Executive's Tax & Management Report articles from September 2002

Executive's Tax & Management Report archives from September 2002

Employer pays back taxes, employees take deduction.(Brief Article)
September 7, 2002... Under IRC Section 164(a)(3), individuals may deduct state income taxes from their federal taxable income in the year they pay those taxes (if they itemize). They pay their state tax bill on time, and take a deduction on their federal return....

Input sought on "phased retirement".(Brief Article)
September 7, 2002... The IRS is seeking public comments on so-called phased retirement arrangements that give employees the opportunity for a reduced schedule or workload as they near retirement age. The IRS acknowledges that such phased retirement plans offer...

Tax fact.(IRS has 480 different tax forms)(Brief Article)
September 7, 2002... The IRS has 480 different tax forms, plus 280 more to explain how to fill out the first 480. The original Tax Code had 11,400 words; today it has 7 million.

Develop a comprehensive investment plan. (Investment Planning).(Brief Article)
September 7, 2002... Everyone seems to be keeping a close eye on the stock market to see if it has "bottomed out." In the late 1990s, the same people watched the market to see how much their net worth appreciated each day. Unless you are a professional money...

Tax question.(Brief Article)
September 7, 2002... Q My company just purchased new desks and chairs for our sales division. Can we deduct the entire cost on our 2002 return? A No. You generally cannot deduct, in one year, the entire cost of property you purchased--either to use in your...

What qualifies as a "principal" residence? (Family Tax Angles).(Brief Article)
September 7, 2002... Most taxpayers are aware of the 1997 law change that allows them to sell a principal residence and exclude as much as $500,000 (if married filing jointly) of gain from tax. The tax law has many provisions that allow property to be sold or...

Deductions limited for "accumulated taxable income". (Accumulated Earnings Tax).(Brief Article)
September 7, 2002... The tax code imposes a penalty tax on a corporation that accumulates earnings beyond its reasonable business needs [IRC [section] 533(a)]. The penalty tax is applied to the corporation's "accumulated taxable income" [IRC [section] 531(a)]. ...

IRS stops sending K-1 mismatch notices. (Executive's Briefcase).(Brief Article)
September 7, 2002... The IRS recently stopped a new compliance effort aimed at encouraging individual taxpayers to properly report income and losses passed through from partnerships and S corporations. Earlier this year, the IRS announced that it would send...

Most workers spend part of lump-sum distributions. (Executive's Briefcase).(Brief Article)
September 7, 2002... Workers are increasingly likely to preserve their lump-sum distributions from retirement plans When they change jobs and are less likely to spend the money on the consumption of goods and services (such as boats or vacations), according to a...

Set a document retention policy. (Executive's Briefcase).(Brief Article)
September 7, 2002... You may not have to worry about an Enron-type situation developing at your company, but you should be concerned with other potential problems involving document retention. If your company becomes involved with litigation over such issues...

House approves fast-track bill for displaced workers. (Executive's Briefcase).(Brief Article)
September 7, 2002... The House recently approved a compromise trade bill that includes a refundable tax credit for displaced workers that they could use to cover health insurance premiums. This bill is the latest in a series proposed by House and Senate members who...

High court OKs employer-only tip assessments. (Payroll Taxes).
September 7, 2002... Restaurant workers and other tipped employees are supposed to report all of their tips to their employers. And employers are supposed to pay Social Security and Medicare (FICA) taxes and withhold income taxes and the employee's share of FICA...

Extra work requires extra pay. (Compensation & Benefits).(Brief Article)
September 7, 2002... Your company could face a lawsuit if your nonexempt employees use cell phones, pagers, and laptops for work-related activities when they're off the clock. Half of Americans take their work home, according to a recent survey commissioned by...

EBITDA: the right metric to determine financial health?(earnings before interest, taxes, depreciation, and amortization)
September 21, 2002... Whether your company is publicly traded or whether you invest in the stock market yourself, you've probably noticed that EBITDA has been in the spotlight lately. Most people define EBITDA as "earnings before interest, taxes, depreciation,...

Rate reduction credit tops list of tax return errors.(Brief Article)
September 21, 2002... Whether or not you pay someone else to prepare your taxes, the IRS can hold you responsible for the amount of income and the number of deductions you claim on your tax return. Keep in mind that even experienced accountants occasionally make...

IRS cracks down on shady split-dollar life insurance. (Personal Taxes).
September 21, 2002... Less than a year after issuing guidance on upcoming regulations, and just one month after issuing proposed regulations, Treasury and the IRS felt the need to clarify their position on split-dollar life insurance arrangements. (See the February...

Dental expense reimbursement plans offer pre-tax savings. (Compensation & Benefits).(Brief Article)
September 21, 2002... Almost every type of health care cost is on the rise. Employers, self-employed individuals, and employees are all wondering how they are going to manage future cost increases. They recognize that the most cost-effective benefits package is one...

Tax Court sides with IRS in calculation of AMT. (Alternative Minimum Tax).(Brief Article)(Statistical Data Included)
September 21, 2002... The alternative minimum tax (AMT), on many levels, has long been the bane of individuals and corporations. Typically, taxpayers (and their accountants) try to schedule or minimize the applicable tax preference items and adjustments in an effort...

Timing retirement plan deductions. (Managing Your Business).(Brief Article)(Statistical Data Included)
September 21, 2002... For many companies, the deduction for retirement plan contributions is one of the biggest deductions they claim. So, of course, the earlier these companies can claim deductions for their contributions, the better their tax pictures. In a...

IRS sets 2002-2003 Priority Guidance Plan. (Tax Procedures).(Brief Article)
September 21, 2002... The Treasury Department and the IRS have released the 2002-2003 Priorities for Tax Regulations and Other Administrative Guidance. The Priority Guidance Plan identifies the tax issues that Treasury and the IRS will address through regulations,...

Home sale exclusion available to those affected by terrorist attacks. (Family Tax Angles).(Brief Article)
September 21, 2002... Taxpayers affected by the September 11, 2001, terrorist attacks who sold their home before meeting the usual two-year use and ownership requirements will be able to exclude some or all of that gain, according to Treasury and the IRS Notice...

Tax question.(taxation of individual retirement accounts)(Brief Article)
September 21, 2002... Q My father mistakenly closed out his individual retirement account (IRA) this year at age 70 1/2--instead of simply taking the required minimum distribution. Is he liable for income tax on the full amount of the distribution? A Yes, a...

Many businesses are still unprepared for disasters. (Executive's Briefcase).(business continuity and disaster recovery planning)(Brief Article)
September 21, 2002... Last year's terrorist attacks prompted more companies to make business continuity and disaster recovery planning a top priority and caused nearly 75 percent of businesses with plans in place prior to September 11, 2001, to update or improve...

What challenges lie ahead in corporate America? (Executive's Briefcase).(Challenges Facing the American Workplace)(Brief Article)(Statistical Data Included)
September 21, 2002... The Employment Policy Foundation's seventh-annual American Workplace Report, "Challenges Facing the American Workplace," identifies seven major future challenges for corporate America: 1. Recession and terrorism. By conservative estimates,...