Category: IRS

Here’s a tax break you might not have considered: Your business could be eligible for a tax credit for money you spend to meet the requirements of the Americans with Disabilities Act. The law requires companies with 15 or more employees to make reasonable accommodations in the workplace for disabled employees. (Reasonable accommodations must be made on a case-by-case basis and are not required when the cost would cause an undue hardship.) Eligible small businesses can claim a credit equal… Read more ›

The IRS has announced the 2023 optional standard mileage rates used to calculate the deductible costs of operating a vehicle for business, charitable, medical or moving purposes. Background: If you use a vehicle for business driving, you can generally deduct the actual expenses attributable to your business use. This includes expenses such as gas, oil, tires, insurance, repairs, licenses and vehicle registration fees. In addition, you may claim a depreciation allowance for the vehicle, based on the percentage of business… Read more ›

Losses can be used, within certain limits, to offset other highly-taxed income, such as salary from a job. However, in general, losses from “passive” activities can only be used to offset income from other passive activities. Any excess passive loss is suspended and must be carried forward to future years. The tax law generally defines a passive activity as a trade or business in which you don’t “materially participate.” The IRS has established various tests for determining whether someone qualifies… Read more ›

Chances are, your construction business hires independent contractors, rather than employees, to perform some of the work. These arrangements obviously save your company a lot of time, money and headaches. Take a look at some of the recordkeeping and financial differences: With anEmployee: With an IndependentContractor: You must pay the employer’s half of FICA, as well as federal unemployment tax (FUTA). You generally don’t have to withhold taxes from the worker’s pay, you don’t owe the employer’s portion of FICA… Read more ›

Updated August 2, 2024 Click here to learn more about our tax, accounting and advisory services for attorneys and law firms. It’s not uncommon for an incoming partner in a professional firm to take out a personal loan to finance all or part of the cost of acquiring an ownership interest. If some of your firm’s partners have done this, they need to know the proper federal income tax treatment of the resulting interest expense. Such partner-level interest expense is sometimes called… Read more ›

Medical expenses can be costly — and they’re not always covered by insurance. But there may be a silver lining: You may be able to claim an itemized deduction for the amounts you pay for medical, dental and vision care, if you incur enough costs to exceed the applicable threshold for the tax year. Here are the details about this deduction. Raising the Bar on Medical Expense Deductions You can claim an itemized deduction for medical, dental, and vision care… Read more ›

  Recordkeeping is often essential to business operations and automobile dealerships are no exception. Many auto dealerships use the Last-In, First-Out (LIFO) method of inventory accounting. Although the LIFO method can provide significant tax benefits, you must be careful to meet certain tax law requirements. One such requirement that is often overlooked is the need to maintain comprehensive records. There are different LIFO methods for new and used vehicle inventories. For new vehicle inventories, dealerships electing to use the alternative… Read more ›

The IRS recently issued its 2023 cost-of-living adjustments for more than 60 tax provisions. With inflation up significantly this year, many amounts increased considerably over 2022 amounts. As you implement 2022 year-end tax planning strategies, be sure to take these 2023 adjustments into account. Also, keep in mind that, under the Tax Cuts and Jobs Act (TCJA), annual inflation adjustments are calculated using the chained consumer price index (also known as C-CPI-U). This increases tax-bracket thresholds, the standard deduction, certain… Read more ›

When President Biden signed the Inflation Reduction Act (IRA) into law in August, most of the headlines covered the law’s climate change and health care provisions. But the law also enhances an often overlooked federal tax break for qualifying small businesses. The IRA more than doubles the amount a qualified business can potentially claim as a research and development (R&D) tax credit to offset its payroll tax for tax years starting after 2022 — to a maximum of $2.5 million… Read more ›

The Inflation Reduction Act (IRA) includes a wide range of tax incentives aimed at combating the dire effects of climate change. One of the provisions receiving considerable attention from consumers is the expansion of the Qualified Plug-in Electric Drive Motor Vehicle Credit (IRC Section 30D), now known as the Clean Vehicle Credit. While the expanded credit seems promising, questions have arisen about just how immediate its impact will be. Here’s what you need to know about the credit if you’re… Read more ›