How entrepreneurs must treat expenses on their tax returns

Have you recently started a new business or are you contemplating starting one? Keep in mind that not all start-up expenses can be deducted on your federal tax return right away. Some expenses probably must be amortized over time. You might be able to make an election to deduct up to $5,000 currently, but the deduction is reduced by the amount by which your total start-up costs exceed $50,000. You can also deduct $5,000 of the organizational costs of creating a corporation or partnership. Contact us. We can help you maximize deductions for a start-up business.

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2019 – 04/23 – Casualty loss deductions: You can claim one only for a federally declared disaster

The rules for writing off personal casualty losses on a tax return have changed for 2018 to 2025. Specifically, taxpayers generally can’t deduct losses unless the casualty event qualifies as a federally declared disaster. (The rules for business or income-producing property are different.) Another factor that now makes it harder to claim a casualty loss is that you must itemize deductions to claim one. For 2018 to 2025, fewer people will itemize, because the standard deduction amounts have been significantly increased. We can help you navigate the complex rules.

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Three questions you may have after you file your return

After filing a tax return, you may have questions. 1. Where’s my refund? Go to irs.gov and click on “Refund Status” to find out. 2. How long must I save tax records? You should generally save them for 3 years after filing (although keep the actual returns indefinitely). But there are exceptions to this general rule. 3. If I forgot something on my return, can I still claim a refund? You can generally file an amended return to claim a refund within 3 years after the date you filed the original return or 2 years of the date you paid the tax, whichever is later.

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Deducting business meal expenses under today’s tax rules

You probably spend a bundle “wining and dining” customers, vendors and employees. Under current tax law, entertainment expenses are no longer deductible. But you can still deduct 50% of the cost of business-related food and beverages, if you meet certain requirements. What if you buy food and beverages at an entertainment event? You can still deduct 50% of the expenses incurred at entertainment events, but only if business was conducted during the event or shortly before or after. And keep receipts that separately state the meal costs. Contact us with questions.

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Divorcing business owners need to pay attention to tax implications

If you’re getting a divorce, you know it’s a highly stressful time. But if you’re a business owner, tax issues can complicate matters more. For example, you can generally divide most assets, including business ownership interests, between you and your soon-to-be ex-spouse without any federal income or gift tax consequences. When an asset falls under the tax-free transfer rule, the spouse who receives the asset takes over its existing tax basis and existing holding period. Contact us 502-454-2755. We can help minimize the adverse tax consequences of settling your divorce.

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Understanding how taxes factor into an M&A transaction

If your company is merging with or acquiring another business, it’s important to understand how the transaction will be taxed. For tax purposes, a transaction can basically be structured in two ways: stock (or ownership interest) or assets. For tax and nontax reasons, buyers usually prefer to purchase assets, while sellers generally prefer stock sales. Buying or selling a business may be the most important deal you’ll ever make, so seek professional tax advice as you negotiate. After a deal is done, it may be too late to get the best tax results. Contact us first 502-454-2755.

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2019 Q2 tax calendar: Key deadlines for businesses and other employers

Here are a few key tax deadlines for businesses during Q2 of 2019. APR. 1: File with the IRS if you’re an employer that will electronically file 2018 Forms 1097, 1098, certain Forms 1099 and/or Form W-2G. APR. 15: If you’re a calendar-year corporation, file a 2018 income tax return (Form 1120) or file for a six-month extension (Form 7004) and pay any tax due. APR. 30: Employers report income tax withholding and FICA taxes for Q1 2019 (Form 941) and pay any tax due. Contact us to learn more about filing requirements and ensure you meet all applicable deadlines.

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