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Tax Issues When Converting From a C Corporation to an S Corporation
Operating as an S corporation may help reduce federal employment taxes for small businesses in the right circumstances. Although S corporations may provide tax advantages over C corporations, there are some potentially costly tax issues that you should assess before making a decision to switch. Here’s a quick rundown of
Ways Your Business Can Accelerate Taxable Income and Defer Deductions
Typically, businesses want to delay recognition of taxable income into future years and accelerate deductions into the current year. But when is it prudent to do the opposite? And why would you want to? One reason might be tax law changes that raise tax rates. There have been discussions in Washington
Check Child Labor Laws if Hiring Minors for the Summer
Spring has sprung — and summer isn’t far off. If your business typically hires minors for summer jobs, now’s a good time to brush up on child labor laws. In News Release No. 22-546-DEN, the U.S. Department of Labor’s Wage and Hour Division (WHD) recently announced that it’s stepping up
Tax Benefits and Pitfalls of Turning Your Home Into a Rental Property
In some cases, homeowners decide to move to new residences, but keep their present homes and rent them out. If you’re thinking of doing this, you’re probably aware of the financial risks and rewards. However, you also should know that renting out your home carries potential tax benefits and pitfalls.
Tax Breaks for Businesses and Self-Employed Taxpayers
As the 2021 tax filing season progresses, small businesses and self‐employed taxpayers should make certain they are taking advantage of all of the tax deductions and opportunities available to them on their 2021 federal income tax returns. Tax savings increases after‐tax cash flow and can mean greater return on investment
State Pass-Through Entity Tax Elections
More than 20 states now allow pass‐through entities (PTEs) to elect to be taxed at the entity level to help their residents avoid the $10,000 limit on federal itemized deductions for state and local taxes, also known as the “SALT cap.” For PTEs electing into a state PTE tax regime,
Business Meals Deduction for 2022
The federal government is helping to pick up the tab for certain business meals. Under a provision that’s part of one of the COVID-19 relief laws, the usual deduction for 50% of the cost of business meals is doubled to 100% for food and beverages provided by restaurants in 2022
Tax Implications of Selling Mutual Fund Shares
If you’re an investor in mutual funds or you’re interested in putting some money into them, you’re not alone. According to the Investment Company Institute, a survey found 58.7 million households owned mutual funds in mid-2020. But despite their popularity, the tax rules involved in selling mutual fund shares can
Cash vs. Accrual Accounting Methods
Small businesses may start off using the cash-basis method of accounting. But many eventually convert to accrual-basis reporting to conform with U.S. Generally Accepted Accounting Principles (GAAP). Which method is right for you? Cash Method Under the cash method, companies recognize revenue as customers pay invoices and expenses when they
A Beneficiary Designation or Joint Title Can Override Your Will
Inattention to beneficiary designations and jointly titled assets can quickly unravel your estate plan. Suppose, for example, that your will provides for all of your property to be divided equally among your three children. But what if your IRA, which names the oldest child as beneficiary, accounts for half of