Many business owners are surprised to learn that a basic SUV, sedan, or crossover can run into the same depreciation limits as a luxury car. This is exactly the kind of issue to review as part of tax planning for business vehicle purchases. Even though “luxury auto depreciation limits,” sounds like it would apply only to high-end cars like […]
The Luxury Auto Tax Trap for Regular Business Vehicles Read More »
If you are an S corporation owner, this question matters more than most people realize. Reasonable compensation is the amount a business owner-employee should be paid for the work they actually perform. In plain English, it is what you would have to pay someone else to do your job under similar facts and circumstances. This is
What Is Reasonable Compensation? Read More »
Real estate activities fall into several different tax categories. It could be classified as a business or an investment, and that difference can change your tax bill. This is exactly the kind of issue to review as part of tax planning for business and investment activity. Rental Properties Rental real estate is sometimes treated like a business
Real Estate: Business or Investment? Read More »
When a taxpayer owns a house where a relative resides, they navigate tax-planning considerations related to rent, expense reimbursement, and impact on deductions. Let’s explore three common approaches based on the document provided and relevant IRS guidelines. 1. Charging Rent at Fair Market Value Charging fair market rent ensures the property is treated as a rental for tax purposes. This
How Should a Taxpayer Handle Owning a House Occupied by a Relative? Read More »
You’ve worked hard to bring in a good new employee. You interviewed, agonized, made the offer—and now they’re in the seat. But the reality is, they still have a lot to learn. Now your job is to give that new employee the best possible chance to succeed. Because what happens next will determine whether they become an asset—or a drain
How to Train and Manage Your New Employee for Real Productivity Read More »
Many business owners believe that leaving money in the business checking account can delay or even eliminate taxes on that income. At first glance, that feels logical. If you do not take the money out, it seems like it should not count as income. Unfortunately, that is not how the tax rules work. This is exactly the kind of issue
Does Money Left in the Business Bank Account Impact Taxes? It’s Complicated Read More »
When does side income become a business? Many people are surprised to learn they already have a business for tax purposes — even if they never formed an LLC or thought of themselves as “business owners.” The IRS uses a very broad definition of a business for tax purposes. Understanding whether what you’re doing counts as a business can dramatically affect your taxes. It determines whether you can
Surprise! You Just Started a Business Read More »
Many business owners would just look at inflation in terms of the standard published rate, such as the CPI (Consumer Price Index), and feel on top of things if they do an equal or greater price increase this year. But this article is going to show you how inflation specifically impacts your business and help you understand what actions
The Business Owner’s Guide to Dealing with Inflation Read More »
Electing S corporation status can feel like a S corporation tax-planning move, and in many cases, it is. You may reduce self-employment taxes and keep more of what you earn. Those savings come with real responsibilities though: running payroll, filing Form 1120-S, tracking shareholder basis, and following strict IRS rules. Before you file Form 2553, make
S Corporation Election: Tax Savings with Strings Attached Read More »
If you only look at your numbers once a year, you’re trying to run a business based on financial guesses. Guessing wrong can cost you dearly. Monthly accounting services are different. It turns your numbers into a tool that saves you time and money. Annual tax survival mode is sometimes enough to keep the IRS off your back, and it can seem like
Monthly Accounting: The Tool Smart Business Owners Use to Increase Profit Read More »
