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You don’t have to be in business to deduct certain vehicle expenses
October 30, 2024
Categories: mileage, TCJA, Vehicles
When you think about tax deductions for vehicle-related expenses, business driving may come to mind. However, businesses aren’t the only taxpayers that can deduct driving expenses on their returns. Individuals may also be able to deduct them in certain circumstances. Unfortunately, under current law, you may be unable to deduct as much as you could years ago. How the TCJA changed deductions For years before 2018, miles driven for business, moving, medical and charitable purposes were
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Is your money-losing activity a hobby or a business?
October 16, 2024
Categories: Small business, TCJA
Let’s say you have an unincorporated sideline activity that you consider a business. Perhaps you offer photography services, create custom artwork or sell handmade items online. Will the IRS agree that your venture is a business, not a hobby? It’s an essential question for tax purposes. If the expenses from an activity exceed the revenues, you have a net loss. You may think you can deduct that loss on your personal federal income tax return with no questions asked. Not so fast! The
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Cash or accrual accounting: What’s best for tax purposes?
September 11, 2024
Categories: GAAP, Small business, TCJA
Your businesses may have a choice between using the cash or accrual method of accounting for tax purposes. The cash method often provides significant tax benefits for those that qualify. However, some businesses may be better off using the accrual method. Therefore, you need to evaluate the tax accounting method for your business to ensure that it’s the most beneficial approach. The current situation “Small businesses,” as defined by the tax code, are generally eligible to
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The possible tax landscape for businesses in the future
September 3, 2024
Categories: QBI, Section 199A, TCJA
Get ready: The upcoming presidential and congressional elections may significantly alter the tax landscape for businesses in the United States. The reason has to do with a tax law that’s scheduled to expire in about 17 months and how politicians in Washington would like to handle it. How we got here The Tax Cuts and Jobs Act (TCJA), which generally took effect in 2018, made extensive changes to small business taxes. Many of its provisions are set to expire on December 31, 2025. As
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When do valuable gifts to charity require an appraisal?
July 23, 2024
Categories: Appraisal, charitable giving, Form 8283, Itemized deductions, TCJA
If you donate valuable items to charity and you want to deduct them on your tax return, you may be required to get an appraisal. The IRS requires donors and charitable organizations to supply certain information to prove their right to deduct charitable contributions. How can you protect your deduction? First, be aware that in order to deduct charitable donations, you must itemize deductions. Due to today’s relatively high standard deduction amounts, fewer taxpayers are itemizing deductions
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The tax advantages of including debt in a C corporation capital structure
July 18, 2024
Categories: C Corp, Shareholder, Tax rates, TCJA
Let’s say you plan to use a C corporation to operate a newly acquired business or you have an existing C corporation that needs more capital. You should know that the federal tax code treats corporate debt more favorably than corporate equity. So for shareholders of closely held C corporations, it can be a tax-smart move to include in the corporation’s capital structure: Some third-party debt (owed to outside lenders), and/or Some owner debt. Tax rate considerations Let’s
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The tax advantages of including debt in a C corporation capital structure
July 11, 2024
Categories: C Corp, double taxation, Shareholder, Tax rates, TCJA
Let’s say you plan to use a C corporation to operate a newly acquired business or you have an existing C corporation that needs more capital. You should know that the federal tax code treats corporate debt more favorably than corporate equity. So for shareholders of closely held C corporations, it can be a tax-smart move to include in the corporation’s capital structure: Some third-party debt (owed to outside lenders), and/or Some owner debt. Tax rate considerations Let’s
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What might be ahead as many tax provisions are scheduled to expire?
July 2, 2024
Categories: Itemized deductions, QBI, SALT, Section 199A, TCJA
Buckle up, America: Major tax changes are on the horizon. The reason has to do with tax law and the upcoming elections. Our current situation The Tax Cuts and Jobs Act (TCJA), which generally took effect in 2018, made sweeping changes. Many of its provisions are set to expire on December 31, 2025. With this date getting closer each day, you may wonder how your federal tax bill will be affected in 2026. The answer isn’t clear because the outcome of this November’s presidential
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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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A cost segregation study may cut taxes and boost cash flow
November 14, 2023
Categories: Business, Cost, cost segregation, Depreciation, TCJA
Is your business depreciating over 30 years the entire cost of constructing the building that houses your enterprise? If so, you should consider a cost segregation study. It may allow you to accelerate depreciation deductions on certain items, thereby reducing taxes and boosting cash flow. Depreciation basics Business buildings generally have a 39-year depreciation period (27.5 years for residential rental properties). In most cases, a business depreciates a building’s structural components,