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
Residential Clean Energy Property Credit Making clean energy upgrades to your home? You could save on taxes with the Residential Clean Energy Property Credit, which kicked in on January 1, 2023, and carries through until January 1, 2033, when it begins to phase out. This home energy tax credit has no annual or lifetime limit
What is beneficial ownership information reporting? In order to fully explain this, let’s travel back in time to 2021 when Congress passed the Corporate Transparency Act. This act was designed to “provide law enforcement with beneficial ownership information for the purpose of detecting, preventing and punishing terrorism, money laundering and other misconduct through business entities.”
In 2024, there will be a 1.5 cent increase per mile to the optional standard mileage rate that is used to determine the deductible cost of operating a vehicle for business purposes. The IRS recently announced that the cents-per-mile rate for using a car, van, pickup, or panel truck for commercial purposes will increase to
What is the hobby loss rule? Internal Revenue Code Section 183 — known as the “hobby loss rule” — limits deductions that can be claimed when the IRS considers an operation to be a hobby, rather than a business. According to a 2023 Bankrate survey, nearly 40% of Americans have a “side hustle” — a stream of income
Can you take a charitable donation tax deduction on your federal return? Standard deduction vs. itemized deductions: which one? To itemize or not to itemize: that is the question. You can only take a donation tax deduction on your federal tax return when you itemize. So which one should you choose — the standard deduction
The IRS recently announced various inflation-adjusted tax brackets. Here’s a rundown of the amounts that are most likely to affect small businesses and their owners. Rates and tax brackets for small businesses If you run your business as a sole proprietorship or pass-through business entity (LLC, partnership or S corporation), the business’s net ordinary income
You may be familiar with the tax rule allowing a company to deduct employee bonuses this year as long as it pays them within 2.5 months of the end of the tax year. This appealing year-end planning strategy is advantageous to both your company and your staff: your employees do not have to disclose their
Tax deductions are not nearly as important as tax credits. A credit, as opposed to a deduction, lowers a company’s tax obligation dollar for dollar. However, tax credits aren’t unlimited. The general business credit (GBC), which is located in Internal Revenue Code Section 38, may have a maximum limit on the total amount of tax
What business activities trigger sales tax nexus? >> Physical Presence Nexus Physical presence nexus has historically been the criteria for determining local sales and use tax obligation. Physical presence in a jurisdiction includes activities like: Having a physical office, warehouse, storefront, or other location within the state Holding any property (including intangible assets and inventory)