Archive for Business Tax

Business Or Hobby, What Is The Difference?

Maybe you cater for your friends, maybe you make jewelry, maybe you sell your artwork, maybe you have a lemonade stand- regardless of what you do, do you know how the IRS views this? Here are some tips on how to tell if your activity is a business or a hobby and the tax implications of each.

1. The IRS has a checklist for determining if your activity is a business or hobby. The list is basically intent. Is this for fun or do you intend to make a profit? Do you want to depend on the income? What is the intent of your activity?

For the IRS list that discusses the difference between a business and a hobby click here.

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Written by | Posted in Business Tax • Deductions

What Is An Accountable Plan For Reimbursements And Business Taxes?

Reimbursements for expenses like mileage can be taxable for employees depending on if your business has an accountable plan. Let’s go over what an accountable plan is and the impact it can have on your business taxes.

What Does An Accountable Plan Mean?

An accountable plan is a system for handling your reimbursements or allowances for employees. It must satisfy the following requirements:

  • There’s a business connection
  • Employees provide some form of substantiation
  • Employees return excess amounts

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Written by | Posted in Accountable Planning • Business Tax • Mileage • MILEIQ