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Ways to manage the limit on the business interest expense deduction
March 27, 2025
Categories: Business Related Expenses, Deductions, Section 163(j), TCJA
Prior to the enactment of the Tax Cuts and Jobs Act (TCJA), businesses were able to claim a tax deduction for most business-related interest expense. The TCJA created Section 163(j), which generally limits deductions of business interest, with certain exceptions. If your business has significant interest expense, it’s important to understand the impact of the deduction limit on your tax bill. The good news is there may be ways to soften the tax bite in 2025. The nuts and bolts Unless
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Can I itemize deductions on my tax return?
March 14, 2025
Categories: Deductions, Itemized deductions, medical expense, Standard Deduction
You may wonder if you can claim itemized deductions on your tax return. Perhaps you made charitable contributions and were told in the past they couldn’t be claimed because you didn’t have enough deductions to itemize. How much do you need? You can itemize deductions if the total of your allowable itemized write-offs for the year exceeds your standard deduction allowance for the year. Otherwise, you must claim the standard deduction. Here’s how we’ll determine if you can
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Many business tax limits have increased in 2025
February 17, 2025
Categories: Business, Deductions, Flexible Spending Account, HSA, Retirement, Section 179, Social Security
A variety of tax-related limits that affect businesses are indexed annually based on inflation. Many have increased for 2025, but with inflation cooling, the increases aren’t as great as they have been in the last few years. Here are some amounts that may affect you and your business. 2025 deductions as compared with 2024 Section 179 expensing: Limit: $1.25 million (up from $1.22 million) Phaseout: $3.13 million (up from $3.05 million) Sec. 179 expensing limit for certain
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From flights to meals: A guide to business travel tax deductions
November 5, 2024
Categories: Deductions, expenses, tax deduction, Travel
As a business owner, you may travel to visit customers, attend conferences, check on vendors and for other purposes. Understanding which travel expenses are tax deductible can significantly affect your bottom line. Properly managing travel costs can help ensure compliance and maximize your tax savings. Your tax home Eligible taxpayers can deduct the ordinary and necessary expenses of business travel when away from their “tax homes.” Ordinary means common and accepted in the industry.
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9 tax considerations if you’re starting a business as a sole proprietor
February 8, 2024
Categories: #hh, Deductions, pass-through deduction, Schedule C, Self Employment, Small business, Sole proprietorship
When launching a small business, many entrepreneurs start out as sole proprietors. If you’re launching a venture as a sole proprietorship, you need to understand the tax issues involved. Here are nine considerations: 1. You may qualify for the pass-through deduction. To the extent your business generates qualified business income, you’re currently eligible to claim the 20% pass-through deduction, subject to limitations. The deduction is taken “below the line,” meaning
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4 ideas that may help reduce your 2023 tax bill
December 12, 2023
Categories: #hh, Deductions, Retirement, SEP-IRA
If you’re concerned about your 2023 tax bill, there may still be time to reduce it. Here are four quick strategies that may help you trim your taxes before year end. 1. Accelerate deductions and/or defer income. Certain tax deductions are claimed for the year of payment, such as the mortgage interest deduction. So, if you make your January 2024 payment in December, you can deduct the interest portion on your 2023 tax return (assuming you itemize). Pushing income into the new year
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There still may be time to reduce your small business 2023 tax bill
December 5, 2023
Categories: #hh, Deductions, Depreciation
In the midst of holiday parties and shopping for gifts, don’t forget to consider steps to cut the 2023 tax liability for your business. You still have time to take advantage of a few opportunities. Time deductions and income If your business operates on a cash basis, you can significantly affect your amount of taxable income by accelerating your deductions into 2023 and deferring income into 2024 (assuming you expect to be taxed at the same or a lower rate next year). For example,
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Key 2024 inflation-adjusted tax parameters for small businesses and their owners
November 21, 2023
Categories: C Corp, Deductions, Depreciation, Federal Income, LLC, LTCG, Partnership, Scorp, Tax Brackets
The IRS recently announced various inflation-adjusted federal income tax amounts. Here’s a rundown of the amounts that are most likely to affect small businesses and their owners. Rates and brackets If you run your business as a sole proprietorship or pass-through business entity (LLC, partnership or S corporation), the business’s net ordinary income from operations is passed through to you and reported on your personal Form 1040. You then pay the individual federal income tax rates
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Casualty loss tax deductions may help disaster victims in certain cases
October 4, 2023
Categories: #hh, casualty loss, Deductions, TCJA
This year, many Americans have been victimized by wildfires, severe storms, flooding, tornadoes and other disasters. No matter where you live, unexpected disasters may cause damage to your home or personal property. Before the Tax Cuts and Jobs Act (TCJA), eligible casualty loss victims could claim a deduction on their tax returns. But currently, there are restrictions that make these deductions harder to take. What’s considered a casualty for tax purposes? It’s a sudden, unexpected
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What types of expenses can’t be written off by your business?
October 4, 2023
Categories: Business, Deductions, write offs
If you read the Internal Revenue Code (and you probably don’t want to!), you may be surprised to find that most business deductions aren’t specifically listed. For example, the tax law doesn’t explicitly state that you can deduct office supplies and certain other expenses. Some expenses are detailed in the tax code, but the general rule is contained in the first sentence of Section 162, which states you can write off “all the ordinary and necessary expenses paid or incurred