Weekly Tax Brief

Now’s the time to review your business expenses

Details: Published: 05 November 2018 05 November 2018

As we approach the end of the year, it’s a good idea to review your business’s expenses for deductibility. At the same time, consider whether you’d benefit from accelerating certain expenses into this year. There’s no master list of deductible business expenses in the Internal Revenue Code (IRC). Some deductions are expressly authorized or excluded, but most are governed by the general rule of IRC Sec. 162, which permits businesses to deduct their “ordinary and necessary” expenses. Also, the TCJA reduces or eliminates many deductions. Contact us to learn more.

Tax-free fringe benefits help small businesses and their employees

Details: 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.

Could a cost segregation study help you accelerate depreciation deductions?

Details: 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.

The tax deduction ins and outs of donating artwork to charity

Details: 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.

Businesses aren’t immune to tax identity theft

Details: 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

Details: 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.

2018 Q4 tax calendar: Key deadlines for businesses and other employers

Details: 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.

October 15

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.

October 31

Report income tax withholding and FICA taxes for third quarter 2018 (Form 941) and pay any tax due. (See exception below under “November 13.”)

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.

December 17

If a calendar-year C corporation, pay the fourth installment of 2018 estimated income taxes.

You might save tax if your vacation home qualifies as a rental property

Details: 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.

How to reduce the tax risk of using independent contractors

Details: 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.

Back-to-school time means a tax break for teachers

Details: 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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