Depreciation – DougFreemanCPA.com

A cost segregation study may cut taxes and boost cash flow

Leave a Comment / Cash Flow, Cost Segregation Study, Depreciation, Depreciation Deduction (Section 179), Federal Taxes, Small Business, Small Business Tips, Tax Cuts and Job Acts (TCJA) / By Douglas Freeman

Is your business depreciating over 30 years the entire cost of constructing the building that houses your enterprise? If so, you should consider a cost segregation study. It may allow you to accelerate depreciation deductions on certain items, thereby reducing taxes and boosting cash flow. Depreciation basics. Business buildings generally have a 39-year depreciation period …

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Advantages and disadvantages of claiming big first-year real estate depreciation deductions

(NIIT) Net Investment Income Tax, Depreciation, Depreciation Deduction (Section 179), LLC, Past-Through Entities, Qualified Improvement Property (QIP), Real Estate, Small Business, Small Business Tax Tips / By Douglas Freeman

Your business may be able to claim big first-year depreciation tax deductions for eligible real estate expenditures rather than depreciate them over several years. But should you? It’s not as simple as it may seem. Qualified improvement property. For qualifying assets placed in service in tax years beginning in 2023, the maximum allowable first-year Section …

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Buying a new business vehicle? A heavy SUV is a tax-smart choice

Business Deductions, Business Equipment, Business Expenses, Business Vehicle, Depreciation, Depreciation Deduction (Section 179), Vechicle / By Douglas Freeman

If you’re buying or replacing a vehicle that you’ll use in your business, be aware that a heavy SUV may provide a more generous tax break this year than you’d get from a smaller vehicle. The reason has to do with how smaller business cars are depreciated for tax purposes. Depreciation rules. Business cars are …

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The tax rules of renting out a vacation property

Deductions, Depreciation, Income Tax, Rental Property, Tax, Vacation Rental / By Douglas Freeman

Summer is just around the corner. If you’re fortunate enough to own a vacation home, you may wonder about the tax consequences of renting it out for part of the year. The tax treatment depends on how many days it’s rented and your level of personal use. Personal use includes vacation use by your relatives …

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Will the standard business mileage rate go up in 2022? Yes!

Business Deductions, Business Mileage, Depreciation, Employees, Income Tax, Small Business, Standard Business Mileage Rate, Tax Deduction, Vehicle Expenses / By Debbie Davis

After two years of no increases, the optional standard mileage rate used to calculate the deductible cost of operating an automobile for business will be going up in 2022 by 2.5 cents per mile. The IRS recently announced that the cents-per-mile rate for the business use of a car, van, pickup or panel truck will …

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Get your piece of the depreciation pie now with a cost segregation study

Cost Segregation Study, Deductions, Depreciation, Small Business / By Douglas Freeman

If your business is depreciating over a 30-year period the entire cost of constructing the building that houses your operation, you should consider a cost segregation study. It might allow you to accelerate depreciation deductions on certain items, thereby reducing taxes and boosting cash flow. And under current law, the potential benefits of a cost …

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Vacation home: How is your tax bill affected if you rent it out?

Depreciation, Income Tax, Property Tax, Rental Expenses, Rental Property, Tax, Tax Deduction, Tax Planning, Tax Savings, Vacation Rental / By Douglas Freeman

If you’re fortunate enough to own a vacation home, you may want to rent it out for part of the year. What are the tax consequences? The tax treatment can be complex. It depends on how many days it’s rented and your level of personal use. Personal use includes vacation use by you, your relatives …

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M&A transactions: Be careful when reporting to the IRS

Amortization Assets, Assets, Depreciation, Internal Revenue Service (IRS), Merger & Acquisition, Small Business, Tax, Tax Planning / By Douglas Freeman

Low interest rates and other factors have caused global merger and acquisition (M&A) activity to reach new highs in 2021, according to Refinitiv, a provider of financial data. It reports that 2021 is set to be the biggest in M&A history, with the United States accounting for $2.14 trillion worth of transactions already this year. …

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Tax depreciation rules for business automobiles

Depreciation, Gross Vehicle Weight Rating (GVWR), Small Business, Tax Deduction, Tax Savings, Vehicle Expenses / By Douglas Freeman

If you use an automobile in your trade or business, you may wonder how depreciation tax deductions are determined. The rules are complicated, and special limitations that apply to vehicles classified as passenger autos (which include many pickups and SUVs) can result in it taking longer than expected to fully depreciate a vehicle. Cents-per-mile vs. …

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Drive more savings to your business with the heavy SUV tax break

Business Deductions, Business Expenses, Deductable Expenses, Depreciation, Depreciation Deduction (Section 179), Equipment, Income Tax, Small Business / By Douglas Freeman

Are you considering replacing a car that you’re using in your business? There are several tax implications to keep in mind. A cap on deductions. Cars are subject to more restrictive tax depreciation rules than those that apply to other depreciable assets. Under so-called “luxury auto” rules, depreciation deductions are artificially “capped.” So is the …

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