Changes to Puerto Rico benefits explored

Back in 2012, Puerto Rico enacted a law (Act 22) to attract wealthy mainland individuals to invest in its communities. In exchange, Puerto Rico and a U.S. tax code provision provide certain tax benefits to Americans who buy homes there. However, the law has driven up local housing prices and reduced tax income. In response, […]

Will the tariff proposals be implemented?

One tax-related proposal of President-Elect Trump is to increase tariffs on foreign imports. On the campaign trail, he said he would impose a 10% to 20% tariff on most imported goods, a 60%-or-more tariff on Chinese products and a 100% tariff on vehicles from Mexico. His position is that tariffs would boost U.S. manufacturing and […]

Is it ordinary and necessary?

Business owners can generally deduct “ordinary and necessary” business costs, including eligible legal fees. In one U.S. Tax Court case, a taxpayer argued he was entitled to deduct nearly $600,000 in legal expenses on his return. He claimed the expenses were related to a fraud loss at an investment company where he worked as the […]

Trump proposes changes to R&D credit

One of the many tax changes proposed by President-elect Donald Trump is to expand the Section 174 deduction for R&D expenditures. Under the Tax Cuts and Jobs Act (TCJA), R&D expenditures paid or incurred beginning in 2022 must be capitalized and amortized over five years for domestic R&D and over 15 years for foreign R&D. […]

Amended versus Superseding tax returns

What’s the difference between an amended tax return and a superseding return? Amended returns can be filed to correct or change information on a timely filed return, after the original or extended due date has passed. However, a superseding return is a rare opportunity to change or correct a filed return before the original or […]

Tax outlook changes

What does a Donald Trump victory mean for taxes? Many provisions in his signature tax legislation from his first time in the White House, the Tax Cuts and Jobs Act (TCJA), are scheduled to expire at the end of 2025. Now, there is a better chance that most will be extended. But the former and […]

Gifts to employees and clients

As your business gets ready for the holiday giving season, keep the following tax limits in mind. Your company can only deduct up to $25 per person per year for gifts to recipients such as clients and business partners. You can also generally deduct $25 per person per year for employee gifts. And, as long […]

Is my IRA contribution tax deductible?

Not everyone is eligible to make tax-deductible contributions to a traditional IRA account. For example, for 2025, eligibility for single taxpayers who also contribute to a workplace retirement plan (such as a 401(k) plan), will phase out with income between $79,000 and $89,000. For joint filers, the phaseout range for the spouse who contributes to […]

The SIMPLE retirement plan option

A Savings Incentive Match Plan for Employees (SIMPLE) comes in two flavors: the SIMPLE IRA or the SIMPLE 401(k). Business owners often opt for the SIMPLE IRA. Contributions to a SIMPLE are made on a pretax basis. Contribution limits to SIMPLEs are adjusted annually for inflation. In 2025, employees may generally elect to contribute up […]

IRS issues 2025 retirement plan numbers

The IRS has issued 2025 retirement plan numbers. In 2025, individuals with IRAs can contribute up to $7,000 (the same as in 2024). The IRA catch-up contribution for those age 50 or over will remain at $1,000. For those with 401(k) plans, the 2025 contribution limit will increase to $23,500, up from $23,000 in 2024. […]