Weekly Tax Brief
Tax-free fringe benefits help small businesses and their employees
- Published: 30 October 2018 30 October 2018
In today’s tightening job market, to attract and retain the best employees, small businesses need to offer not only competitive pay, but also appealing fringe benefits. Examples include many types of insurance (health, disability, long-term care, life) and assistance plans (dependent care, adoption and educational), subject to certain limits. The tax treatment of some benefits, such as moving expense reimbursements and transportation benefits, has changed under the TCJA. Contact us to learn more.
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Could a cost segregation study help you accelerate depreciation deductions?
- Published: 16 October 2018 16 October 2018
Businesses that acquire, construct or substantially improve a building should consider a cost segregation study. It combines accounting and engineering techniques to identify building costs that are properly allocable to tangible personal property rather than real property. This may allow you to accelerate depreciation deductions, thus reducing taxes and boosting cash flow. And the potential benefits are now even greater due to enhancements to certain depreciation-related breaks under the TCJA. Contact us for help assessing the potential tax savings.
Read more: Could a cost segregation study help you accelerate depreciation deductions?
The tax deduction ins and outs of donating artwork to charity
- Published: 12 October 2018 12 October 2018
If you collect art, appreciated artwork can make one of the best charitable gifts from a tax perspective. In general, donating appreciated property is doubly beneficial because you can both enjoy a valuable tax deduction and avoid the capital gains taxes you’d owe if you sold the property. The extra benefit from donating artwork comes from the fact that the top long-term capital gains rate for art is 28%, as opposed to 20% for most other appreciated property. To maximize your deduction, plan your gift carefully and follow all the rules. Contact us to learn more.
Read more: The tax deduction ins and outs of donating artwork to charity
Businesses aren’t immune to tax identity theft
- Published: 08 October 2018 08 October 2018
Tax identity theft may seem like a problem only for individuals. But increasingly businesses are becoming victims. Business tax identity theft occurs when a criminal uses information from a business (such as the Employer Identification Number) to obtain tax benefits or enable individual tax identity theft schemes. Here are some prevention tips: 1) Educate employees on how to spot tax fraud schemes. 2) Use secure methods to send W-2 forms to employees. 3) Implement risk management strategies designed to flag suspicious communications. Contact us to learn more.
Be sure your employee travel expense reimbursements will pass muster with the IRS
- Published: 05 October 2018 05 October 2018
Does your business reimburse employees’ work-related travel expenses? If you do, you know that it can help attract and retain employees. If you don’t, you may want to start. Changes under the TCJA make such reimbursements even more attractive to employees: Employees are no longer allowed to deduct such expenses. Travel reimbursements also come with tax benefits, but only if you follow a method that passes muster with the IRS. To learn more, contact us. We can help you determine whether you should reimburse such expenses and which method is right for you.
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2018 Q4 tax calendar: Key deadlines for businesses and other employers
- Published: 01 October 2018 01 October 2018
Here are a few key tax-related deadlines for businesses and other employers during Quarter 4 of 2018. Keep in mind that this isn't all-inclusive, so there may be additional deadlines that apply to you. Contact us for more about the filing requirements and to ensure you're meeting all applicable deadlines.
- If a calendar-year C corporation that filed an automatic six-month extension:
- File a 2017 income tax return (Form 1120) and pay any tax, interest and penalties due.
- Make contributions for 2017 to certain employer-sponsored retirement plans.
- Report income tax withholding and FICA taxes for third quarter 2018 (Form 941) and pay any tax due. (See exception below under “November 13.”)
- Report income tax withholding and FICA taxes for third quarter 2018 (Form 941), if you deposited on time and in full all of the associated taxes due.
- If a calendar-year C corporation, pay the fourth installment of 2018 estimated income taxes.
Read more: 2018 Q4 tax calendar: Key deadlines for businesses and other employers
You might save tax if your vacation home qualifies as a rental property
- Published: 28 September 2018 28 September 2018
If you own a vacation home and both rent it out and use it personally, classification as a rental property might save tax. Expenses attributable to a rental property aren’t subject to the TCJA’s tightened limits on itemized deductions for property tax and mortgage interest, and losses may be deductible. A rental property generally is one you use for 14 days or less, or under 10% of the days you rent it out, whichever is greater. Adjusting use between now and year end can ensure it’s classified as a rental property. Contact us for details.
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How to reduce the tax risk of using independent contractors
- Published: 25 September 2018 25 September 2018
Classifying a worker as an independent contractor frees a business from payroll tax liability and responsibility for withholding income taxes and the worker’s share of payroll taxes. But if the IRS reclassifies a worker as an employee, your business could be hit with back taxes, interest and penalties. Contact us to learn more.
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Back-to-school time means a tax break for teachers
- Published: 21 September 2018 21 September 2018
When elementary and secondary school teachers are setting up their classrooms for the new school year, it’s common for them to pay for some classroom supplies out of pocket. A special tax break allows these educators to take an above-the-line deduction for up to $250 of these expenses. The deduction is especially important now due to the TCJA’s suspension of miscellaneous itemized deductions subject to the 2% of adjusted gross income floor, which before 2018 could be used for educator expenses. Contact us for details on the educator expense deduction.
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Keep it SIMPLE: A tax-advantaged retirement plan solution for small businesses
- Published: 17 September 2018 17 September 2018
If your small business doesn’t have a retirement plan and has 100 or fewer employees, consider a SIMPLE IRA. Offering a retirement plan can provide your business with valuable tax deductions for its contributions and help attract and retain employees. As the name implies, a SIMPLE IRA is easy to set up and maintain. Eligible employees can defer up to $12,500 in 2018 (plus a catch-up of up to $3,000 for those age 50 or older). The deadline for setting one up for this year is Oct. 1, 2018. Contact us to learn more about SIMPLE IRAs and other retirement plan options.
Read more: Keep it SIMPLE: A tax-advantaged retirement plan solution for small businesses