Taxable Income

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

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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10 facts about the pass-through deduction for qualified business income

Are you eligible to take the deduction for qualified business income (QBI)? Here are 10 facts about this valuable tax break, referred to as the pass-through deduction, QBI deduction or Section 199A deduction. It’s available to owners of sole proprietorships, single-member limited liability companies (LLCs), partnerships, and S corporations. It may also be claimed by …

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IRS audits may be increasing, so be prepared

The IRS just released its audit statistics for the 2020 fiscal year and fewer taxpayers had their returns examined as compared with prior years. But even though a small percentage of returns are being chosen for audit these days, that will be little consolation if yours is one of them. Latest statistics. Overall, just 0.5% …

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Business charitable contribution rules have changed under the CARES Act

In light of the novel coronavirus (COVID-19) pandemic, many businesses are interested in donating to charity. In order to incentivize charitable giving, the Coronavirus Aid, Relief and Economic Security (CARES) Act made some liberalizations to the rules governing charitable deductions. Here are two changes that affect businesses: The limit on charitable deductions for corporations has …

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The CARES Act liberalizes net operating losses

The Coronavirus Aid, Relief, and Economic Security (CARES) Act eliminates some of the tax-revenue-generating provisions included in a previous tax law. Here’s a look at how the rules for claiming certain tax losses have been modified to provide businesses with relief from the novel coronavirus (COVID-19) crisis. NOL deductions. Basically, you may be able to …

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3 last-minute tips that may help trim your tax bill

If you’re starting to fret about your 2019 tax bill, there’s good news — you may still have time to reduce your liability. Three strategies are available that may help you cut your taxes before year-end, including 1. Accelerate deductions/defer income. Certain tax deductions are claimed for the year of payment, such as the mortgage …

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How to treat your business website costs for tax purposes

These days, most businesses need a website to remain competitive. It’s an easy decision to set one up and maintain it. But determining the proper tax treatment for the costs involved in developing a website isn’t so easy. That’s because the IRS hasn’t released any official guidance on these costs yet. Consequently, you must apply …

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The next estimated tax deadline is September 16: Do you have to make a payment?

If you’re self-employed and don’t have withholding from paychecks, you probably have to make estimated tax payments. These payments must be sent to the IRS on a quarterly basis. The third 2019 estimated tax payment deadline for individuals is Monday, September 16. Even if you do have some withholding from paychecks or payments you receive, …

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Bartering: A taxable transaction even if your business exchanges no cash

Small businesses may find it beneficial to barter for goods and services instead of paying cash for them. If your business engages in bartering, be aware that the fair market value of goods that you receive in bartering is taxable income. And if you exchange services with another business, the transaction results in taxable income …

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