The DOs and DON’Ts of Business Deductions

If you’re claiming deductions for business meals or auto expenses, expect the IRS to closely review them. In some cases, taxpayers have incomplete documentation or try to create records months (or years) later. In doing so, they fail to meet the strict substantiation requirements set forth under tax law. Tax auditors are adept at rooting out inconsistencies, omissions and errors in taxpayers’ records, as illustrated by one recent U.S. Tax Court case.

How to Handle Independent Contractors

Many businesses use independent contractors to help keep their costs down — especially in these times of staff shortages and inflationary pressures. If you’re among them, be careful that these workers are properly classified for federal tax purposes. If the IRS reclassifies them as employees, it can be an expensive mistake.

The NOL Deduction Could Make Your Business Loss Less Painful

Whether you’re operating a new company or an established business, losses can happen. The federal tax code may help soften the blow by allowing businesses to apply losses to offset taxable income in future years, subject to certain limitations.

IRS Releases 2023 Dirty Dozen

The IRS has once again published its “Dirty Dozen” – an annual list of the top 12 tax scams that taxpayers and businesses should be on the lookout for. Although many of these scams peak during tax season, the IRS warns that taxpayers should be vigilant year-round.

Are You Taking Advantage of Employee Compensation Deductions?

Did you know that there is a tax advantage to taking money out of a C corporation as compensation rather than as dividends? A corporation can deduct the salaries and bonuses that it pays executives, but not dividend payments. If funds are paid as dividends, they’re taxed twice, once to the corporation and once to the recipient. Money paid out as compensation is only taxed once — to the employee who receives it. 

Upgrading Your Business Space? Take Advantage of the Rehabilitation Tax Credit

If your business occupies substantial space and needs to increase or move from that space in the future, you should keep the rehabilitation tax credit in mind. This is especially true if you favor historic buildings.

The Tax Advantages of Hiring Your Child This Summer

With summer right around the corner, you may be thinking about hiring seasonal help for your small business. At the same time, you may have children looking to earn extra spending money. You can save family income and payroll taxes by putting your child on the payroll. It’s a win-win!

S-Corp 101

If you’re starting a business with some partners and wondering what type of entity to form, an S corporation may be a good fit.

Proposed Bipartisan Bill Provides R&D Tax Relief

On March 17, 2023, US Senators Maggie Hassan and Todd Young reintroduced their American Innovation and Jobs Act. This bi-partisan legislation promotes innovation by encouraging new and established businesses to invest in scientific research and development (R&D) of new technologies.

IRS Plans to Release New Guidance on NFTs

The IRS announced on March 21, 2023 that they are soliciting feedback in advance of new guidance on the tax treatment of NFTs as collectibles.