BUSINESS ISSUES & TIPS

• Posted on September 28, 2010

This section includes frequently encountered topics relating to small businesses. It discusses business deductions, how to avoid underpayment penalties, 1099s and much more.

New Breaks for Small Businesses

• Posted on September 27, 2010

The 2010 Small Business Jobs Act, enacted September 27, 2010, and the Tax Reform Act of 2010, signed into law December 17, 2010, include an assortment of incentives and tax breaks for small businesses.  The following is a brief overview of some of the key provisions included in these new laws. 

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Determining Vehicle Business Use

• Posted on May 19, 2008

How does a taxpayer who uses his or her vehicle partly for business determine what portion of the vehicle’s operating expenses can be deducted for business use?  According to tax regulations, business use is determined by the number of miles traveled between two business locations. 
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Plan for Auto Deductions

• Posted on May 15, 2008

When you use a vehicle for business purposes, the business portion of the operating expenses can be deducted on your self-employed business or, if you are an employee as a miscellaneous itemized deduction. (If you are an employee, you may claim the deduction only if using your own vehicle is a condition of your employment and doing so is for your employer’s convenience.) The tax code provides two possible options for computing the deduction: using the standard mileage rate or using actual expenses.
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Husband and Wife Joint Ventures

• Posted on May 19, 2008

A married couple that owns a joint business venture in which they both participate can elect to file two self-employed business schedules (Schedule C or Schedule F) on their personal income tax return, dividing the income and expenses instead of filing a partnership return.
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Lunch as a Business Expense

• Posted on May 19, 2008

Many individuals spend time away from their offices while calling on customers and vendors. As a result, they end up having to buy their lunch and want to deduct the cost of that lunch as a business expense.
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Use Like-Kind Exchanges to Defer Taxes

• Posted on May 19, 2008

Whenever you sell business or investment property and you have a gain, you generally have to pay tax on the gain at the time of sale. However, the tax code provides an exception and allows you to postpone paying tax on the gain if you reinvest the proceeds in similar property as part of a qualifying like-kind exchange. These type of exchanges are commonly referred to as Sec. 1031 exchanges (referring to the tax code section that allows them), but it is important to understand that the tax on the gain is deferred and is not tax-free.
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Disposing of Business Assets

• Posted on May 16, 2008

Many taxpayers fail to understand the tax ramifications of disposing of personal property such as equipment, furniture and autos used in business and end up with unpleasant surprises at tax time. The tax consequences depend upon how the property was used, how long it was owned and the method of disposition. There are numerous ways of disposing of an asset, such as selling, scrapping, converting to personal use, contributing to a charity, exchanging for another like business item, or even giving it away. We cannot cover all of the aspects of dispositions here but we can give you an overview.
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Employers Beware – Misclassifying Workers

• Posted on May 19, 2008

The Internal Revenue Service has developed a new form for employees who have been misclassified as independent contractors by their employers. Form 8919, Uncollected Social Security and Medicare Tax on Wages, will now be used to figure and report the employee’s share of uncollected social security and Medicare taxes due on their compensation.
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Charitable Contributions in a Self-Employed Business

• Posted on May 19, 2008

Generally, for self-employed individuals, charitable contributions are not deductible on Schedule C as a business expense and can only be deducted as an itemized deduction on Schedule A. However, tax regulations state that transfers to a charity that are directly related to a taxpayer's business and are made with a “reasonable expectation of financial return commensurate with” the amount transferred may be deductible as a business expense.
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How to Avoid Common Business Mistakes

• Posted on May 16, 2008

It is not uncommon for business owners to become so involved with their day-to-day operations that they overlook some important issues associated with being in business. Here are some tips to help you avoid making costly mistakes and to ensure that your business runs smoothly.
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