Articles From Lumsden McCormick

In 2025, the Social Security wage base will rise to $176,100, increasing payroll tax obligations for employers with high earners. Employers and self-employed individuals will continue to pay FICA taxes at the same rates, with Social Security tax capped at the new wage base and no cap for Medicare. Businesses should plan for these changes and consult for compliance guidance.

A defined-value gift can help maximize the current federal gift and estate tax exemption by transferring hard-to-value assets, like business interests, at a specified dollar amount. This strategy, if structured with precise language and a formula clause, can reduce tax risks by aligning the gift’s value with IRS standards. Consulting with an advisor ensures proper documentation and minimizes potential IRS challenges.

Sharing office space can help nonprofits reduce costs by cutting rent, utilities, and sharing resources such as equipment and staff. However, organizations should carefully evaluate potential challenges like culture clashes and legal issues before committing. Exploring options like co-renting with other nonprofits or leasing space from foundations can lead to significant savings and operational efficiencies.

As the IRS intensifies its audit efforts, particularly targeting large corporations and high-income individuals, businesses must adopt proactive strategies to prepare for potential audits. By maintaining thorough documentation and understanding common audit triggers, companies can effectively manage the audit process and reduce stress. This article outlines key preparation steps and offers guidance on responding to IRS inquiries to ensure a smooth experience.

On June 27, the California legislature enacted California Revenue and Taxation Code (CRTC) section 25128.9 under S.B. 167.

Maine has amended Title 36 of the Maine Revised Statutes pertaining to the sales tax treatment of lease and rental transactions in the state.

California has enacted two important pieces of legislation that may prove adverse to businesses and individuals.

Probate is the legal process of settling an estate and transferring assets to heirs, but it can expose personal details to the public and attract unwanted attention. While the process typically takes six to nine months, it can be avoided through a revocable living trust, which keeps asset distribution private and outside of probate court. Understanding the probate process and available alternatives is crucial for effective estate planning.

State and local tax (SALT) credits and incentives programs continue to be underutilized. Despite the substantial value they can add for businesses, BDO’s 2024 CFO Outlook Survey found that just 34% of CFOs plan to optimize costs by claiming tax credits in the next 12 months.

Board independence for nonprofits goes beyond just preventing conflicts of interest. The IRS defines independence using a four-part test, and failing to meet these criteria could raise concerns from the IRS and donors. To strengthen governance, nonprofits should aim to have at least two-thirds of their board members independent, with additional precautions for audit and compensation committees.