Executive's Tax & Management Report articles from November 2002

Executive's Tax & Management Report archives from November 2002

Tax fact.
November 7, 2002... Only 6 percent of 126,000 estate tax returns and 1 percent of 100,000 gift tax returns filed annually are audited after being reviewed by the IRS. The higher the estate value, the greater the chance of an audit. Source: Tax Talk Today

Many S corp tax returns processed incorrectly.
November 7, 2002... If you elected S corporation status when establishing your business, you probably did so to enjoy the tax benefits available to small business owners: no corporate taxes and the ability to let shareholders report profits or losses on their...

Change to pension distribution amounts may preserve savings.
November 7, 2002... Stock market declines and corporate accounting scandals have taken a toll on retirement savings for many taxpayers. But a new revenue ruling from the U.S. Treasury Department and the IRS (Rev. Rul. 2002-62) provides taxpayers with a way to...

How small business corporate returns are filed and processed.
November 7, 2002... Following is an overview of how small business corporate taxpayers file their tax returns and how the IRS generally processes small business corporate elections and tax returns: [check] Taxpayers file Form 2553, Election by a Small Business...

Compression of marginal rates and the ability to exercise incentive stock options. (Tax Strategies).
November 7, 2002... A favorite form of performance compensation for corporate executives is the granting of stock options. Why? Executives have the flexibility to determine when they want to exercise the options and, therefore, control the timing of the tax event....

Business or entertainment? Deductions hinge on the distinction. (Business Deductions).
November 7, 2002... No matter what the industry, there's a fine line between a true business expense that involves entertainment, and entertainment expenses incurred by the business. In a recent case, the Sixth Circuit U.S. Court of Appeals supported the IRS's...

Coming soon: free e-filing. (Executive's Briefcase).
November 7, 2002... The Department of Justice (DOJ) has decided to allow a group of private-sector firms to form a consortium to offer taxpayers an easier way to obtain free electronic tax preparation and filing services in coordination with the IRS. "This...

Penalty refund available to EFTPS pilot participants. (Executive's Briefcase).
November 7, 2002... If your company paid a federal tax deposit (FTD) penalty that was assessed in the third or fourth quarter of 2001, you may be eligible for a refund of that penalty. The IRS has launched a pilot program to determine whether offering a one-time...

Building Owners have hard time obtaining terrorism insurance. (Executive's Briefcase).
November 7, 2002... Whether your company owns its own facilities or leases property from another owner, you might be interested in a recent survey by the Building Owners and Managers Association (BOMA) International (www.boma.org). The survey found that more...

Sole proprietor can't deduct management fees. (Business Expenses).
November 7, 2002... If a sole proprietor deducts payments made to a separate corporation that he or she formed, he or she must prove that the services were legitimate business expenses performed by an employee or independent contractor of that corporation....

Rising health-care costs create business challenges. (Compensation & Benefits).
November 7, 2002... Health-care costs are going up an average of 13 to 15 percent or more this year, and it's unlikely that 2003 will be any different. Employees will be seeing higher premium contributions and increased co-payments. The 2002 Kaiser Family...

Tax question.
November 7, 2002... Q My daughter started college this fall on a full, four-year scholarship. Is the scholarship taxable? A The general rule is that a scholarship is tax-free to the extent that it covers (1) tuition and fees required for attendance at the...

A Comprehensive approach to year-end planning.
November 21, 2002... As the end of 2002 approaches, you are probably hearing a lot about the need to do "year-end planning." To some, this simply means ensuring that their 2002 federal and state income tax withholdings are sufficient to avoid underpayment...

Pre-2001 assets may qualify for lower capital gains tax rate. (Investment Planning).
November 21, 2002... Taxpayers now have more time to make an election under Section 311 of the Taxpayer Relief Act of 1997 to treat assets held on January 1, 2001, as having been sold and then reacquired on that date [Notice 2002-58, 2002-35 IRB]. As a result of...

Company that controls purse strings is liable for payroll taxes (Payroll Taxes).
November 21, 2002... If your company finances a startup business and agrees to pay the startup's expenses, your company may be liable for payroll taxes for employees of both companies. That was the message in a recent internal legal memorandum from the IRS. ...

Some refinancing costs may be deductible. (Executive's Briefcase).
November 21, 2002... If you recently refinanced your home mortgage, you may be eligible to deduct some of the associated costs. Points paid to obtain an original home mortgage can be, depending on circumstances, fully deductible in the year paid. However, points...

Consider the options for short-term reward programs. (Executive's Briefcase).
November 21, 2002... Short-term reward programs can quickly improve employees' performance--and even bring about the desired level of performance, says R. Brayton Bowen, author of Recognizing and Rewarding Employees (McGraw-Hill). However, he says for a reward...

Senior managers working more hours than five years ago. (Executive's Briefcase).
November 21, 2002... Executives polled in a recent survey report that they work an average of 54 hours each week. More than one-third (36 percent) said their time spent on the job has increased compared to five years ago. Developed by Robert Half International Inc....

The implications of stock option expensing. (Business Expenses).
November 21, 2002... U.S. companies hold wide-ranging views regarding the appropriateness of expensing stock options. However, according to a new survey, a vast majority--87 percent--believes that option expensing is inevitable and will occur within the next five...

Be prepared for lawsuits. (Management strategies).
November 21, 2002... Sooner or later, your company will probably be hit with an employment-related lawsuit. To some degree, it is a cost of doing business, says Marcia K. Keegan, a labor and employment attorney with Wiggin & Dana (Hartford, Conn.). The vast...