Income Tax Law Ruled Unconstitutional

On Monday, May 18, 2015, the United States Supreme Court ruled that Maryland’s state income tax law was unconstitutional. Ok, not the entire law – states can collect income tax.  The Court ruled that Maryland must allow a credit for taxes paid to other states (without a local income tax) against the Maryland local income tax.
 

Deductibility of Dues

Do you pay dues to an organization as part of your business marketing and promotion?  It depends on the type or organization and its purpose that determines whether or not the dues you pay are deductible for tax purposes.
 

Qualified Lessee Construction Allowances

Are you currently leasing or looking to lease retail space?  If so, there is a provision in the Code and Regulations that may be useful to you.  Under certain circumstances, receipt of funds by retail space tenants from the landlord to improve or construct the leased space for use in your business may be excluded from taxes, provided all the rules are followed.
 

ABLE Act of 2014

Near the end of 2014, Congress passed the Achieving a Better Life Experience Act of 2014 (ABLE).  This act was created to encourage and assist with saving private funds for individuals with disabilities.  It also provides secure funding for disability-related expenses of individuals with disabilities to supplement benefits provided through private insurance, Supplemental Security Income (SSI), Medicaid, the individual’s employment, and other sources.
 

A Shareholder’s Guarantee of a Loan to a Closely-held Corporation

Before making any guarantees on loans to your closely-held corporation, you should be aware of the possible tax consequences if your corporation defaults on the loan and you are on the hook to pay it off.  Generally, you can take a bad debt deduction if you are obligated to personally pay the debt.  The deduction may be either a business bad debt deduction or a nonbusiness bad debt deduction.

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