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Category Archives: Business Income & Expense

Maximizing depreciation deductions in an uncertain tax environment

By Legacy Protection, LLP |

For assets with a useful life of more than one year, businesses generally must depreciate the cost over a period of years. Special breaks are available in some circumstances, but uncertainty currently surrounds them: Section 179 expensing. This allows you to deduct, rather than depreciate, the cost of purchasing eligible assets. Currently the expensing… Read More »

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2 benefits-related tax credits just for small businesses

By Legacy Protection, LLP |

Tax credits reduce tax liability dollar-for-dollar, making them particularly valuable. Two valuable credits are especially for small businesses that offer certain employee benefits. Can you claim one — or both — of them on your 2015 return? Retirement plan credit Small employers (generally those with 100 or fewer employees) that create a retirement plan may… Read More »

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Deduction for Domestic Production

The “manufacturers’ deduction” isn’t just for manufacturers

By Legacy Protection, LLP |

The Section 199 deduction is intended to encourage domestic manufacturing. In fact, it’s often referred to as the “manufacturers’ deduction.” But this potentially valuable tax break can be used by many other types of businesses besides manufacturing companies. Sec. 199 deduction 101 The Sec. 199 deduction, also called the “domestic production activities deduction,” is… Read More »

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Bonus

Can you pay bonuses in 2017 but deduct them this year?

By Legacy Protection, LLP |

You may be aware of the rule that allows businesses to deduct bonuses employees have earned during a tax year if the bonuses are paid within 2½ months after the end of that year (by March 15 for a calendar-year company). But this favorable tax treatment isn’t always available. For one thing, only accrual-basis taxpayers can take advantage… Read More »

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There’s still time to benefit on your 2016 tax bill by buying business assets

By Legacy Protection, LLP |

In order to take advantage of two important depreciation tax breaks for business assets, you must place the assets in service by the end of the tax year. So you still have time to act for 2016. Section 179 deduction The Sec. 179 deduction is valuable because it allows businesses to deduct as depreciation… Read More »

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Time

Are you timing business income and expenses to your tax advantage?

By Legacy Protection, LLP |

Typically, it’s better to defer tax. One way is through controlling when your business recognizes income and incurs deductible expenses. Here are two timing strategies that can help businesses do this: Defer income to next year. If your business uses the cash method of accounting, you can defer billing for your products or services. Or,… Read More »

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Success Key Concept

Documentation is the key to business expense deductions

By Legacy Protection, LLP |

If you have incomplete or missing records and get audited by the IRS, your business will likely lose out on valuable deductions. Here are two recent U.S. Tax Court cases that help illustrate the rules for documenting deductions. Case 1: Insufficient records In the first case, the court found that a taxpayer with a… Read More »

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Travel

Combining business and vacation travel: What can you deduct?

By Legacy Protection, LLP |

If you go on a business trip within the United States and tack on some vacation days, you can deduct some of your expenses. But exactly what can you write off? Transportation expenses Transportation costs to and from the location of your business activity are 100% deductible as long as the primary reason for… Read More »

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Business Loss

To deduct business losses, you may have to prove “material participation”

By Legacy Protection, LLP |

You can only deduct losses from an S corporation, partnership or LLC if you “materially participate” in the business. If you don’t, your losses are generally “passive” and 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. Material… Read More »

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Watermelon

Throw a company picnic for employees this summer and enjoy larger deductions

By Legacy Protection, LLP |

Many businesses host a picnic for employees in the summer. It’s a fun activity for your staff and you may be able to take a larger deduction for the cost than you would on other meal and entertainment expenses. Deduction limits Generally, businesses are limited to deducting 50% of allowable meal and entertainment expenses…. Read More »

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