For years, IRS audit rates have been declining as Congress has cut the IRS budget and its workforce has shrunk. The agency has relapsed its audit statistics for 2017, which marked the sixth consecutive year that audit rates have gone down.
The number of people audited by the IRS in 2016 dropped to just over 1 million. The last time so few people were audited was 2004. Since then, the U.S. has added about 30 million people. Read More
On the hunt for free money for your small business? Government grants are one source. But funding from Uncle Sam isn’t as easy to come by as you might think. Find out who is eligible for government grants for small business and how to find and apply for grants.
Which Businesses Are Eligible For Government Grants?
Essentially, the source of grant funding comes from tax money allocated through the legislative and executive branches of government. As a result, a limited number of government grants are available and only to select business types. Read More
An income statement is an important document for your company’s financial health. Yet, many small business owners stumble when preparing it. Read on for help in preparing your own income statement.
What Is An Income Statement?
An income statement is a report of revenues generated and expenses incurred by your business. It’s most commonly recorded over the course of a year, a month or a quarter. This statement is sometimes called a Profit and Loss statement because the report arrives at a net profit or loss. Read More
Small businesses with employees must withhold some of every employee’s paycheck to pay taxes to the government. At the top of the list are federal, state and local income taxes. Plus, the employer is also responsible for federal and state unemployment taxes, and their share of FICA taxes.
Additional taxes include the employee’s share of Social Security and Medicare taxes that make up the FICA contributions.
Now, a payroll provider could handle this withholding for you. This way, you never forget to withhold the correct amount from employee paychecks. Read More
Tax season is the collective groan heard around the world. We get it. No one enjoys filing their taxes, even when they turn preparation over to a skilled professional. If you’re doing your taxes right, managing your small business taxes should be a year-round process.
Keeping up to date in real-time makes the effort come tax season exponentially easier. But if you’re not staying on top of things, you could make these five common tax mistakes for small businesses. Read More
If your interview was during 2017 (or earlier) and for a job in the same line of work, your mileage expenses and other expenses are deductible. You can use the standard mileage rate (53.5 cents per mile for 2017) to figure your expenses.
Thus, if you drove 1,300 miles, your driving expense is $6,995. But you may take this deduction only if you itemize your personal deductions on your tax return. Read More
The Tax Cuts and Jobs Act enacted by Congress last year made major changes to the longstanding deductions for business-related entertainment and meal expenses. Starting in 2018, most business-related entertainment expenses are not deductible. However, the deductibility of certain meals is unclear.
Continue to find out what entertainment expenses are allowable tax deductions moving forward.
Entertainment Read More
The Tax Cuts and Jobs Act (H.R. 1, “TCJA”) has is now law. The law contains many provisions affecting both individuals and small businesses. The main provisions affecting businesses are summarized below. Except where otherwise noted, these changes apply to after January 1, 2018. Thus, they do not apply to your 2017 taxes and your upcoming tax return.
What’s The New Corporate Tax Rate?
The cornerstone of the TCJA is a new lower rate for regular C corporations. C corporations are separate taxpaying entities with their own tax rates. Under the TCJA all C corporations are subject to single flat tax rate of 21 percent. The previous tax rates ranged from 15 percent to 35 percent. Read More
When you use your car for business there are two ways to calculate your deduction: using the standard mileage rate or the actual expense method. The standard mileage rate method has remained the same and your miles are worth more in 2018. But, let’s go over how the actual expense method has changed.
Standard Mileage Rate Vs. Actual Expense Method
Most people use the standard mileage rate because it’s easier and simpler. All you do is keep track of your business mileage and deduct a set amount for each business mile. Read More
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
If you owe the IRS taxes and have a substantial outstanding balance, there are several legal means the government uses to get those past due taxes paid. Continue reading to find out how this may impact you and your future travel plans.
The IRS and State Department have begun implementing a law passed back in 2015 that requires the State Department to deny passports to taxpayers who owe the IRS more than $51,000 in back taxes, penalties, and interest. Taxpayers who owe this much won’t be issued a new passport or get old passports renewed if the IRS has filed a Notice of Federal Tax Lien and the period to challenge it has expired or the IRS has issued a levy. Read More
The Tax Cuts and Jobs Act (“TCJA”) has resulted in many changes in the tax laws. One little-noticed change affects trade-ins of vehicles uses for business. Let’s go over the tax changes for business vehicle trade-ins.
Old Tax Law: Tax-Deferred Exchange of Trade-In Business Car
Until 2017, you could do a tax-deferred exchange of a business vehicle. This was also called a Section 1031 exchange. With such an exchange, there would be no tax due on the sale of your trade-in. Read More