Breaks

It’s back to school season. If you or a loved one will be attending college or graduate school this fall, it’s a good idea to review the federal tax breaks that are currently available for higher education costs. One of these breaks was extended only through 2016, although Congress may decide to extend it longer as part of its tax reform efforts. Here are the details, along with important information on applying for financial aid.

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Real Estate Investors: Let's Talk about Like-Kind Exchanges

Investors often swap one property for another. Why? The tax law allows for tax-free real property exchanges as long as the transaction involves like-kind property. Any taxable gains are completely or partially deferred until the replacement property is sold. Or, if the owner dies while still holding the replacement property, the taxable gain disappears. Interested? Here’s why you might want to complete your deal sooner rather than later.

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Business ID Theft: Is Your Data at Risk?

Cyberattacks against individual taxpayers are down, thanks to security measures set forth by federal and state tax agencies. But thefts of business data are rising, and the costs of these breaches can be significant. Here’s more on this trend, along with simple, but effective, ways businesses can help minimize the risk of tax-related identity theft.

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U.S. Treasury to Retire the myRA Program

It’s only a few years old, but the “my Retirement Account” (myRA) program, is going away. These accounts were intended to encourage taxpayers to start saving for retirement, but too few people took advantage of the program to justify the taxpayer cost. As part of a plan by the Trump administration to assess and eliminate ineffective programs, myRAs will soon be phased out. Here’s information for accountholders about the future of myRAs.

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Casualty and Theft Losses: Find the Silver Lining in Dark Clouds

Hurricanes, mudslides, wildfires, ice storms the list of possible natural disasters is extensive. Nowhere in the United States is safe from Mother Nature. But Uncle Sam offers a concession to individual taxpayers: Losses due to such casualties, as well as thefts and vandalism, may be deductible. Some exceptions and limits apply. Here are the basics, along with an overview of the tax rules for deducting casualty and theft losses for business owners.

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Revenue Recognition for Contracts: Changes Coming Soon

Revenue is the top line of your company’s income statement. It helps management, investors and lenders assess your company’s growth prospects, financial strength and strategic direction. The accounting rules for recognizing contract revenue will be changing for annual reporting periods starting in 2018 for public companies and 2019 for private companies. These sweeping changes will affect the timing of revenue recognition and the details you must disclose.

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Understand Your Social Security Retirement Benefits

Are you or a loved one nearing retirement age? Many seniors are uncertain about their federal retirement benefits, including when benefits start, how to apply, who qualifies for survivors benefits and whether benefits will be subject to income tax. Here are the basics, along with the highlights from a recent report on the Social Security system.

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5 Recent Supreme Court Decisions that Could Affect Your Business

The U.S. Supreme Court just wrapped up its 2016 term. This spring, the top court published several opinions that will affect businesses, including cases that provide an ERISA exemption for church plans and clarify federal guidance on patents, copyrights, bankruptcy priority, and the statute of limitation for disgorgements from the Securities and Exchange Commission. In the 2017 term, a case regarding online sales and use tax charges could take center stage.

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