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Local Voices

Beware of Changes for 2013 Business Tax Planning

– As the 2013 tax year comes to an end, business owners should take a close look at new laws that could bring unexpected tax consequences. With a wide assortment of changes on the books, consulting with a qualified tax attorney is your best strategy for protecting your interests.

First it’s important to separate your business and personal expenses because different laws apply to each.  As a business owner, a higher tax rate this year on high-income individuals may determine your strategy for pass-through or dividend income. Certain dividends and capital gains will now be taxed at a maximum of 20 percent versus the previous 15 percent, assuming you are in the new 39.6 percent tax bracket ($400,000 for married and $450,000 for couples filing jointly).

Your adjusted gross income will also impact your itemized deductions, which have been reduced this year. Personal exemptions will be completely phased out when income exceeds the threshold amount by $125,000. The maximum reduction in itemized deductions under this limit is 80 percent. The itemized limitation does not apply to investment interest, medical expenses, or casualty losses although medical expenses must now exceed 10 percent of adjusted gross income to be deductible.

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There are additional taxes this year on Medicare based on earned income over a threshold amount. The threshold varies based on your filing status. For the first time this includes investment income minus expenses.

Has your company restructured this year?  If so, there are many possible changes to your deductions and property expenses. However, certain improvements to property may qualify your business for extra benefits if they are done by the end of this year.

A corporate law expert can help you make last-minute changes to your tax strategy and prepare you for what’s coming in 2014.

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For more information about individual, corporate and estate tax preparation and planning, contact Phil Ruben of Ruben Firsel & Ross LLC at (847) 582-9901 or visit www.rfrlegal.com.

About Ruben Firsel & Ross LLC:  Founded in 2011, the law firm of Ruben Firsel & Ross LLC offers clients the counsel of highly experienced attorneys in an efficient, responsive boutique setting with reasonable and flexible fee structures.  With extensive knowledge of corporate, real estate, securities, and estate planning law, the attorneys of RFR serve individuals and businesses of all types from its offices in Bannockburn and Chicago.  For detailed information about RFR’s practice, visit www.rfrlegal.com or contact info@rfrlegal.com.





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