It is common for partners to bear the costs associated with the business of the partnership. This is particularly true in service-based partnerships like architecture or law firms. For instance, partners in service partnerships may have expenses for entertaining clients in order to cultivate new relationships. They may also have expenses for transportation to attend
Although the economy has bounced back from the uncertainties of the COVID-19 years, it can still be rough going for nonprofit organizations. According to Independent Sector, 2022 saw a 10% drop in donors. If your organization is struggling, you may need to report this in your financial statements. A going-concern evaluation will lay the groundwork
If you own a business or are embarking on an entrepreneurial journey, keeping meticulous business records of your income and expenses is non-negotiable. This practice is not only crucial for claiming every tax deduction you’re entitled to but also serves as your shield should the IRS scrutinize your tax returns. Effective recordkeeping and management of
Do you have to pay Social Security and Medicare Tax on your child’s wages? For sole proprietorships, single-member LLCs taxed as a disregarded entity, or partnerships owned by spouses: Payments to children under 18 years old are NOT subject to social security or Medicare taxes. This means that you don’t have to withhold those taxes
What is the electric vehicle tax credit? First things first: what electric vehicle tax credit is available for vehicles purchased on or after January 1, 2023? For new electric vehicles: Electric vehicles — also commonly called clean energy vehicles (we’ll be using both terms in this article) — purchased new on or after January 1,
The qualified business income (QBI) deduction is available to eligible businesses through 2025. After that, it’s scheduled to disappear. So if you’re eligible, you want to make the most of the deduction while it’s still on the books because it can potentially be a big tax saver. QBI Deduction Basics The QBI deduction is written
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
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