#tax-planning
Tax Planning
Strategic tax planning to minimize liability and maximize savings
Community Property Trusts: How Business Owners in Any State Can Get a Full Basis Step-Up
Alaska, Tennessee, Kentucky, Florida, and South Dakota let married couples in any state opt into community property treatment through a trust, so the entire asset — not just half — gets an IRC Section 1014(b)(6) basis step-up at the first spouse's death. What business owners should know about Section 754 elections, the one-year gift trap under Section 1014(e), and the unresolved IRS guidance.
Commuter Benefits in 2026: The IRS Raised Pre-Tax Transit and Parking Limits to $340/Month
The IRS raised the 2026 qualified transportation fringe benefit limit to $340/month each for transit and parking (up from $325), an $8,160 combined annual pre-tax ceiling. Here's how the benefit works, the 7.65% employer FICA savings, where 20-employee mandates in NYC, San Francisco, Seattle, and New Jersey make it legally required, and how to keep the bookkeeping clean.
Connecticut's New R&D Tax Credit for LLCs and S Corps: What Public Act 26-68 Means for Small Businesses
Connecticut's Public Act 26-68, signed May 26, 2026, gives pass-through entities — LLCs, S corps, and partnerships with gross income under $70 million — a 6% R&D tax credit for the first time, refundable at 65% (90% for biotech), capped at $1.5 million per business and $25 million statewide, and claimed through a DECD voucher within 90 days of year-end.
Delaware Just Raised Its LLC Annual Tax From $300 to $400 — Here's What Every Out-of-State Entity Owes
Delaware HB 400, signed May 21, 2026, raises the flat annual tax on LLCs, LPs, and GPs from $300 to $400 and the registered-series tax from $75 to $100 — retroactive to January 1, 2026. Here's who owes it, when it's due, and how to budget for it.
IRS Announces 2027 HSA and HDHP Limits: What Small Business Owners and the Self-Employed Should Plan For Now
Revenue Procedure 2026-24 raises 2027 HSA contribution limits to $4,500 self-only and $9,000 family, with HDHP minimum deductibles of $1,750/$3,500 and out-of-pocket maximums of $8,700/$17,400. Here's what the new numbers mean for self-employed owners — including why the HSA deduction doesn't reduce self-employment tax, the April 15 contribution deadline that extensions don't move, and the over-contribution traps around employer contributions and the Last-Month Rule.
New Hampshire's HB 1433 Child Care Tax Credit: What Employers Can Claim Against BPT and BET
New Hampshire's HB 1433, signed July 9, 2026, creates a Child Day Care Creation Tax Credit worth 50% of qualifying costs against the Business Profits Tax and Business Enterprise Tax, capped at $5 million statewide with a four-year carryforward. Here is who qualifies under the 12-slot rule, how it differs from HB 1634, and what to track before 2028 filings.
QDOT Rules, Rewritten: What Treasury Decision 10050 Means for Business Owners with Non-Citizen Spouses
Treasury Decision 10050, effective July 10, 2026, delivers the first substantial update to Qualified Domestic Trust (QDOT) regulations in three decades. Here is why the unlimited marital deduction excludes non-citizen spouses, what a QDOT requires — a U.S. trustee, an affirmative Form 706 election, and security for trusts over $2 million — and which four procedural fixes the new rules make for business owners' estates.
Vermont Just Tripled Its R&D Tax Credit: What Act 164 Means for Small Manufacturers
Vermont's Act 164, signed June 18, 2026, raises the state R&D tax credit from 27% to 75% of the federal Section 41 credit starting in tax year 2027 and lifts the statewide cap to $3.5 million. A $50,000 federal credit now yields $37,500 in Vermont instead of $13,500 — here's how small manufacturers can prepare their Form BA-404 documentation.
How to Get the IRS to Answer You in Writing: Private Letter Rulings and Determination Letters for Small Businesses
Oral advice from the IRS is not binding — a private letter ruling is. Under Revenue Procedure 2026-1, 9100 relief for a missed tax election generally costs about $14,500, with reduced tiers near $3,450 and $9,775 for smaller organizations, and the IRS must make contact within 21 days of a complete request. Here's when a ruling is worth the fee, what the request must contain, and the no-fee alternatives — Form SS-8, Form 3115, and Rev. Proc. 2013-30 — that cover most common cases.
Safe Harbor 401(k) Plans in 2026: How Small Businesses Skip Nondiscrimination Testing
A safe harbor 401(k) automatically passes IRS ADP/ACP nondiscrimination testing in exchange for a fixed employer contribution — a 3% nonelective or a match of up to 4%. Here's how the three formulas compare in cost, the December 1 retroactive adoption deadline, and the 2026 limits ($24,500 deferral, $72,000 total additions, mandatory Roth catch-ups for high earners).
Depreciation Recapture Explained: The Tax Bill Waiting When You Sell Depreciated Equipment or Real Estate
Depreciation recapture taxes the deductions you already took when you sell a business asset at a gain — Section 1245 equipment gains are recaptured as ordinary income at rates up to 37%, while Section 1250 real estate depreciation is capped at 25%. With 100% bonus depreciation restored and the Section 179 limit at $2,560,000 for 2026, a fully expensed asset has a $0 basis from day one, so nearly the entire sale price becomes taxable. Here's how the rules split, a worked example, and five strategies owners use to manage the bill.
You Bought a Micro-SaaS, Not Software: Purchase Price Allocation and the 15-Year Section 197 Rule
Software acquired as part of buying a business amortizes over 15 years under IRC Section 197 — not the 36 months standalone software gets. How to allocate a micro-SaaS purchase price across the seven IRS asset classes, agree on Form 8594 with your seller, and record it in a plain-text ledger.