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Tax Newsletter – August 2016

The HoganTaylor LLP Tax Team is excited to present the August 2016 edition of our eNewsletter. Our newsletter is designed to help you keep up with the latest tax issues.

We’ve designed the newsletter to be read in quick chunks–knowing that leisurely reading time is a luxury for most of you. We’ll also always have the content on our site so that you can refer to it later.

As always, please do not hesitate to contact a member of the HoganTaylor Tax Team with any questions you may have regarding these subjects. Additionally, we welcome any thoughts or ideas you may have for future newsletter topics.

In This Issue:

The True Cost of Higher Education

The College Board reports that full-time students at private institutions typically paid almost $44,000 for tuition, fees, room and board during the 2015-2016 academic year. That’s the average, so costs at some private colleges and universities were well over $50,000 per year. Higher education at public schools was much less expensive, but in-state students still spent nearly $20,000 for tuition, fees, room and board, on average. All college costs continue to rise, so younger students probably will pay even more when they arrive on campus.

Now for the good news. Read More

Make the Most of College Financial Aid

As the first article of this issue of the HoganTaylor Tax Newsletter notes, the net price of higher education will depend on the amount of financial aid that’s received. The greater the financial aid, the lower the net cost of college. Read More

Campus Tax Credits Can Top Tax Deductions

Besides financial aid, specific tax benefits can reduce the net cost of sending a child to college. Among the three major tax breaks—American Opportunity Tax Credit, Lifetime Learning Credit, tuition and fees deduction—you can claim only one on your tax return. Read More

The Second Best Investment You Can Make

Many companies offer 401(k) or similar retirement plans to their employees, and an employer match might be available. If that’s the case, you should contribute to the plan at least enough to get the full match. Read More

Using IRA Money to Buy a Business Can Be Dangerous

Business owners may need capital to support growth, and the money in their IRA can be tempting. Nevertheless, the pitfalls can be steep, as illustrated in a recent Tax Court case (Thiessen v. Commissioner, 146 T.C. No. 7 [3/29/16]). Here, the court ruled that because a married couple had entered into prohibited transactions with respect to their IRAs, the assets in the IRAs were deemed to have been distributed, resulting in a huge tax bill. Read More

Applicable Federal Rates for August

The Section 7520 rate for August 2016 is 1.4%, while the Applicable Federal Rates (AFRs) are as follows (Rev. Rul. 2016-18, 2016-31 IRB). Read More

Tax Calendar

Find out what tax deadlines are approaching in September of 2016. Read More