“Why do I need to worry about proper classification?  It’s not my responsibility.  I am just a small business owner trying to grow my business……”

Unfortunately, improperly classifying someone as an independent contractor when they are truly an employee can cause some major headaches!

The idea that whether a worker classifies as an independent contractor or employee does not matter is a major misconception.  As a business owner, it is important to make sure that worker classifications are correct.

It seems as though the stock market has been on a roller coaster ride for most of the year with all of its ups and downs. 

Did you sell stock for a gain during the year and are now looking to offset some of those gains during the fourth quarter?  If so, it’s important to be aware of the “wash sale” rule in order to prevent any unexpected year-end tax planning faux pas.

Under the wash sale rule, when stocks or securities are sold for a loss and substantially identical stocks or securities are repurchased within a 30-day period before or after the sale date, the loss cannot be claimed for tax purposes. This rule is designed to prevent taxpayers from using the tax benefit of a loss without parting with their stock ownership in any significant way. Participation in a dividend reinvestment plan can trigger this rule if stocks are sold within a 30-day period prior to the issuance and reinvestment of a dividend.

Planning to make a contribution to your favorite charity or alma mater and want to maximize your charitable contribution….

Consider donating appreciated stock from your investment portfolio instead of cash. Tax benefits from the donation can be increased and the organization is just as happy to receive the stock.

Where the donated property has appreciated in value the donor benefits by NOT having to recognized a taxable gain on the appreciation.  Yet the charity receives the same benefit either way.  These rules allow for the “doubling up,” so to speak, of tax benefits: a charitable deduction, PLUS avoiding tax on the appreciation.  Both donor and charity maximize the gift.Continue reading