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Attempts to claim write-offs for bad debt losses have fueled controversies with the IRS for many years. Unfortunately, bad debt losses are increasingly common during the COVID-19 pandemic. Here’s an overview of the federal income tax treatment of these losses. The Basics The IRS is always skeptical when taxpayers claim deductions for bad debt losses.… Continue reading →

The following table provides some important federal tax information for 2021, as compared with 2020. Some of the dollar amounts are unchanged and some changed only slightly due to inflation. Social Security/ Medicare 2021 2020 Social Security Tax Wage Base $142,800 $137,700 Medicare Tax Wage Base No limit No limit Employee portion of Social Security… Continue reading →

Restaurants have struggled mightily during the COVID-19 pandemic. Thankfully, they’re specifically targeted for a new tax relief measure found in the massive Consolidated Appropriations Act (CAA), which became law on December 27, 2020. The new provision creates a temporary but meaningful tax incentive to spend more on business-related food and beverage costs. Preexisting tax breaks for… Continue reading →

Unfortunately, many businesses have already been forced to close their doors due to the economic fallout from COVID-19, and more will surely follow. Closing a business has important federal income tax implications that owners should understand. Here’s what owners of sole proprietorships and single-member (one-owner) limited liability companies (SMLLCs) need to know. Tax Treatment Depends… Continue reading →

Many small business owners are looking forward to the end of 2020. It has been a year of significant hardship and stress. But staying afloat remains a daunting challenge in 2021. Here are 16 ideas to help reduce costs without sacrificing quality in the new year. 1. Encourage remote work. Remote working arrangements may have been… Continue reading →

Small business owners still have time to make tax planning moves to lower their 2020 federal income tax bills—and possibly lay the groundwork to save taxes in future years. Here are 10 ideas for small businesses to consider. Claim Bonus Depreciation for 2020 Asset Additions Thanks to the Tax Cuts and Jobs Act (TCJA), 100% first-year… Continue reading →

Under today’s federal income tax rules, your business may be able to claim big first-year depreciation write-offs for eligible assets that are placed in service in the current tax year. But that strategy might not be right for every small business every year. Here’s what you should know before claiming 100% first-year bonus depreciation or… Continue reading →

The second half of 2020 has begun. What steps can small business owners take today to lower taxes for the current tax year? Alternatively, would it make more sense to maximize taxable income this year if you expect higher income and/or unfavorable changes to the tax law starting in 2021? Uncertain Times These are tough questions given today’s… Continue reading →

If you’re a business owner, do you have a plan in place that names who’ll follow you as head of your company? You may feel you’re too busy running the business today to waste time on long-term plans that seem so distant. But there may be more reasons than you think to make decisions, some… Continue reading →

For some employees, working from home is a personally liberating experience that contributes to greater productivity. For others, not so much. By now, if you have had a significant number of employees doing their jobs from home, you may have enough experience to assess whether remote working arrangements are a net plus for your business.… Continue reading →