December 16 - Due date for calendar-year corporations to pay the last installment of 2013 estimated income tax.
December 31 - Deadline to complete 2013 tax-free gifts of up to $14,000 per recipient.
December 31 - Deadline for paying expenses you want to be able to deduct on your 2013 income tax return.
December 31 - Deadline for taking 2013 required minimum distributions (RMDs).
You've worked hard to accumulate and protect your wealth this year. Now might be the time to consider tax-savvy ways to give some of it away.
To begin with, you might consider using the annual gift tax exclusion to give money to your family and friends in a tax-favored manner. Up to $14,000 can be given to any number of individuals per year without tapping into your lifetime federal estate tax exemption. The current lifetime exemption is a lofty $5,250,000, but making $14,000 gifts each year could help lower your taxes if your estate is eventually valued above the exemption amount.
Another way to provide for your family is investing in a student's 529 college savings plan. Such contributions can provide for tax-free appreciation and withdrawals when used for qualified college expenses.
The dividing line between a business and a hobby may be thin, but it can look like a canyon when you are on one side and your tax deductions are on the other. The gap is a function of differing treatment of expenses. For example, when you incur ordinary and necessary expenses in the operation of your business, those costs reduce the taxable income of the business. In addition, business losses can generally be used to offset income from other sources, such as wages.
When your activity is considered a hobby, expenses can only be claimed to the extent of income from the activity, and are generally deductible as a miscellaneous itemized deduction on your personal return.
Here are nine ways to help convince the IRS that you have a business rather than a hobby.
Thank you for the opportunity to serve you this past year. Your business is appreciated, and your referrals are welcome. Please mention our name to friends and business associates who may need our services.
Warmest wishes for a happy holiday season and a prosperous 2014.
6700 E. Pacific Coast Hwy., #291
Long Beach, CA 90803
562.594.4681
772 Town & Country Road
Orange, CA 92868
714.542.2388
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