While many businesses have been forced to close due to the COVID-19 pandemic, some entrepreneurs have started new businesses. Many of these people start out operating as sole proprietors. Here are some tax rules and considerations involved in operating with that type of entity. The Pass-through Deduction To the extent your business generates qualified business…
The House and Senate passed the American Rescue Plan Act (ARP) and the President signed it into law on March 11, 2020. This bill includes many provisions that have major tax impacts for 2020 and 2021 tax returns. 2020 Tax-free Unemployment Benefits The bill provides a $300 weekly federal unemployment benefit through Sept. 6, 2021,…
The Right Entity Choice: Should You Convert From a C Corporation to an S Corporation? The best choice of entity can affect your business in several ways, including the amount of your tax bill. In some cases, businesses decide to switch from one entity type to another. Although S corporations can provide substantial tax…
QBI deduction basics and a year-end tax tip that might help you qualify If you own a business, you may wonder if you’re eligible to take the qualified business income (QBI) deduction. Sometimes this is referred to as the pass-through deduction or the Section 199A deduction. The QBI deduction: Is available to owners…
Cash in on depreciation tax savers As we approach the end of the year, it’s a good time to think about whether your business needs to buy business equipment and other depreciable property. If so, you may benefit from the Section 179 depreciation tax deduction for business property. The election provides a tax windfall…
The importance of S corporation basis and distribution elections S corporations can provide tax advantages over C corporations in the right circumstances. This is true if you expect that the business will incur losses in its early years because shareholders in a C corporation generally get no tax benefit from such losses. Conversely, as…
Health Savings Accounts forYour Small Business Small business owners are well aware of the increasing cost of employee health care benefits. As a result, your business may be interested in providing some of these benefits through an employer-sponsored Health Savings Account (HSA). Or perhaps you already have an HSA. It’s a good time to…
Do you want to withdraw cash from your closely held corporation at a low tax cost? Owners of closely held corporations are often interested in easily withdrawing money from their businesses at the lowest possible tax cost. The simplest way is to distribute cash as a dividend. However, a dividend distribution isn’t tax-efficient, since…
Tax responsibilities if your business is closing amid the pandemic Unfortunately, the COVID-19 pandemic has forced many businesses to shut down. If this is your situation, we’re here to assist you in any way we can, including taking care of the various tax obligations that must be met. Of course, a business must file a…
New business? It’s a good time to start a retirement plan If you recently launched a business, you may want to set up a tax-favored retirement plan for yourself and your employees. There are several types of qualified plans that are eligible for these tax advantages: A current deduction from income to the employer for contributions…