Category Archives: Small Business
Combining business and vacation travel: What can you deduct?
If you go on a business trip within the United States and tack on some vacation days, you can deduct some of your expenses. But exactly what can you write off? Transportation expenses Transportation costs to and from the location of your business activity are 100% deductible as long as the primary reason for… Read More »
To deduct business losses, you may have to prove “material participation”
You can only deduct losses from an S corporation, partnership or LLC if you “materially participate” in the business. If you don’t, your losses are generally “passive” and can only be used to offset income from other passive activities. Any excess passive loss is suspended and must be carried forward to future years. Material… Read More »
Throw a company picnic for employees this summer and enjoy larger deductions
Many businesses host a picnic for employees in the summer. It’s a fun activity for your staff and you may be able to take a larger deduction for the cost than you would on other meal and entertainment expenses. Deduction limits Generally, businesses are limited to deducting 50% of allowable meal and entertainment expenses…. Read More »
Finding the right tax-advantaged account to fund your health care expenses
With health care costs continuing to climb, tax-friendly ways to pay for these expenses are more attractive than ever. Health Savings Accounts (HSAs), Flexible Spending Accounts (FSAs) and Health Reimbursement Accounts (HRAs) all provide opportunities for tax-advantaged funding of health care expenses. But what’s the difference between these three accounts? Here’s an overview: HSA. If… Read More »
Combine business travel and a family vacation without losing tax benefits
Are you thinking about turning a business trip into a family vacation this summer? This can be a great way to fund a portion of your vacation costs. But if you’re not careful, you could lose the tax benefits of business travel. Reasonable and necessary Generally, if the primary purpose of your trip is… Read More »
Taking advantage of tangible property safe harbors
If your business has made repairs to tangible property, such as buildings, machinery, equipment and vehicles, you may be eligible for a deduction on your 2014 income tax return. But you must make sure they were truly “repairs,” and not actually “improvements.” Why? Costs incurred to improve tangible property must be depreciated over a… Read More »
Have you misclassified employees as independent contractors?
Independent Contractor or Employee? Classification Matters! An employer enjoys several advantages when it classifies a worker as an independent contractor rather than as an employee. For example, it isn’t required to pay payroll taxes, withhold taxes, pay benefits or comply with most wage and hour laws. However, there’s a potential downside: If the IRS… Read More »
Who’s subject to the 50% limit on meal and entertainment deductions?
In general, when meal and entertainment expenses are incurred in the context of an employer-employee or customer–independent contractor relationship, one party will be subject to a 50% limitation on the deduction. But which party? Last year, the IRS finalized regulations that address this question. In the employer-employee setting: If the employer reimburses the employee… Read More »
Making the most of your business’s NOL
If during 2013 income tax return filing you found that your business had a net operating loss (NOL) for the year, the news isn’t all bad. While no one enjoys being unprofitable, an NOL does have an upside: tax benefits. In a nutshell, an NOL occurs when a company’s deductible expenses exceed its income… Read More »
Your 2013 return may be your last chance for two depreciation-related breaks
If you purchased qualifying assets by Dec. 31, 2013, you may be able to take advantage of these depreciation-related breaks on your 2013 tax return: Bonus depreciation. This additional first-year depreciation allowance is, generally, 50%. Among the assets that qualify are new tangible property with a recovery period of 20 years or less and… Read More »