Tax Posts

Tax Tips and Traps for Settlement Funds and Settlement Agreements

Taxes: the one word everyone tries to avoid. But when negotiating a class action settlement and drafting a settlement agreement, not considering the effects taxes have on the fund or on the class member recipients can prove to be disastrous. Is your fund really a Qualified Settlement Fund? The Tax Reform Act of 1986 (the Act) made it clear that any fund created as part of a settlement was a taxable entity subject to income tax. The Act even created a…

Know These Tax Deadlines for Individuals and Businesses Before April 15

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Tax day is Monday, April 15, but there are several deadlines ahead of it that both individuals and businesses should be aware of. Download our 2019 deadline reminder to keep everything straight. 2019 Tax Deadlines January 31 — All Businesses  Give your employees their copies of Form W-2 for 2018. If an employee agreed to receive Form W-2 electronically, have it posted on a website and notify the employee of the posting.  February 28 — All businesses  File information returns (for example, Forms 1099)…

7 Year-End Tax Planning Tips for 2018

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Tax law changes resulting from the Tax Cut and Jobs Act (TCJA), the most significant tax changes we’ve seen since the Tax Reform Act of 1986, are in effect. The new reform impacts all kinds of taxes – individual, corporate, partnership and other “pass through” business entities, estate, and even tax-exempt organizations. For some, deductions are going away or changing, and for others, investment opportunities are more attractive. Here are some tips that may reduce your tax burden. Contribute to your retirement account The…

New Investment Opportunity through the Tax Cuts and Jobs Act for Attorneys

New Investment Opportunity through the Tax Cuts and Jobs Act for Attorneys

Do you have a large capitol gain and want the ability to defer your taxes and grow your investment? If so, the Opportunity Zone Tax Initiative is something you should consider. The Tax Cuts and Jobs Act created a new avenue for community investment with the Opportunity Zone Tax Initiative. The initiative aims to spark economic recovery in targeted areas of the country. Investors with unrealized capital gains can defer payment of gains, reduce what they owe, and pay zero tax…

Pitfalls of the Improper Election of Qualified Settlement Funds

Pitfalls of the Improper Election of Qualified Settlement Funds

The qualified settlement fund (QSF) – a common vehicle used by plaintiff and defense attorneys – is governed by section 468B of the Internal Revenue Code (IRC). The Tax Reform Act of 1986 created the qualified settlement fund in response to questions surrounding the income tax treatment of settlement funds, and defendant’s issues related to when a tax deduction for payments made into a settlement fund could be taken.  A QSF operates as a tax-free holding point used when determining who receives what amount from the settlement. It’s…