Ever had a really slow day at the shop? Your taxes are that slow day at the shop. And your tax deductions are that person snapping up all your stellar goods. Why? Because tax deductions make taxes WAY more interesting and affordable. And the more you understand them, the more you can write off—and the…
Employees and contractors—they’re basically the same thing, right? Not really. That’s like saying Superman and Batman are the same. Sure, they’re both caped crusaders, but while Superman uses his superpowers, Batman relies on his wits and smarts to fight crime. Likewise, employees and contractors have distinct characteristics that set them apart from each other. And…
An owner’s draw, usually just called a “draw”, is an amount taken out of money taken out from a sole proprietorship or partnership by the owner for his personal use. It’s called a draw because money is drawn out of the business. What Business Owners Take Draws? Owners of small businesses typically don’t take a salary because…
Taxpayers and business owners received a much needed lifeline yesterday from the Treasury and IRS in response to the Coronavirus outbreak. Individual taxpayers will get a three-month (90 day) extension to pay income taxes they owe for 2019, typically due on April 15th, but will now have until July 15th, 2020. Specifically, the IRS will…
Effective January 1, 2020 a new Federal Form W-4, Employee’s Withholding Allowance Certificate, will be required What is changing? The updated Form and associated withholding tables have been completely redesigned due to the 2017 Tax Cuts and Jobs Act mandates. Improvements to the form are intended to increase the transparency and accuracy of employee withholding…
Over the past few years there have been a number of changes and updates regarding the reporting rules for the mysterious 1099-Misc Forms. I say “mysterious” because many business owners simply guess as to what the rules are and oftentimes get exasperated and just give up choosing to file nothing at all. This can be a…
No one wants a visit from the Internal Revenue Service. But if you get too generous with your calculations, you may need to back up your tax return. “For individuals, it usually comes down to being too overly aggressive with tax deductions or benefits that could invite the IRS in,” says Logan Allec, a certified…
A number of end-of-year tax planning strategies are available to business owners that can be used to reduce their tax liability. Here are a few of them: Deferring Income Businesses using the cash method of accounting can defer income into 2020 by delaying end-of-year invoices, so payment is not received until 2020. Businesses using the…
Under the IRS rules, a taxpayer is allowed to deduct expenses related to business use of a home, but only if the space is used “exclusively” on a “regular basis.” To qualify for a home office deduction you must meet one of the following requirements: Exclusive and regular use as your principal place of business…
A safe harbor is now available for taxpayers seeking to claim the section 199A deduction with respect to a “rental real estate enterprise.” What this means is that certain interests in rental real estate – including interests in mixed-use property – are allowed to be treated as a trade or business for purposes of the…