Tax Articles

Avoiding probate in estate planning is crucial for ensuring a smoother and more efficient transfer of assets to beneficiaries. It helps to minimize legal costs, reduce delays, and maintain privacy for the estate and its heirs. Proper planning can significantly ease the burden on loved ones during a difficult time.

A recent U.S. Tax Court case highlights how poor documentation can lead to the disallowance of business expense deductions, including meals, supplies, and home office costs. The taxpayer failed to provide sufficient evidence linking the expenses to her business, underscoring the importance of maintaining accurate and timely records.

Qualified Charitable Distributions (QCDs) allow individuals 70½ or older to make tax-efficient donations directly from their IRAs to nonprofits, helping satisfy required minimum distributions while reducing taxable income. Recent updates under the SECURE 2.0 Act have expanded QCD limits and introduced new giving options offering donors more flexibility and nonprofits greater fundraising potential.

Qualified Charitable Distributions (QCDs) allow individuals aged 70½ or older to transfer funds directly from their traditional IRAs to qualified nonprofits, satisfying required minimum distributions (RMDs) while excluding the amount from taxable income. For 2025, individuals can contribute up to $108,000 annually ($216,000 for eligible couples), offering a tax-efficient giving strategy, especially for those who don’t itemize deductions. Recent updates through the SECURE 2.0 Act also introduced the option to make a one-time QCD enabling donors to support charities while receiving income for life. 

The One, Big, Beautiful Bill Act proposes to restore the immediate deductibility of research and experimental (R&E) expenses, reversing the changes introduced by the Tax Cuts and Jobs Act (TCJA) that required these expenses to be capitalized and amortized over several years. If enacted, this bill would provide significant financial relief to innovation-focused businesses by allowing them to deduct R&E expenditures immediately. Please note that the tax law discussed in this article is currently proposed and has not yet been enacted.

An Employee Stock Ownership Plan (ESOP) offers a strategic way for closely held business owners to transition ownership while preserving wealth and minimizing taxes. By selling company stock to an ESOP, owners can gain liquidity, retain control, and create a valuable employee benefit, all within a tax-advantaged structure. However, the benefits must be weighed against setup and ongoing administrative costs.

The One, Big, Beautiful Bill Act, a new bill in Congress, proposes significant changes to business tax breaks, including restoring 100% bonus depreciation, increasing Section 179 expensing limits, and making the Qualified Business Income deduction permanent. These changes aim to provide substantial tax relief and flexibility for business owners, encouraging investment and innovation. Please note that the tax law discussed in this article is currently proposed and has not yet been enacted.

The proposed federal tax legislation aims to simplify the tax code, reduce rates for individuals and businesses, and eliminate certain deductions and credits. The bill also seeks to increase the standard deduction and expand tax credits for families, while ensuring that the changes are revenue-neutral over the long term. Please note that the tax law discussed in this article is currently proposed and has not yet been enacted.

Maryland's fiscal 2026 budget introduces a 3% sales tax on data and IT services, along with new tax brackets and increased rates for high-income earners. The budget also raises taxes on cannabis, sports betting, and vehicle excise, while proposals to reduce corporate tax rates and repeal inheritance tax were not included.

Business travel during the summer can offer valuable tax deduction opportunities if the trip is primarily for business purposes and involves an overnight stay. Deductible expenses may include transportation, lodging, meals (at 50%), and other business-related costs, while personal and entertainment expenses remain non-deductible.  Proper documentation and a clear separation of business and personal travel expenses are essential to ensure compliance and maximize tax benefits.