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Rental Expense Deductions

2019 – 01/03 The U.S. Tax Court denied a taxpayer’s deductions for rental expenses (mortgage interest and depreciation deductions) and legal and professional fees. It found that the taxpayer’s evidence didn’t support the claimed deductions, but seemed largely connected to her son’s divorce proceedings. Tax law allows a deduction for ordinary and necessary expenses related…

Is there still time to pay 2018 bonuses

There aren’t too many things businesses can do after a year ends to reduce tax liability for that year. However, you might be able to pay employee bonuses for 2018 in 2019 and still deduct them on your 2018 tax return. In certain circumstances, businesses can deduct bonuses employees have earned during a tax year…

Economic damages: Recovering what was lost

A business can suffer economic damages arising from a variety of illegal conduct. Common examples include breach of contract, patent infringement and commercial negligence. If your company finds itself headed to court looking to recover lost profits, diminished business value or both, it’s important to know how the damages might be determined. What methods are…

10% Tax on Early Distribution

2018- 12/26 Under the tax code, there’s a 10% additional tax on early distributions from an IRA taken before age 59 ½. However, it doesn’t apply to certain distributions, including those used for qualified education expenses. In one case, a taxpayer received $25,622 in early distributions from two IRAs. The IRS determined they were taxable…

2018 Estimated Tax Payment Due

2019 – 01/02 Will you owe federal income tax for 2018? It’s not too late to make an estimated payment and avoid penalties. The 2018 fourth quarter tax payment deadline is Tuesday, 1/15/19. The IRS notes that “various financial transactions, especially those occurring late in the year, can often have an unexpected tax impact.” For…

4Q Employment Tax Return Due

Attention employers! The 2018 fourth quarter employment tax return is due Thursday, 1/31/19. That’s the Form 941 (“Employer’s Quarterly Federal Tax Return”), which summarizes the total wages you paid during the quarter, and the total federal employment taxes due. If your tax bill is less than $2,500 you can pay it, in full, with a…

Do your long-term customers know everything about you?

A technician at a mobility equipment supplier was servicing the motorized wheelchair of a long-time customer and noticed it was a brand-new model. “Where did you buy the chair?” he asked the customer. “At the health care supply store on the other side of town,” the customer replied. The technician paused and then asked, “Well,…

Do your long-term customers know everything about you?

A technician at a mobility equipment supplier was servicing the motorized wheelchair of a long-time customer and noticed it was a brand-new model. “Where did you buy the chair?” he asked the customer. “At the health care supply store on the other side of town,” the customer replied. The technician paused and then asked, “Well,…

Exit Strategy and Tax Planning

Tax planning is a juggling act for business owners. You have to keep your eye on your company’s income and expenses and applicable tax breaks (especially if you own a pass-through entity). But you also must look out for your own financial future. For example, you need to develop an exit strategy so that taxes…

Stock-based Compensation

2018 – 12/10 The IRS has provided guidance on a new deferral option for certain stock-based compensation. The option was added by the Tax Cuts and Jobs Act. It allows qualified employees of privately held corporations to defer paying income tax for up to 5 years on the value of qualified stock options and restricted…

2019 Standard Mileage Rates

2018 – 12/17 The IRS announced the 2019 standard mileage rates. The optional mileage allowance for owned or leased vehicles (including autos, vans or pickups) will rise 1 cent to 58 cents per mile for business travel. Employers can also use the rate to reimburse employees who supply their own autos for business use and…

Getting ahead of the curve on emerging technologies

Turn on your computer or mobile device, scroll through Facebook or Twitter, or skim a business-oriented website, and you’ll likely come across the term “emerging technologies.” It has become so ubiquitous that you might be tempted to ignore it and move on to something else. That would be a mistake. In today’s competitive business landscape,…

6 last-minute tax moves for your business

Tax planning is a year-round activity, but there are still some year-end strategies you can use to lower your 2018 tax bill. Here are six last-minute tax moves business owners should consider: Postpone invoices. If your business uses the cash method of accounting, and it would benefit from deferring income to next year, wait until…

Sole Proprietorship Schedule C Instructions

2018 – 12/05 If you’re the owner of a sole proprietorship, listen up! Newly released instructions for Schedule C, Form 1040, reflect many of the key tax changes that apply to sole proprietors for tax year 2018. These changes, enacted by the Tax Cuts and Jobs Act, include accounting method liberalizations, limitations on deductions for…

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