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)
You can claim a tax deduction for minor repairs made by your business by December 31st, 2023, on your tax return, but improvements are subject to separate tax laws. Improvements, as opposed to repairs, are capital expenses that need to be deducted gradually. How can you determine if the project is an improvement or a repair?
If you study the Internal Revenue Code—which you most likely won’t want to—you might be surprised to learn that the majority of company deductions aren’t mentioned in detail. For instance, it isn’t specifically stated in the tax code that you can write off office supplies and other costs. Some expenses are mentioned in the tax
How does the dividends received deduction alleviate triple taxation? Triple taxation can be understood with the following scenario: First tax: The subsidiary corporation pays tax on income earned Second tax: The parent corporation pays tax on dividends received from the subsidiary corporation Third tax: Shareholders are taxed on the dividends they receive from the parent
Do you and your spouse run a successful unincorporated small business together? If so, you face some challenging tax issues. The partnership issue for spouse-run businesses An unincorporated business with your spouse is classified as a partnership for federal income tax purposes, unless you can avoid that treatment. If not, you must submit a Form
What is asset depreciation? Let’s start with the basics: what is asset depreciation? First, the IRS definition: “Depreciation is the recovery of the cost of the property over a number of years. You deduct a part of the cost every year until you fully recover its cost.” In layman’s terms, depreciation reduces a company’s tax