If your business is organized as a sole proprietorship or as a wholly owned limited liability company (LLC), you are subject to both income tax and self-employment tax. There may be a way to cut your tax bill by conducting business as an S corporation. Fundamentals...
Many businesses use independent contractors to help keep their costs down. If you are among them, make sure these workers are properly classified for federal tax purposes. If the IRS reclassifies them as employees, it can be a costly error. It can be complex to determine...
President Biden recently announced his $1.8 trillion American Families Plan (AFP), the third step in his Build Back Better policy initiative. The announcement followed the previous releases of the proposed $2.3 trillion American Jobs Plan and the Made in America Tax Plan. These plans propose...
Many businesses provide education fringe benefits so their employees can improve their skills and gain additional knowledge. An employee can receive, on a tax-free basis, up to $5,250 each year from his or her employer for educational assistance under a ‘qualified educational assistance program.’ For this...
Are you wondering whether alternative energy technologies can help you manage energy costs in your business? If so, there is a valuable federal income tax benefit (the business energy credit) that applies to the acquisition of many types of alternative energy property. The credit is intended...
Owners of incorporated businesses know there is a tax advantage to taking money out of a C corporation as compensation rather than as dividends. The reason: A corporation can deduct the salaries and bonuses that it pays executives but not dividend payments. Thus, if funds...
Are you thinking about setting up a retirement plan for yourself and your employees, but you are worried about the financial commitment and administrative burdens involved in providing a traditional pension plan? Two options to consider are a ‘simplified employee pension’ (SEP) or a ‘savings...
As a business owner, you should be aware that you can save family income and payroll taxes by putting your child on the payroll. Here are some considerations. Shifting Business Earnings You can turn some of your high-taxed income into tax-free or low-taxed income by shifting some...
Are you considering buying or replacing a vehicle that you will use in your business? If you choose a heavy sport utility vehicle (SUV), you may be able to benefit from lucrative tax rules for those vehicles. Bonus Depreciation Under current law, 100 percent first-year bonus depreciation...
Are you thinking about launching a business with some partners and wondering what type of entity to form? An S corporation may be the most suitable form of business for your new venture. Here is an explanation of the reasons why. The biggest advantage of an...