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INSIGHTS & PERSPECTIVES
The recently passed Tax Cuts and Jobs Act includes a multitude of provisions that will have a major impact on businesses. For example, it creates a flat corporate rate of 21% and temporarily provides a new 20% qualified business income deduction for owners of flow-through entities (such as partnerships and S corporations) and sole proprietorships.
Read articleOperating in another state might mean being subject to taxation there, generally if you have nexus with the state. Essentially, “nexus” means a business presence that’s substantial enough to trigger the state’s tax rules and obligations. What activates nexus depends on a state’s chosen criteria.
Read articleTreating transfers of money between a closely held business and its owners as loans can provide tax advantages. But the IRS looks closely at such transactions, so it’s critical to establish that the transaction is truly a loan by executing a promissory note, charging a reasonable rate of interest, and establishing and following a fixed repayment schedule.
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If last year your business made repairs to tangible property, such as buildings, machinery, equipment or vehicles, you may be eligible for a valuable deduction on your 2016 income tax return. But you must make sure they were truly “repairs,” and not actually “improvements.”
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Picking someone to lead your company after you step down is probably among the hardest aspects of retiring (or otherwise moving on). Sure, there are some business owners who have a ready-made successor waiting in the wings at a moment’s notice. But many have a few viable candidates to consider — others have too few.
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Bartering might seem like something that happened only in ancient times, but the practice is still common today. And the general definition remains the same: the exchange of goods and services without the exchange of money. Because no cash changes hands in a typical barter transaction, it’s easy to forget about taxes.
Read articleAn IC-DISC is a tax-exempt entity that pays no federal tax on commission income. An IC-DISC, means a significant tax advantage by converting “ordinary income” taxed at 39.6% federal rate to maximum dividend rate of 23.8% (15.8% rate differential).
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