Compensation and Benefits – DougFreemanCPA.com

4 ways corporate business owners can help ensure their compensation is “reasonable”

C Corporations, Compensation, Compensation and Benefits, Employees, Small Business, Small Business Owners, Stocks, Tax Return / Douglas Freeman

If you’re the owner of an incorporated business, you know there’s a tax advantage to taking money out of a C corporation as compensation rather than as dividends. The reason: A corporation can deduct the salaries and bonuses that it pays executives, but not dividend payments. Therefore, if funds are paid as dividends, they’re taxed […]

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Choosing a business entity? Here are the pros and cons of a C corporation

C Corporations, Compensation and Benefits, Employee Benefits, Federal Income Tax, Income Tax, Small Business, Small Business Owners / Douglas Freeman

If you’re launching a new business venture, you’re probably wondering which form of business is most suitable. Here is a summary of the major advantages and disadvantages of doing business as a C corporation. A C corporation allows the business to be treated and taxed as a separate entity from you as the principal owner.

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No parking: Unused compensation reductions can’t go to health FSA

Compensation and Benefits, Employee Benefits, Employees, Fringe Benefits For Employees, FSA / Douglas Freeman

Among the many lasting effects of the pandemic is that some businesses are allowing employees to continue working from home — even now that the most acute phases of the public health crisis seem to be over in some places. This decision is raising some interesting questions about fringe benefits. For example, in IRS Information

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The tax implications of owning a corporate aircraft

Business Travel Deductions, Business Travel Expense, Compensation and Benefits, Corporate Aircraft, Depreciation Deduction (Section 179) / Douglas Freeman

If your business is successful and you do a lot of business travel, you may have considered buying a corporate aircraft. Of course, there are tax and non-tax implications for aircraft ownership. Let’s look at the basic tax rules. Business travel only In most cases, if your company buys a plane used only for business,

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Does your employer provide life insurance? Here are the tax consequences

Compensation and Benefits, Employee Benefits, Employees, Individual Income Tax, Life Insurance, Tax Planning / Douglas Freeman

Employer-provided life insurance is a coveted fringe benefit. However, if group term life insurance is part of your benefits package, and the coverage is higher than $50,000, there may be undesirable income tax implications. Tax on income you don’t receive. The first $50,000 of group term life insurance coverage that your employer provides is excluded

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Are your company’s job descriptions pulling their weight?

Compensation and Benefits, Employees, Hiring, Small Business / Douglas Freeman

At many businesses, job descriptions have it easy. They were “hired” (that is, written) many years ago. They haven’t had to change or do anything, really, besides get copied and pasted into a want ad occasionally. They’re not really good at what they do, but they’re used again and again because everyone assumes they’re just

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Time for NQDC plan deferral elections

401 K, 529 Saving Plan, Compensation, Compensation and Benefits, Federal Income Tax Filing, Income Tax, Nonqualified Deferred Compensation (NQDC), Tax, Tax Cuts and Job Acts (TCJA), Tax Planning, Tax Savings / Douglas Freeman

If you’re an executive or other key employee, your employer may offer you a nonqualified deferred compensation (NQDC) plan. As the name suggests, NQDC plans pay employees in the future for services currently performed. The plans allow deferral of the income tax associated with the compensation. But to receive this attractive tax treatment, NQDC plans

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Now’s the time to review your business expenses

Business Income Tax, Business Travel Deductions, Business Travel Expense, Compensation and Benefits, Deductable Expenses, Employee Benefits, Income Tax, Internal Revenue Service, Itemized Deduction, Small Business, Tax Cuts and Job Acts (TCJA), Tax Deduction, Tax Planning / Douglas Freeman

As we approach the end of the year, it’s a good idea to review your business’s expenses for deductibility. At the same time, consider whether your business would benefit from accelerating certain expenses into this year. Be sure to evaluate the impact of the Tax Cuts and Jobs Act (TCJA), which reduces or eliminates many

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Saving tax on restricted stock awards with the Sec. 83(b) election

Compensation and Benefits, Employee Benefits, Income Tax, Individual Income Tax, Investment, Restricted Stock, Sec. 83(B), Stock Based Compensation, Tax, Tax Cuts and Job Acts (TCJA), Tax Planning / Douglas Freeman

Today many employees receive stock-based compensation from their employer as part of their compensation and benefits package. The tax consequences of such compensation can be complex — subject to ordinary-income, capital gains, employment and other taxes. But if you receive restricted stock awards, you might have a tax-saving opportunity in the form of the Section

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