Business Tax Tips

Deductible Business Expenses For an expense to be deductible, it must be both ordinary (common and accepted in your industry) and necessary (helpful and appropriate for your business). Here’s a comprehensive list: ADVERTISING & MARKETING Fully Deductible: VEHICLE & TRANSPORTATION Two Methods Available: Standard Mileage Rate: Actual Expense Method: Additional Transportation Deductions: TRAVEL EXPENSES Deductible…

Quarterly estimated taxes are one of the most confusing aspects of business ownership, yet they’re critical to avoid penalties and cash flow surprises. Let me break down everything you need to know. Who Must Pay Estimated Taxes? You must pay estimated taxes if BOTH of these apply: Common situations requiring estimated payments: Who doesn’t need…

The Qualified Business Income (QBI) deduction, established under Section 199A of the tax code, allows eligible business owners to deduct up to 20% of their qualified business income from pass-through entities (S Corps, partnerships, sole proprietorships, LLCs). This can result in significant tax savings but involves complex calculations and tradeoffs. Basic QBI Deduction Rules The…

A backdoor Roth IRA is a legal strategy that allows high-income earners to contribute to a Roth IRA despite exceeding the income limits for direct Roth IRA contributions. How It Works The process involves two steps: The key advantage is that if you convert immediately after contributing (before any earnings accumulate), you pay little to…

Once you have chosen to form a separate entity for your business to protect yourself from liability and make use of the tax advantages, then the only decision left is whether to form an LLC or an S Corp.  This information will show you the primary differences, and then help you decide which form fits…

Overview: Why Business Sales Are Complex Selling a business is one of the most significant tax events you’ll face as a business owner. The tax consequences vary dramatically based on how the sale is structured, what type of entity you operate, and how the purchase price is allocated among different asset categories. What Gets Taxed…

Overview of Retirement Plan Options Business owners have several retirement plan choices, each with different contribution limits, administrative complexity, and suitability depending on business size and structure. Types of Plans 1. SEP IRA (Simplified Employee Pension) Best for: Self-employed individuals, small businesses with few or no employees, businesses with variable income Key Features: Employee Eligibility:…

Standard Business Meal Deduction The general rule is that business meals are 50% deductible when they meet these requirements: Employee Meals vs. Client/Business Meals Regular employee meals (50% deductible): Office snacks and meals for employees (50% deductible in most cases): However, there’s a key exception for 100% deductibility: 100% Deductible Meal Situations Meals are fully…

What is the R&D Tax Credit? The Research and Development (R&D) tax credit, officially known as the Credit for Increasing Research Activities under Internal Revenue Code Section 41, is a federal tax incentive designed to reward companies that invest in innovation, research, and development activities within the United States. It’s one of the most valuable…