Business Tax Tips

What is Cost Segregation? Cost segregation is a tax strategy that assesses various components of a building or property and categorizes them based on their depreciation periods. The standard depreciation period for real estate is 39 years for commercial properties and 27.5 years for residential rental properties. However, many building components depreciate at a faster…

What is the Augusta Rule? The Augusta Rule, codified in Section 280A(g) of the Internal Revenue Code, allows business owners to rent their home to their business for up to 14 days per year. The rental income you receive is tax-free, and your business can write off the expense. The name “Augusta Rule” is unofficial…

What is an Accountable Plan? An accountable plan is a reimbursement arrangement where a business reimburses employees (including owner-employees) for legitimate business expenses without those reimbursements being treated as taxable income. When done correctly, the business gets a tax deduction for the reimbursement, and the employee receives the money tax-free—no income tax, no Social Security/Medicare…

Overview California’s Pass-Through Entity Tax (PTET) allows qualifying pass-through entities to pay an entity-level state tax of 9.3% on income, with qualified taxpayers receiving a credit for their share of the entity-level tax that reduces their California personal income tax. This was created as a workaround to the federal SALT deduction cap. How PTET Works…

Tracking and Recording Requirements What counts as business use: What doesn’t count: Exception: If you have a qualified home office as your principal place of business, driving from home to other business locations becomes deductible business mileage. Required documentation: Ownership Requirements The vehicle does NOT need to be owned by the business. You can deduct…

The home office deduction allows you to deduct certain home expenses when you use part of your home regularly and exclusively for business purposes. Qualification Requirements You qualify if you meet these tests: Regular and Exclusive Use Test – The space must be used regularly and exclusively for business. You can’t use the same room…