Plain-English tax guides and useful links

If your business plans repairs or improvements to a building it owns or leases before year end, careful planning may let you deduct the cost this year instead of depreciating it over decades.

The IRS tangible property regulations include a safe harbor for small taxpayers with average annual gross receipts of $10 million or less. It allows current deduction of repairs, maintenance and improvements to an eligible building if the total for the year doesn’t exceed the lesser of $10,000 or 2% of the building’s unadjusted basis, and the building’s unadjusted basis is $1 million or less. The election is made annually with a timely filed return.

Other options, such as the de minimis safe harbor, the routine maintenance safe harbor, Section 179 and bonus depreciation for qualified improvement property, may also apply. We’ll help you choose the combination that produces the best result.

Year end brings plenty of payroll tasks, and employee and owner benefits are easy to overlook. Identifying taxable benefits before the final payroll runs helps prevent reporting errors, payroll tax problems and Form W-2 corrections.

Common examples include personal use of a company vehicle, gift cards and other cash-equivalent gifts, group-term life insurance over $50,000, non-accountable expense allowances, and health insurance premiums for more-than-2% S corporation shareholders, which must be included in their W-2 wages.

Review your benefits with us in November or early December so values can be calculated and run through payroll before December 31.

Selling a highly appreciated investment late in the year can trigger an additional cost: the 3.8% net investment income tax (NIIT). It applies to the lesser of your net investment income or the amount by which your modified adjusted gross income exceeds $200,000 (single or head of household), $250,000 (married filing jointly) or $125,000 (married filing separately). These thresholds are not indexed for inflation.

Strategies include harvesting losses to offset gains, spreading a sale over two tax years with an installment sale, donating appreciated assets to charity, or timing other income. Before you sell, let us estimate the impact.

Don’t ignore it, and don’t panic. Read the notice number in the upper or lower right corner (for example CP2000, CP14 or LT11), note the response deadline and keep the envelope.

Verify the letter is genuine: the IRS initiates contact by mail, not by text, email or social media, and never demands payment by gift card. Then call us. With your Form 2848 we can pull your transcripts, review the notice and respond within the deadline. Missing a deadline can cost you important appeal rights.

Florida has no personal income tax, but your former state may still claim you as a resident unless you clearly change your domicile. Helpful steps include filing a Declaration of Domicile with the county clerk, getting a Florida driver’s license and registering vehicles, registering to vote, applying for the homestead exemption, moving important possessions, and updating your address with banks, brokers and the IRS.

Where you spend your time matters too, so keep a calendar. High-tax states such as New York, New Jersey and California audit departures closely. We prepare the final part-year return for your former state and help you document the move.

U.S. citizens, green card holders and residents who have a financial interest in or signature authority over foreign financial accounts must file FinCEN Form 114 (the FBAR) if the aggregate maximum value of those accounts exceeded $10,000 at any time during the year.

The FBAR is due April 15 with an automatic extension to October 15, and is filed electronically with FinCEN, separately from your tax return. Many filers also need IRS Form 8938. If you missed prior years, there are procedures to catch up that may reduce or eliminate penalties. Talk to us before filing late returns on your own.

Florida businesses juggle several state obligations in addition to federal returns: the annual report with the Division of Corporations (between January 1 and May 1), sales and use tax returns (generally due on the 20th of the month after the reporting period), quarterly reemployment tax reports, the tangible personal property tax return by April 1, and the corporate income tax return (Form F-1120) for C corporations.

Local business tax receipts are also required by most counties and cities. We maintain a filing calendar for every business client so nothing is missed.