• Understanding the passive activity loss rules

    Are you wondering if the passive activity loss rules affect business ventures you’re engaged in — or might engage in? If the ventures are passive activities, the passive activity loss rules prevent you from deducting expenses that are generated by them in excess of their income. You can’t deduct the excess expenses (losses) against earned income or against other nonpassive income. Nonpassive income for this [...]

    Published On: November 3, 2020Categories: Featured, Small Business Tax
  • The easiest way to survive an IRS audit is to get ready in advance

    IRS audit rates are historically low, according to the latest data, but that’s little consolation if your return is among those selected to be examined. But with proper preparation and planning, you should fare well. In fiscal year 2019, the IRS audited approximately 0.4% of individuals. Businesses, large corporations and high-income individuals are more likely to be audited but, overall, all types of audits are [...]

    Published On: October 15, 2020Categories: Featured, Small Business Tax
  • The tax rules for deducting the computer software costs of your business

    Do you buy or lease computer software to use in your business? Do you develop computer software for use in your business, or for sale or lease to others? Then you should be aware of the complex rules that apply to determine the tax treatment of the expenses of buying, leasing or developing computer software. Purchased software Some software costs are deemed to be costs [...]

    Published On: October 2, 2020Categories: Featured, Small Business Tax
  • Business website costs: How to handle them for tax purposes

    The business use of websites is widespread. But surprisingly, the IRS hasn’t yet issued formal guidance on when Internet website costs can be deducted. Fortunately, established rules that generally apply to the deductibility of business costs, and IRS guidance that applies to software costs, provide business taxpayers launching a website with some guidance as to the proper treatment of the costs. Hardware or software? Let’s [...]

    Published On: October 1, 2020Categories: Featured, Small Business Tax
  • 2020 Q4 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 fourth quarter of 2020. 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. Thursday, October 15 If a calendar-year C corporation that filed an automatic [...]

    Published On: September 19, 2020Categories: Featured, Small Business Tax
  • Employers have questions and concerns about deferring employees’ Social Security taxes

    The IRS has provided guidance to employers regarding the recent presidential action to allow employers to defer the withholding, deposit and payment of certain payroll tax obligations. The three-page guidance in Notice 2020-65 was issued to implement President Trump’s executive memorandum signed on August 8. Private employers still have questions and concerns about whether, and how, to implement the optional deferral. The President’s action only defers [...]

    Published On: September 18, 2020Categories: Featured, Small Business Tax
  • 5 key points about bonus depreciation

    Under current law, 100% bonus depreciation will be phased out in steps for property placed in service in calendar years 2023 through 2027. Thus, an 80% rate will apply to property placed in service in 2023, 60% in 2024, 40% in 2025, and 20% in 2026, and a 0% rate will apply in 2027 and later years. For certain aircraft (generally, company planes) and for [...]

    Published On: September 4, 2020Categories: Featured, Small Business Tax
  • CARES Act made changes to excess business losses

    The Coronavirus Aid, Relief and Economic Security (CARES) Act made changes to excess business losses. This includes some changes that are retroactive and there may be opportunities for some businesses to file amended tax returns. If you hold an interest in a business, or may do so in the future, here is more information about the changes. Deferral of the excess business loss limits The [...]

    Published On: September 3, 2020Categories: Featured, Small Business Tax
  • The possible tax consequences of PPP loans

    If your business was fortunate enough to get a Paycheck Protection Program (PPP) loan taken out in connection with the COVID-19 crisis, you should be aware of the potential tax implications. PPP basics The Coronavirus Aid, Relief and Economic Security (CARES) Act, which was enacted on March 27, 2020, is designed to provide financial assistance to Americans suffering during the COVID-19 pandemic. The CARES Act [...]

    Published On: August 22, 2020Categories: Featured, Small Business Tax
  • The President’s action to defer payroll taxes: What does it mean for your business?

    On August 8, President Trump signed four executive actions, including a Presidential Memorandum to defer the employee’s portion of Social Security taxes for some people. These actions were taken in an effort to offer more relief due to the COVID-19 pandemic. The action only defers the taxes, which means they’ll have to be paid in the future. However, the action directs the U.S. Treasury Secretary to “explore [...]

    Published On: August 17, 2020Categories: Featured, Small Business Tax
  • File cash transaction reports for your business — on paper or electronically

    Does your business receive large amounts of cash or cash equivalents? You may be required to submit forms to the IRS to report these transactions. Filing requirements Each person engaged in a trade or business who, in the course of operating, receives more than $10,000 in cash in one transaction, or in two or more related transactions, must file Form 8300. Any transactions conducted in [...]

    Published On: August 9, 2020Categories: Featured, Small Business Tax
  • Why do partners sometimes report more income on tax returns than they receive in cash?

    If you’re a partner in a business, you may have come across a situation that gave you pause. In a given year, you may be taxed on more partnership income than was distributed to you from the partnership in which you’re a partner. Why is this? The answer lies in the way partnerships and partners are taxed. Unlike regular corporations, partnerships aren’t subject to income [...]

    Published On: August 8, 2020Categories: Featured, Small Business Tax
  • Even if no money changes hands, bartering is a taxable transaction

    During the COVID-19 pandemic, many small businesses are strapped for cash. They may find it beneficial to barter for goods and services instead of paying cash for them. If your business gets involved in bartering, remember that the fair market value of goods that you receive in bartering is taxable income. And if you exchange services with another business, the transaction results in taxable income [...]

    Published On: July 24, 2020Categories: Featured, Small Business Tax
  • Businesses: Get ready for the new Form 1099-NEC

    There’s a new IRS form for business taxpayers that pay or receive nonemployee compensation. Beginning with tax year 2020, payers must complete Form 1099-NEC, Nonemployee Compensation, to report any payment of $600 or more to a payee. Why the new form? Prior to 2020, Form 1099-MISC was filed to report payments totaling at least $600 in a calendar year for services performed in a trade [...]

    Published On: July 18, 2020Categories: Featured, Small Business Tax