These days, most businesses have websites. But surprisingly, the IRS hasn’t issued formal guidance on when website costs can be deducted. Fortunately, established rules that generally apply to the deductibility of business costs provide business taxpayers launching a website with some guidance as to the proper treatment of the costs. Plus, businesses can turn to […]
Three Tax Breaks for Small Businesses
Your small- or medium-sized business may be eligible for some tax breaks that aren’t available to larger businesses. Here are some examples. 1. QBI deduction For 2018 through 2025, the qualified business income (QBI) deduction is available to eligible individuals, trusts, and estates. It excludes C corporations or their shareholders. The QBI deduction can be […]
Important Considerations when Engaging in a Like-Kind Exchange
A business or individual can dispose of appreciated real property without being taxed on the gain by exchanging it. You can defer tax on your gain through a “like-kind” exchange or the Internal Revenue Code Section 1031. What’s a Like-Kind Exchange? A like-kind exchange is a swap of real property held for investment or for […]
Tax Obligations when a Business Closes its Doors
Has the ongoing pandemic put your business in a situation where you may have to close its doors? If your business closes its doors, we can assist you during this transition. A business must file a final income tax return and some other related forms for the year it closes its doors. The type of […]
How do taxes factor into an M&A transaction?
Is your business considering an M&A transaction and wondering how it will affect your taxes? Although merger and acquisition (M&A) activity has been down in 2022, companies are still being bought and sold. It’s important to understand how the transaction will be taxed under current law. Here are some tips. Stocks vs. Assets From a […]
2022 Q3 Tax Calendar: Key Deadlines for Businesses and Other Employers
Here are some of the key tax-related deadlines affecting businesses and other employers during the third quarter of 2022. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. Contact us to ensure you’re meeting all applicable deadlines and to learn more about the filing requirements. August […]
Businesses Will Soon Be Able to Deduct More Under The Standard Mileage Rate
Business owners are aware that the price of gas is historically high, which has made their vehicle costs soar. The average nationwide price of a gallon of unleaded regular gas on June 17 was $5, compared with $3.08 a year earlier, according to the AAA Gas Prices website. A gallon of diesel averaged $5.78 a […]
Is Your Corporation Eligible For The Dividends-Received Deduction?
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, […]
Can You Deduct the Costs of a Spouse on a Business Trip?
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 […]
Entrepreneurs and Taxes: How Expenses are Claimed on Tax Returns
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, […]
Numerous Tax Limits Affecting Businesses have Increased for 2022
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 […]
Businesses with Employees Who Receive Tips may be Eligible for a Tax Credit
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 […]
Will the Standard Business Mileage Rate Go Up in 2022? Yes!
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 […]
There Still May be Time for Your Small Business to Cut 2021 Taxes
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 […]
Businesses Can Show Appreciation — and Gain Tax Breaks — with Holiday Gifts and Parties
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 […]
Get Your Piece of the Depreciation Pie Now With a Cost Segregation Study
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 […]
New Per Diem Business Travel Rates Became Effective on October 1
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 […]
2021 Q4 Tax Calendar: Key Deadlines for Businesses and Other Employers
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 […]
Merger and Acquisition Transactions: Be Careful When Reporting to the IRS
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 […]
Tax Breaks to Consider During National Small Business Week
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 […]
Claiming a Theft Loss Deduction if Your Business is the Victim of Embezzlement
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 […]
Want to Find Out What IRS Auditors Know About Your Business Industry?
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 […]
Getting a Divorce? Be Aware of Tax Implications if You Own a Business
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, […]
Is an LLC the Right Choice for Your Small Business?
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 […]
The Deductibility of Corporate Expenses Covered by Officers or Shareholders
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 […]
Getting a New Business Off The Ground: How Start-Up Expenses Are Handled On Your Tax Return
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 […]
Who in a Small Business Can Be Hit With the “Trust Fund Recovery Penalty?”
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 […]
Eligible Businesses: Claim the Employee Retention Tax Credit
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 […]
Traveling for Business Again? What Can You Deduct?
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 […]
2021 Q3 Tax Calendar: Key Deadlines for Businesses and Other Employers
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 […]
Recordkeeping DOs and DON’Ts for Business Meal and Vehicle Expenses
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 […]
Are You Hiring Your Children this Summer? Reap Tax and Nontax Benefits
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 […]
2022 Health Savings Accounts Amounts Announced
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 […]
An S Corporation Could Cut Your Self-Employment Tax
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% […]
Help Ensure the IRS Doesn’t Reclassify Independent Contractors as Employees
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 […]
Claiming the Business Energy Credit for Using Alternative Energy
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 […]
“Reasonable Compensation”: Know the Ins and Outs!
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 […]
Simple Retirement Savings Options for Your Business
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 […]
Paycheck Protection Program (PPP) Second Draw Q&A
In December, Congress passed a bill allotting $284 billion in new funding. The Paycheck Protection Program (PPP) Second Draw will provide the hardest-hit businesses a chance at a second loan. The PPP 2.0 makes other changes too, including eligibility and limits for some loan sizes. Dennis Gallant answers some commonly asked questions on the Second […]
Key Takeaways from the Second Round of the Paycheck Protection Program (PPP)
What are the key takeaways from the second round of the Paycheck Protection Program (PPP)? The Consolidated Appropriations Act (CAA) 2021 permits certain small businesses who received a Paycheck Protection Program (PPP) loan and experienced a 25% reduction in gross receipts to take a PPP Second Draw Loan of up to $2 million. Who is […]
