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What’s the best accounting method route for business tax purposes?
February 12, 2024
Categories: #hh, Small business, TCJA
Businesses basically have two accounting methods to figure their taxable income: cash and accrual. Many businesses have a choice of which method to use for tax purposes. The cash method often provides significant tax benefits for eligible businesses, though some may be better off using the accrual method. Thus, it may be prudent for your business to evaluate its method to ensure that it’s the most advantageous approach. Eligibility to use the cash method “Small businesses,”
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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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Tax-favored Qualified Small Business Corporation status could help you thrive
January 24, 2024
Categories: #hh, QSBC, section 1202, Small business, Stock awards
Operating your small business as a Qualified Small Business Corporation (QSBC) could be a tax-wise idea. Tax-free treatment for eligible stock gains QSBCs are the same as garden-variety C corporations for tax and legal purposes — except QSBC shareholders are potentially eligible to exclude from federal income tax 100% of their stock sale gains. That translates into a 0% federal income tax rate on QSBC stock sale profits! However, you must meet several requirements set forth in Section
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Spouse-run businesses face special tax issues
September 12, 2023
Categories: #hh, Partnership, Scorp, Self Employment, Small business
Do you and your spouse together operate a profitable unincorporated small business? If so, you face some challenging tax issues. The partnership issue An unincorporated business with your spouse is classified as a partnership for federal income tax purposes, unless you can avoid that treatment. Otherwise, you must file an annual partnership return, on Form 1065. In addition, you and your spouse must be issued separate Schedule K-1s, which allocate the partnership’s taxable income, deductions