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Key 2024 inflation-adjusted tax parameters for small businesses and their owners

Leave a Comment / Federal Taxes, Inflation, LLC, Ordinary Income Tax, Partnerships, Past-Through Entities, S Corporation, Self Employment Tax, Small Business, Small Business Owners, Small Business Tax Tips, Sole Proprietors / By Douglas Freeman

The IRS recently announced various inflation-adjusted federal income tax amounts. Here’s a rundown of the amounts that are most likely to affect small businesses and their owners. Rates and brackets. If you run your business as a sole proprietorship or pass-through business entity (LLC, partnership or S corporation), the business’s net ordinary income from operations …

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Is your business subject to the new BOI reporting rules?

Leave a Comment / Beneficial Ownership Information, Corporations, Financial Crimes Enforcement Network (FinCEN), LLC, Small Business, Small Business Tips, The Corporate Transparency Act (CTA) / By Douglas Freeman

The Corporate Transparency Act (CTA) was signed into law to fight crimes commonly associated with illegal business activities such as terrorist financing and money laundering. If your business can be defined as a “reporting company” under the CTA, you may need to comply with new beneficial ownership information (BOI) reporting rules that take effect on …

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Choosing a business entity: Which way to go?

Leave a Comment / Alternate Minimum Tax (AMT), Business Entities, C Corporation, Federal Income Tax, Federal Taxes, LLC, Past-Through Entities, Qualified Business Income Deducton (QBI), S Corporation, Small Business, Small Business Owners, Small Business Tips, Sole Proprietors / By Douglas Freeman

If you’re planning to start a business or thinking about changing your business entity, you need to determine what will work best for you. Should you operate as a C corporation or a pass-through entity such as a sole proprietorship, partnership, limited liability company (LLC), or S corporation? There are many issues to consider. Currently, …

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It’s important to understand how taxes factor into M&A transactions

Assets, C Corporation, Federal Income Tax, LLC, Merger & Acquisition, Partnerships, Past-Through Entities, S Corporation, Small Business, Small Business Owners, Small Business Stock, Small Business Tax Tips, Stocks, Tax Considerations for Selling Your Business / By Douglas Freeman

In recent years, merger and acquisition activity has been strong in many industries. If your business is considering merging with or acquiring another business, it’s important to understand how the transaction will be taxed under current law. Stocks vs. assets. From a tax standpoint, a transaction can basically be structured in two ways: 1. Stock …

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The advantages of using an LLC for your small business

Federal Income Tax, Limited Liability Company, LLC, Partnerships, S Corporation, Shareholder, Small Business, Small Business Tax Tips / By Douglas Freeman

If you operate your small business as a sole proprietorship, you may have thought about forming a limited liability company (LLC) to protect your assets. Or maybe you’re launching a new business and want to know your options for setting it up. Here are the basics of operating as an LLC and why it might …

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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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Key tax issues in M&A transactions

Assets, Business Income Tax, Capital Gains, Federal Income Tax, LLC, Merger & Acquisition, Partnerships, S Corporation, Small Business, Small Business Tax Tips, Sole Proprietors, Stocks, Taxes 2023 / By Douglas Freeman

Merger and acquisition activity dropped dramatically last year due to rising interest rates and a slowing economy. The total value of M&A transactions in North America in 2022 was down 41.4% from 2021, according to S&P Global Market Intelligence. But some analysts expect 2023 to see increased M&A activity in certain industries. If you’re considering …

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Separating your business from its real estate

Assets, Business Income Tax, C Corporation, Capital Gains, Estate Planning, Income Tax, LLC, Partnerships, Past-Through Entities, Real Estate, Small Business Owners / By Douglas Freeman

Does your business need real estate to conduct operations? Or does it otherwise hold property and put the title in the name of the business? You may want to rethink this approach. Any short-term benefits may be outweighed by the tax, liability, and estate planning advantages of separating real estate ownership from the business. Tax …

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Self-employed? Build a nest egg with a solo 401(k) plan

401K, LLC, Self Employed, Simplified Employee Pension (SEP), Small Business, Small Business Owners, Sole Proprietors, Solo 401 (k) / By Douglas Freeman

Do you own a successful small business with no employees and want to set up a retirement plan? Or do you want to upgrade from a SIMPLE IRA or Simplified Employee Pension (SEP) plan? Consider a solo 401(k) if you have healthy self-employment income and want to contribute substantial amounts to a retirement nest egg. …

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Three tax breaks for small businesses

C Corporation, Cash Method of Accounting, Federal Income Tax, LLC, Past-Through Entities, Qualified Business Income Deducton (QBI), S Corporation, Section 179, Shareholder, Small Business, Sole Proprietors, Tax, Tax Deduction / By Douglas Freeman

Sometimes, bigger isn’t better: Your small- or medium-sized business may be eligible for some tax breaks that aren’t available to larger businesses. Here are some examples. 1. QBI deduction. For 2018 through 2025, the qualified business income (QBI) deduction is available to eligible individuals, trusts, and estates. But it’s not available to C corporations or …

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