There’s a valuable tax deduction available to a C corporation when it receives dividends. The “dividends-received deduction” has a design to reduce or eliminate an extra level of tax on dividends received by a corporation. As a result, a corporation will typically receive taxation at a lower rate on dividends than on capital gains. Ordinarily, […]
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Here’s an interesting option if your small company or start-up business is planning to claim the research tax credit. You can elect to apply all or some of any research tax credits that you earn against your payroll taxes instead of your income tax. This payroll tax election may influence some businesses to undertake or […]
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A new requirement to submit new hire information for independent contractors has been passed in the State of Florida. Now, businesses must submit new hire information for their independent contractors to the Florida Department of Revenue. This is a significant change for businesses as previously reporting of independent contractors by a business was optional. Background […]
If you own your own company and travel for business, you may wonder whether you can deduct the costs of having your spouse accompany you on trips. The rules for deducting a spouse’s travel costs are very restrictive. First of all, to qualify, your spouse must be your employee. This means you can’t deduct the […]
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It is difficult to determine which expenses to claim on tax returns. While some businesses have closed since the start of the COVID-19 crisis, many new ventures have launched. Entrepreneurs have cited a number of reasons why they decided to start a business in the midst of a pandemic. For example, they have more time, […]
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Many tax limits that affect businesses are annually indexed for inflation, and a number of them have increased for 2022. Here’s a rundown of those that may be important to you and your business. Social Security Tax The amount of an employee’s earnings that are subject to Social Security tax is capped for 2022 at […]
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If you’re an employer with a business where tipping is customary for providing food and beverages, you may qualify for a federal tax credit involving the Social Security and Medicaid (FICA) taxes that you pay on your employees’ tip income. Basics of the Credit The FICA credit applies with respect to tips that your employees […]
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After two years of no increases, the optional standard business mileage rate used to calculate the deductible cost of operating an automobile for business will be going up in 2022 by 2.5 cents per mile. The IRS recently announced that the cents-per-mile rate for the business use of a car, van, pickup, or panel truck […]
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Don’t let the holiday rush keep your small business from considering some important steps to reduce your 2021 tax liability. You still have time to execute a few strategies. Purchase Assets Thinking about buying new or used equipment, machinery, or office equipment in the new year? First, you must buy them and place them in […]
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With Thanksgiving just around the corner, the holiday season will soon be here. This time of year, your business may want to show its gratitude to employees and customers. Giving them gifts or hosting holiday parties after a year of forgoing them due to the pandemic can show them this gratitude. It’s a good time […]
Has your business experienced depreciation? Is your business depreciating over a 30-year period the entire cost of constructing the building that houses your operation? If so, you should consider a cost segregation study. It might allow you to accelerate depreciation deductions on certain items, thereby reducing taxes and boosting cash flow. Under current law, the […]
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Are employees at your business traveling again after months of virtual meetings? In Notice 2021-52, the IRS announced the fiscal 2022 “per diem” rates that became effective October 1, 2021. Taxpayers can use these rates to substantiate the amount of expenses for lodging, meals, and incidental expenses when traveling away from home. (Taxpayers in the transportation […]
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Here are some of the key Q4 tax-related deadlines affecting businesses and other employers during the fourth quarter of 2021. To clarify, keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. In addition, contact us to ensure you’re meeting all applicable deadlines and to learn more […]
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Are you currently involved with a merger and acquisition (M&A) transaction? Low-interest rates and other factors have caused global merger and acquisition activity to reach new highs in 2021. Refinitiv, a provider of financial data reports that 2021 is set to be the biggest in M&A history, with the United States accounting for $2.14 trillion […]
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The week of September 13-17 has been declared National Small Business Week by the Small Business Administration. To commemorate the week, here are three tax breaks to consider. 1. Claim Bonus Depreciation or a Section 179 Deduction for Asset Additions Under current law, 100% first-year bonus depreciation is available for qualified new and used property […]
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A business may be able to claim a federal income tax deduction for a theft loss. But does embezzlement count as theft? In most cases it does but you’ll have to substantiate the loss. A recent U.S. Tax Court decision illustrates how that’s sometimes difficult to do. Basic Rules for Theft Losses The tax code […]
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How does the IRS prepare for a business audit? Generally, an IRS examiner does research about the specific industry and issues on the taxpayer’s return. Examiners may use IRS “Audit Techniques Guides (ATGs).” A little-known secret is that these guides are available to the public on the IRS website. In other words, your business can […]
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If you’re a business owner and you’re getting a divorce, tax issues can complicate matters. Your business ownership interest is one of your biggest personal assets and in many cases, your marital property will include all or part of it. Tax-Free Property Transfers You can generally divide most assets, including cash and business ownership interests, […]
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Is a limited liability company (LLC) the right choice for your small business? Perhaps you operate your small business as a sole proprietorship and want to form an LLC to protect your assets. Or, maybe you are launching a new business and want to know your options for setting it up. An LLC is somewhat […]
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It is often difficult to determine the deductibility of corporate expenses covered by officers or shareholders. Do you play a major role in a closely held corporation and sometimes spend money on corporate expenses personally? These costs may wind up being non-deductible both by an officer and the corporation unless proper steps are taken. This […]
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Despite the COVID-19 pandemic, government officials are seeing a large increase in the number of new businesses being launched. From June 2020 through June 2021, the U.S. Census Bureau reports that business applications are up 18.6%. The Bureau measures this by the number of businesses applying for an Employer Identification Number. Entrepreneurs often don’t know […]
Do you own or manage a business with employees? There’s a harsh tax penalty that you could be at risk for paying personally. It’s called the “Trust Fund Recovery Penalty.” This penalty applies to the Social Security and income taxes required to be withheld by a business from its employees’ wages. Because taxes are considered […]
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The Employee Retention Tax Credit (ERTC) is a valuable tax break. It was extended and modified by the American Rescue Plan Act (ARPA). The ERTC was enacted in March of 2021. Here’s a rundown of the rules. Background Back in March of 2020, Congress originally enacted the ERTC in the CARES Act to encourage employers […]
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As we continue to come out of the COVID-19 pandemic, you may be traveling again for business. There are a number of rules for deducting the cost of your out-of-town business travel within the United States. These rules apply if the business conducted out of town reasonably requires an overnight stay. Under the Tax Cuts […]
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Stay up to date with the 2021 Q3 tax calendar! Here are some of the key tax-related deadlines affecting businesses and other employers during the third quarter of 2021. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. Certainly contact us to ensure you’re meeting all […]
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Do you know the DOs and DON’Ts of recordkeeping? If you’re claiming deductions for business meals or auto expenses, expect the IRS to closely review them. In some cases, taxpayers have incomplete documentation or try to create records months (or years) later. In doing so, they fail to meet the strict substantiation requirements set forth […]
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Are you a business owner looking to hire your children this summer? Did you know you can obtain tax breaks and other nontax benefits? The children can gain on-the-job experience, spend time with you, save for college and learn how to manage money. And you may be able to: Shift your high-taxed income into tax-free […]
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The IRS recently released guidance providing the 2022 inflation-adjusted amounts for Health Savings Accounts. Fundamentals of HSAs What is a Health Savings Account (HSA)? It is a trust created or organized exclusively for the purpose of paying the “qualified medical expenses” of an “account beneficiary.” It can only be established for the benefit of an […]
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Is your business organized as a sole proprietorship or as a wholly-owned limited liability company (LLC)? Then you are subject to both income tax and self-employment tax. There may be a way to cut your tax bill by conducting business as an S corporation. Fundamentals of Self-Employment Tax The self-employment tax is imposed on 92.35% […]
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Many businesses use independent contractors to help keep their costs down. If you’re among them, make sure that these workers are properly classified for federal tax purposes. If the IRS reclassifies them as employees, it can be a costly error. It can be complex to determine whether a worker is an independent contractor or an […]
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Many businesses provide education fringe benefits so their employees can improve their skills and gain additional knowledge. An employee can receive, on a tax-free basis, up to $5,250 each year from his or her employer for educational assistance under a “qualified educational assistance program.” For this purpose, “education” means any form of instruction or training […]
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Are you wondering whether alternative energy technologies can help you manage energy costs in your business? If so, there’s a valuable federal income tax benefit (the business energy credit) that applies to the acquisition of many types of alternative energy property. The credit is intended primarily for business users of alternative energy (other energy tax […]
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Owners of incorporated businesses know that there’s a tax advantage to taking money out of a C corporation as compensation rather than as dividends. The reason? A corporation can deduct the salaries and bonuses that it pays executives, but not dividend payments. Thus, if funds are paid as dividends, they’re taxed twice, once to the […]
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Are you thinking about setting up a retirement plan for yourself and your employees? Are you worried about the financial commitment and administrative burdens involved in providing a traditional pension plan? In short, there are two options to consider: “simplified employee pension” (SEP) “savings incentive match plan for employees” (SIMPLE) SEPs are intended as an […]
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Recently, the Paycheck Protection Program Flexibility Act (PPPFA), was signed into law. This gives borrowers additional time and flexibility to use Paycheck Protection Program (PPP) loan proceeds. The PPPFA is intended to serve as an additional boost for small businesses trying to muscle through this pandemic-induced economic crisis. Continue reading to see how your business […]
In response to uncertainties surrounding COVID-19, the Financial Accounting Standards Board (FASB) voted on Wednesday, May 20, 2020, to extend the effective date for certain Accounting Standards Updates (ASU). Following is a summary of the FASB’s actions from that meeting. Revenue Recognition ASU The effective date of the FASB revenue recognition ASU has been extended […]
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Borrowers can be eligible for loan forgiveness for eligible payroll costs and eligible nonpayroll costs through the Payroll Protection Program (PPP). Borrowers are generally eligible for forgiveness for the payroll costs paid and payroll costs incurred during the eight week (56-day) covered period. Payroll costs are considered paid on the day that paychecks are distributed, […]
Additional answers have been posted by the SBA pertaining to the Payroll Protection Program (PPP) payroll costs. Here is a sample of questions and answers that have been posted. Do PPP loans cover paid sick leave under payroll costs? What period of time should borrowers use to determine their number of employees and payroll costs […]
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Today, United States Senator Marco Rubio (R-FL) held a town hall on the Paycheck Protection Program (PPP) loan forgiveness process. The town hall was held with the Florida Institute of Certified Public Accounts’ (FICPA) leadership and board. During the town hall, the Senator discussed specific federal responses to the ongoing COVID-19 pandemic. The topic included details […]
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Business owners are wondering if their Paycheck Protection Program (PPP) loan will affect their deductions when they file their tax returns and what portions of the loan will be deductible. Here is an update from our COVID-19 team leaders on this issue. Late yesterday evening, the IRS released guidance regarding the deductibility of certain expenses businesses […]
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