First State CPAs and Associates updated their cover photo.

6 hours ago

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First State CPAs and Associates

6 hours ago

𝗖𝗮𝗻 𝗜 𝗰𝗹𝗮𝗶𝗺 𝗮𝗻 𝗲𝗱𝘂𝗰𝗮𝘁𝗶𝗼𝗻 𝘁𝗮𝘅 𝗰𝗿𝗲𝗱𝗶𝘁 𝗳𝗼𝗿 𝗺𝘆 𝗴𝗿𝗮𝗱𝘂𝗮𝘁𝗲 𝘀𝘁𝘂𝗱𝗲𝗻𝘁 𝗶𝗳 𝗜'𝗺 𝗮𝗹𝗿𝗲𝗮𝗱𝘆 𝗰𝗹𝗮𝗶𝗺𝗶𝗻𝗴 𝗼𝗻𝗲 𝗳𝗼𝗿 𝗺𝘆 𝘂𝗻𝗱𝗲𝗿𝗴𝗿𝗮𝗱?

You can claim these education tax breaks across different family members on the same return. While you can't claim two credits for the same student in a single year, you can claim the American Opportunity Tax Credit for your undergraduate child while simultaneously claiming the Lifetime Learning Credit for an older child in graduate school.

Just make sure you avoid 529 plan double-dipping. The IRS strictly prohibits using the exact same dollar of tuition to justify both a tax-free 529 distribution and the Lifetime Learning Credit.

To get the full value of both incentives, follow this setup:
• Pay up to $10,000 in qualified graduate-school expenses with funds other than a 529 distribution to secure the 20% tax credit.
• Use tax-free 529 funds for other qualified expenses that aren’t being used to claim the credit.
• Avoid using 529 funds for every dollar of qualified tuition, or you may have no remaining expenses available to claim the credit.

Do you currently use a 529 plan to save for your family's higher education expenses? ... See MoreSee Less

First State CPAs and Associates

1 day ago

𝗪𝗵𝗲𝗻 𝗜 𝘀𝗲𝗹𝗹 𝗺𝘆 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀, 𝗵𝗼𝘄 𝗺𝘂𝗰𝗵 𝗼𝗳 𝘁𝗵𝗲 𝗽𝘂𝗿𝗰𝗵𝗮𝘀𝗲 𝗽𝗿𝗶𝗰𝗲 𝗮𝗺 𝗜 𝗮𝗰𝘁𝘂𝗮𝗹𝗹𝘆 𝗴𝗼𝗶𝗻𝗴 𝘁𝗼 𝗸𝗲𝗲𝗽 𝗮𝗳𝘁𝗲𝗿 𝘁𝗮𝘅𝗲𝘀?

The short answer is that the deal structure matters just as much as the final sticker price.

If a buyer pushes you into an asset sale, they are trying to buy your equipment and inventory to secure tax write-offs for themselves. The trap for you is that depreciation recapture rules can hit those gains at much higher ordinary income rates.

With a stock sale, they buy your corporate equity instead. If you've held it for over a year, that gain qualifies for long-term capital gains rates, capping the federal hit at 20% plus the 3.8% net investment income tax.

If a buyer forces an asset sale to get their deductions, you can counter by calculating a tax "gross-up." This forces them to raise the purchase price by the exact amount needed to make sure your net, after-tax payout matches what you would have kept in a stock sale.

𝘋𝘰𝘦𝘴 𝘺𝘰𝘶𝘳 𝘤𝘶𝘳𝘳𝘦𝘯𝘵 𝘣𝘶𝘴𝘪𝘯𝘦𝘴𝘴 𝘴𝘦𝘵𝘶𝘱 𝘧𝘢𝘷𝘰𝘳 𝘢𝘯 𝘢𝘴𝘴𝘦𝘵 𝘴𝘢𝘭𝘦 𝘰𝘳 𝘢 𝘴𝘵𝘰𝘤𝘬 𝘴𝘢𝘭𝘦? ... See MoreSee Less