Small Business Tax Tips – Page 7

A refresher on the trust fund recovery penalty for business owners and executives

One might assume the term “trust fund recovery penalty” has something to do with estate planning. It’s important for business owners and executives to know better. In point of fact, the trust fund recovery penalty relates to payroll taxes. The IRS uses it to hold accountable “responsible persons” who willfully withhold income and payroll taxes […]

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What types of expenses can’t be written off by your business?

Business Deductions, Federal Income Tax, Federal Tax Deductions, Internal Revenue Service (IRS), Small Business Tax Tips, Small Business Tips, Tax Deduction / Douglas Freeman

If you read the Internal Revenue Code (and you probably don’t want to!), you may be surprised to find that most business deductions aren’t specifically listed. For example, the tax law doesn’t explicitly state that you can deduct office supplies and certain other expenses. Some expenses are detailed in the tax code, but the general

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Business owners: Think carefully about fringe benefits related to smartphones

Employee Benefits, Fringe Benefits For Employees, Small Business, Small Business Owners, Small Business Tax Tips / Douglas Freeman

You’d be hard-pressed to find many employees these days who don’t use smartphones for some aspect of their jobs. Even someone who works behind a point-of-sale device may use a phone to interact with a supervisor or log work hours. For business owners, this situation creates both problems and opportunities. On the downside, there are

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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 / 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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Update on depreciating business assets

Assets, Business Deductions, Business Equipment, Depreciation Deduction (Section 179), Qualified Business Income Deducton (QBI), Small Business, Small Business Owners, Small Business Tax Tips, Tax Cuts and Job Acts (TCJA) / Douglas Freeman

Update on depreciating business assets C The Tax Cuts and Jobs Act liberalized the rules for depreciating business assets. However, the amounts change every year due to inflation adjustments. And due to high inflation, the adjustments for 2023 were big. Here are the numbers that small business owners need to know. Section 179 deductions. For

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Divorcing business owners should pay attention to the tax consequences

Assets, Capital Gains, Divorce, Small Business Owners, Small Business Stock, Small Business Tax Tips, Small Business Tips / Douglas Freeman

If you’re getting a divorce, you know the process is generally filled with stress. But if you’re a business owner, tax issues can complicate matters even more. Your business ownership interest is one of your biggest personal assets and in many cases, your marital property will include all or part of it. Transferring property tax-free

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The tax consequences of employer-provided life insurance

Federal Taxes, Fringe Benefits For Employees, Income Tax, Insurance, Life Insurance, Small Business Tax Tips / Douglas Freeman

If your employer provides life insurance, you probably find it to be a desirable 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. You’re taxed on income you didn’t receive. The first $50,000 of group term

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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 / 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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Corporate officers or shareholders: How should you treat expenses paid personally?

Business Deductions, C Corporations, Shareholder, Small Business, Small Business Tax Tips / Douglas Freeman

If you play a major role in a closely held corporation, you may sometimes spend money on corporate expenses personally. These costs may end up being nondeductible both by an officer and the corporation unless the correct steps are taken. This issue is more likely to happen with a financially troubled corporation. What can’t you

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The Trust Fund Recovery Penalty: Who can it be personally assessed against?

Income Tax, Small Business, Small Business Tax Tips, Social Security, Trust Fund Recovery Penalty / Douglas Freeman

If you own or manage a business with employees, there’s a harsh tax penalty that you could be at risk for paying personally. The Trust Fund Recovery Penalty (TFRP) applies to Social Security and income taxes that are withheld by a business from its employees’ wages. Sweeping penalty The TFRP is dangerous because it applies

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