Learn more about keeping your business compliant with federal tax requirements.
As a general rule, a business can claim a tax deduction for the salary, wages, commissions, bonuses, and other compensation it pays to its employees. However, compensation paid to business owners may be subject to serious scrutiny by the IRS.
Many home-based businesses will be able to benefit from a new, simplified method of claiming the home office deduction, starting with the 2013 tax returns. You can claim a deduction of up to $1,500 using the simplified form, provided you meet the stringent regular and exclusive use requirements. However, make sure you don't put convenience ahead of tax savings.
If you think you can benefit from the combined features of using an LLC to own and operate your small business and then having it be taxed like an S corporation, the possibility exists to establish your business as an LLC, but then make the election to have it treated as an S corporation by the IRS for tax purposes.
Generally, the cost of a capital asset must be recovered over the life of that asset. This is done via depreciation or amortization or upon the disposition of the asset. The expensing election can allow certain amounts to be deducted in the year of acquisition.
If you own a small business, incorporating now may allow you to dispose of it tax-free in the future. But you have to act before the end of 2013.
When your business is under 8 feet of water or blown to pieces, you probably aren't thinking about taxes. However, using the tax law effectively can help you get your financial feet back under you sooner.
You can check the status of your tax refund online, by telephone, or by using IRS2Go on your mobile device.
There are only a few accepted methods of safely communicating by mail with the IRS.
Before donating to a charity, verify that its tax-exempt status was not automatically revoked because it didn't file annual returns with the IRS.
Swapping goods and services generates taxable income in the eyes of the IRS.
An IRS ruling makes the business use of cell phones a less taxing affair.
An employer that withholds money from an employee's wages in response to an IRS levy is protected from legal liability, even if the employee successfully challenges the levy in court.
A child's unearned investment income may be taxed at the parents' tax rate, rather than the lower rate that would probably apply if the income was taxed to the child.
If your business has more expenses than income during its tax year, then you may have a net operating loss. This loss can be used to offset income in other years.
The Self-Employment Contributions Act (SECA) tax is the business owner's version of the FICA tax paid by employees and employers. The same contribution rates and income ceilings apply that apply to FICA tax.
When you sell, scrap, or otherwise remove a capital asset from your business, you'll have to report the change to the IRS. The good news is that long-term capital gains are taxed at a lower rate than other income, and if you have a loss on the property, you can deduct it. The bad news is that you may have ordinary income as a result of expensing or depreciation. And, you may find yourself subject to the 3.8 percent tax on Net Investment Income.
Vehicles, computers, computer peripherals, photographic equipment, audio and video equipment and other types of property that is often used for both personal and business purposes (known as "listed property") are special recordkeeping requirements and restrictions on depreciation and expensing.
Bonus depreciation (for years prior to 2014) and the expensing election enable you to deduct much of the entire cost of a capital asset in the year in which you acquire it.
You must deduct the cost of a capital asset used in your business using depreciation methods and schedules dictated by the IRS. Most assets acquired after 1986 must be depreciated using MACRS, but other methods may be allowed.
Knowing an asset's basis (which is often its cost with certain additions or subtractions) is critical in determining depreciation deductions and in establishing gain or loss when you dispose of it.
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