Recent News & Blog / Business Tax
Coordinating Sec. 179 tax deductions with bonus depreciation
Your business should generally maximize current year depreciation write-offs for newly acquired assets. Two federal tax breaks can help achieve this goal: first-year Section 179 depreciation deductions and first-year bonus depreciation deductions. These deductions can potentially allow businesses to write off some or all of their qualifying expenses in Year 1. Contact the CPAs and business tax advisors at SEK for more information on tax deductions and for more tax tips.
Bartering is a taxable transaction even if no cash is exchanged
If your small business is strapped for cash (or likes to save money), you may find it beneficial to barter for goods and services. Bartering isn’t new, but the internet has made it easier. However, if your business barters, be aware that the fair market value of goods you receive is taxable income. And if you exchange services with another business, the transaction results in taxable income for both parties. Contact the CPAs and business tax advisors at SEK if you’d like assistance or more tax tips.
Maximize the QBI deduction before it’s gone
The qualified business income (QBI) deduction is available to eligible businesses through 2025. After that, it’s scheduled to disappear unless Congress acts to extend it. Contact the CPAs and business tax advisors at SEK for your questions and more tax tips.
The election to apply the research tax credit against payroll taxes
The credit for increasing research activities is a valuable tax break for eligible businesses. To qualify for the election a taxpayer: 1) must have gross receipts for the election year of less than $5 million, and 2) be no more than five years past the period for which it had no receipts (the start-up period). Contact the CPAs and business tax advisors at SEK for more information and tax tips.
5 ways to withdraw cash from your corporation while avoiding dividend treatment
If you want to withdraw cash from your closely held corporation at a low tax cost, the easiest way is to distribute cash as a dividend. However, keep in mind that a dividend distribution is taxable to you as a shareholder but it’s not deductible by the corporation. Thankfully, there are some alternatives that may allow you to withdraw cash from a corporation and avoid dividend treatment. Contact the CPAs and business tax advisors at SEK if you’re interested in discussing these or for other tax tips.
Taking your spouse on a business trip? Can you write off the costs?
If you own a business, you may wonder if you can deduct the costs of having your spouse accompany you on business trips. If your spouse isn’t an employee, you can still deduct the costs of driving your own car or renting one to reach your destination. Contact the CPAs and business tax advisors at SEK for more questions and tips to get the most out of your tax return.
What’s the best accounting method route for business tax purposes?
Businesses basically have two accounting methods to figure their taxable income: cash and accrual. The cash method often provides significant tax benefits for eligible businesses, though some may be better off using the accrual method. Contact the CPAs and business tax advisors at SEK to learn more about your small business tax.
9 tax considerations if you’re starting a business as a sole proprietor
When launching a business, many entrepreneurs start out as sole proprietors. If you’re launching a venture as a sole proprietorship, you need to understand the tax issues involved. You must pay self-employment taxes and make estimated tax payments on income earned. Contact the CPA's and business tax advisors at SEK if you want more information about the tax implications of running your business.
Update on IRS efforts to combat questionable Employee Retention Tax Credit claims
The Employee Retention Tax Credit (ERTC) provided cash that helped struggling businesses retain employees during the pandemic in 2020 and 2021. The IRS reports that it has received a deluge of “questionable” ERTC claims on amended tax returns. The IRS has now created a Voluntary Disclosure Program that allows businesses to pay back money they received after filing erroneous claims. Contact the CPA's and business tax advisors at SEK for help and to answer your tax questions.
Should your business offer the new emergency savings accounts to employees?
As part of the SECURE 2.0 law, there’s a new benefit option for employees facing emergencies. It’s called a pension-linked emergency savings account (PLESA) and it became effective for plan years beginning Jan. 1, 2024. Employers with 401(k), 403(b) and 457(b) plans can opt to offer PLESAs to non-highly compensated employees. Contact the CPA's and business tax advisors at SEK for more information and to answer your tax questions.