The year is almost over, so make sure you’re fully prepared for tax season. BDO Alliance USA has released their annual “Year-End Tax Planning Letters” for individuals and businesses.

The 2019 Individual Letter covers helpful strategies and tips for where to invest to reap the greatest returns and how to lower total tax liability. The Business Letter offers important tax-saving strategies focusing on recent changes in federal taxation. Read and download both letters below.

Year End Tax Planning

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Each quarter brings new and complex changes to tax codes and regulations. Here are some changes for Quarter 3 that you need to be aware of:

• In August, the IRS proposed regulations that would close estate and gift tax loopholes commonly used to lower the taxable value of their transferred assets and minimize the burden of estate of gift tax. The proposed regulations will effectively increase the tax required by business and estate owners in their lifetime.

• A limited liability company (LLC) affected by Bernie Madoff’s Ponzi scheme was able to claim a theft loss deduction. It was determined that the losses could be deducted as long as they are not covered by insurance or otherwise.

• Pension plan payouts, typically a “cash or annuity” choice, can now be done as a combination of a lump sum, with the remainder split over lifetime monthly payments.

• A new self-certification process is in place for individuals who miss the 60-day time limit for rolling over retirement funds into an IRA or separate retirement plan.

• Residence interest limits will now be applied on a per-individual basis, rather than a per-residence basis for unmarried co-owners.

• Research tax credit is not available for computer software that is developed by or for the benefit of the taxpayer primarily for its internal use unless it meets a “high threshold of innovation test”, meaning that it is innovative, involves significant economic risk, and it is not commercially available for use by the taxpayer.

• For tax years beginning after Dec. 31, 2017, new regulations are in place for how to elect new partnership audit rules.

• Employers may now pay a per-diem amount to an employee on business travel instead of a reimbursement for actual expenses. There was a raise in the uniform rate for high-cost and low-cost areas in the continental US that have been raised. High-cost area per-diem is raised $7 to $282, and the low-cost area per-diem increases $4 to $189.

Call Burkett Burkett & Burkett, Certified Public Accountants, P.A. with any questions you may have or for assistance navigating these changes. Read the full article here.

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