Small Business Tax Strategic Insights
Real Estate Investor vs Dealer-Huge Difference!
I have great news! You can have in your real estate portfolio both investor and dealer properties. This distinction is significant for tax purposes. Here’s a snapshot of the potential tax differences: Suppose you profit $90,000 from a property sale: As a dealer, ... (continued)
Business Meals Revisited
I hope this message finds you well. I am writing to provide valuable insights regarding the tax implications of business meals. As you may already be aware, there is a contradiction in the tax laws regarding personal living expenses, specifically personal meals and business meal ... (continued)
HSA-Why Some Business Prefer These Vehicles
When enacted, the Affordable Care Act (ACA) eliminated most small business health plans that reimbursed individually purchased health insurance. Consequently, many small business owners chose health savings accounts (HSAs) or opted to provide no health coverage at all. As of 2022, over 35 million HSAs ... (continued)
ICHRA A Potential Health Care Solution
The individual coverage health reimbursement arrangement (ICHRA) allows businesses of all sizes, from large corporations to small businesses like yours, to reimburse employees for their personally purchased health insurance expenses. The ICHRA is particularly beneficial for businesses with fewer than 50 employees because they ... (continued)
Rollover Your IRA to a Health Savings Account (HSA)-YES!!
Health Savings Accounts (HSAs) are designed for use alongside high-deductible health plans, assisting you in covering your medical expenses. They can also function as an incredible retirement account due to their triple tax benefit: You can deduct contributions from ... (continued)
Improper Use of the $75 Day Rule
The $75 rule applies to certain business expenses where you do not need a receipt. But I emphasize that this rule does not apply to all tax deductions. Many taxpayers mistakenly apply the $75 rule to all their tax deductions, which can result in a ... (continued)
90 Day Mileage Log Rule-Important!
Often in an IRS audit, the examiner will ask for your mileage log at the beginning of the audit. If you do not have a mileage log, you are in what former presidential candidate Ross Perot called deep doo-doo. Think about it. If you don’t ... (continued)
The Unpardonable Sin in an IRS Audit
What is the unpardonable sin in an IRS audit? Suppose you just received that lovely letter from the IRS telling you that you are the subject of an IRS audit. What one record receives special attention? What one record can create a nightmare for you? What ... (continued)
Tax Planning Strategies To Reduce Self Employment Tax
What happens when lawmakers enact a new tax? It starts small. It looks easy. In 1935, the self-employment tax topped out at $60. Those 1935 lawmakers must be twirling in their graves with the new rules for 2021, which levy the following taxes: A self-employment tax of up ... (continued)
Do NOT Embezzle Payroll Tax Withholding From Your Employees-Here's Why!
If you have employees in your business, this story should have your attention. Timothy McCloskey, president and sole shareholder of Brosius, delegated financial responsibility to Kathleen Lawson, his bookkeeper and chief financial officer. Ms. Lawson embezzled more than $800,000 from Brosius and failed to remit ... (continued)
More on Employee Retention Credit (ERC)
When Congress passed the CARES Act in March 2020, most businesses took advantage of the Paycheck Protection Program (PPP) loan; Congress also authorized a second option for employers--the ERC, a fully refundable credit against the business\'s payroll tax liabilities.Initially, employers had to chose between ... (continued)
Tax Planning Strategies To Reduce Self Employment Tax
What happens when lawmakers enact a new tax? It starts small. It looks easy. In 1935, the self-employment tax topped out at $60. Those 1935 lawmakers must be twirling in their graves with the new rules for 2021, which levy the following taxes: A self-employment tax of up ... (continued)
Need to Hire Workers-Work Opportunity TAX Credit
The Work Opportunity Tax Credit rewards your good deeds. And now, because of new legislation, the rules are in place for longer than usual. If you need to hire workers in your business, this dollar-for-dollar reducer of your taxes is one to know about. Suppose ... (continued)
Small Employer's Health Reimbursement Plan (QSEHRA)-Assist Your Employees!
Finally, the health insurance rules that apply to small businesses make more sense and allow some benefits. Beginning January 1, 2017, you can install a new qualified small employer health reimbursement arrangement (QSEHRA) and start helping your employees pay for their health insurance and other ... (continued)
Employer Retention Credit-Potential Example
With the Consolidated Appropriations Act, 2021, millions of small-business owners like you now qualify for the employee retention credit (ERC), thanks to three big changes: You can now obtain the ERC and the Paycheck Protection Program loan, but not ... (continued)
IRS Wrong on 1st & Last Stop Rule
Here’s a tax rule to know: if you have your principal office in your home, your trips from home to your first stop, and from your last stop to home, create deductible business mileage. Here’s high proof from IRS Revenue Ruling 99-7, conclusion paragraph 3, ... (continued)
All About LLCs
Limited liability companies (LLCs) are a popular choice of entity for small businesses and investment activities. LLC owners are called members. Single-member LLCs have one owner, although spouses who jointly own an LLC in a community property state can elect treatment as a single member LLC ... (continued)
Business Protection–Initial Considerations
The first consideration is structuring a sound asset protection plan is deciding which form of entity to operate your business. The possible choices include: General & limited Partnerships Sole Proprietorships Limited Liability Companies Corporations Trusts Each has different legal characteristics, tax attributes, an asset protection features. The right combination ... (continued)
Get Your Small Business Bailout Now
There are a number of good tax laws that benefit most small businesses that came into effect in September 2010 for both 2010 and 2011. Here is a summary of the benefits to your Small Business: 1. 100% bonus depreciation: This is so good that ... (continued)