Publications
Ethics and professionalism means to always place the public interest first. Since information is everywhere and the financial landscape distorts your vision, our goal at Vision Financial Management, Inc. is to provide current accounting, tax and financial management information to everyone.
Buy or Lease
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It's wise for small business owners to consider their options when either buying or leasing a business vehicle. On the surface the decision seems straight forward - if the decision is to purchase the vehicle it will require more up-front costs, ultimately the vehicle is yours in the end. Leasing the vehicle may seem like the better option as up-front costs are reduced and the asset is returned at the end of the lease term. The reality is that everything depends on your specific situation when planning for your next acquisition while implementing sound business tax strategies. Let's explore.
Pass-Through Income Deduction (IRC § 199A)
The Tax Cuts & Jobs Act (TCJA), enacted in 2017 allows individual taxpayers, trust, and estates to deduct up to 20 percent of their domestic qualified business income (QBI) from a sole proprietorship, a partnership, and an S corporation for tax years beginning after December 31, 2017, and before January 1, 2026 (Code Sec. 199A). In order for income to qualify for the QBI deduction it must be effectively connected with a U.S. trade or business.
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The key is that we understand the general concepts of the Qualified Business Income (QBI) deduction, also known as the the "pass-through deduction." In general, calculating the IRC § 199A deduction for taxpayers whose taxable income is below the phaseout threshold is simple. The QBI deduction, is generally the lesser of combined QBI or 20 percent of any excess of taxable income over net capital gain reported in the tax year. In order to qualify for the QBI deduction certain conditions must be met. Take a moment to understand the financial implications QBI may have on you and your business(s). Let's explore.
Qualified Tuition Programs (QTP or 529 Plans)
An individual may open an account in a qualified tuition program to help pay for the qualified higher education expenses of a designated beneficiary either through a prepaid tuition or college savings program (Code Sec. 529). Generally, a QTP is a plan operated by a state or by an eligible educational institution. Except for certain unrelated business income, a 529 plan itself is exempt from federal taxation.
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Your designated beneficiary, such as a child or grandchild may benefit from a qualified tuition program. The purpose of the QTP is to make it easier to plan and save for education related expenses. Accumulated funds in a qualified tuition program may be utilized to pay for college and post-secondary training, or for a child's tuition who is enrolled or attending an elementary or secondary public, private, or religious school. Considering the rising cost of education QTPs offer unique incentives. Let's explore.
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