CSG has steadily grown to take the worry out of navigating America’s tax laws for the businesses that we represent and we know that keeping up with industry standards and ever-changing tax accounting practices can be a full-time job. That’s why our clients rely on us to adeptly handle their tax accounting needs. We always want to ensure you’re receiving the most up-to-date information regarding tax laws that may affect your business. Check out some of our articles and our downloadable content below!
(Jump to our Downloads/PDF Section)
Have you recently started a new business or are you contemplating starting one? Keep in mind that not all start-up expenses can be deducted on your federal tax return right away. Some expenses probably must be amortized over time. You might be able to make an election to deduct up to $5,000 currently, but the deduction is reduced by the amount by which your total start-up costs exceed $50,000. You can also deduct $5,000 of the organizational costs of creating a corporation or partnership. Contact us. We can help you maximize deductions for a start-up business. (Read More)
Recent changes to tax law and accounting rules may affect whether you decide to lease or buy equipment or other fixed assets. Many businesses that have typically leased assets are now buying them instead. Lease payments generally are deductible, but buying allows you to take advantage of expanded Section 179 and bonus depreciation deductions to potentially write off the full cost of equipment in the year it’s purchased. Also, the accounting advantages of leases generally are disappearing. (Read More)
Limited liability company (LLC) members commonly claim that their distributive shares of LLC income (after deducting compensation for services in the form of guaranteed payments) aren’t subject to self-employment (SE) tax. But the IRS has been seeking back taxes and penalties from LLC members it claims have underreported SE income, with some success in court. At the greatest risk are LLC members who are comparable to general partners in a partnership. (Read More)
The flat 21% federal income tax rate for C corporations under the Tax Cuts and Jobs Act has been great news for these entities and their owners. But some fundamental tax truths for C corporations largely remain the same. For example, although the 21% rate will lower the impact, double taxation is still an important issue to consider, especially if a C corporation owns assets that are likely to appreciate significantly. And C corporation status still generally isn’t advisable for ventures that will incur ongoing tax losses. (Read More)
Commercial buildings and improvements generally are depreciated over 39 years, which essentially means you can deduct a portion of the cost every year over the depreciation period. (Land isn’t depreciable.) But special tax breaks that allow deductions to be taken more quickly are available for certain real estate investments. Some were enhanced by the Tax Cuts and Jobs Act (TCJA) and may provide a bigger benefit when you file your 2018 tax return. But there are two breaks you may not be able to enjoy due to a drafting error in the TCJA. Contact us to learn more. (Read More)
A variety of tax-related limits affecting businesses are annually indexed for inflation, and many have increased for 2019. For example, the Section 179 expensing limit has gone up to $1.02 million from $1 million. Also up are the income-based phase-ins for certain limits on the new-last-year Sec. 199A qualified business income deduction for owners of pass-through entities. And most limits related to employer-sponsored retirement plans, such as 401(k)s, are higher this year. (Read More)
Tax planning is a year-round activity, but there are still some year-end strategies you can use to lower your 2018 tax bill. Here are six last-minute tax moves business owners should consider: 1) Postpone invoices. 2) Prepay expenses. 3) Buy equipment. 4) Use credit cards. 5) Contribute to retirement plans. 6) Qualify for the new “pass-through” deduction. These strategies are subject to various limitations and restrictions, so consult us before you implement them. We can also offer more ideas for reducing your taxes this year and next. (Read More)
Investing in business assets is a traditional and powerful year-end tax planning strategy, and it might make even more sense in 2018. Sec. 179 expensing and bonus depreciation both allow an immediate deduction for the cost of eligible asset purchases, rather than depreciating them over a number of years. The TCJA increases potential deductions under these breaks and expands the assets that are eligible. To qualify, you must place assets in service by the end of the year. So there’s still time to make purchases and reduce your 2018 taxes. (Read More)
The cash method of accounting offers greater tax-planning flexibility, allowing some businesses to defer taxable income. Under the TCJA, if your business’s average gross receipts for the previous three tax years are $25 million or less, you generally will now be eligible for the cash method for federal tax purposes, regardless of how your business is structured, your industry or whether you have inventories. Newly eligible businesses should determine whether the cash method would be advantageous and, if so, consider switching methods. (Read More)
The TCJA didn’t change the research credit, but it has an impact on the credit. Previously, corporations subject to alternative minimum tax (AMT) couldn’t offset the research credit against AMT liability, which erased the credit’s current benefits. By eliminating corporate AMT, the TCJA removed this obstacle. Pass-through businesses can still claim the credit against AMT if their average gross receipts are $50 million or less. And qualifying start-ups without taxable income can still claim the credit against up to $250,000 in payroll taxes. (Read More)
As we approach the end of the year, it’s a good idea to review your business’s expenses for deductibility. At the same time, consider whether you’d benefit from accelerating certain expenses into this year. There’s no master list of deductible business expenses in the Internal Revenue Code (IRC). Some deductions are expressly authorized or excluded, but most are governed by the general rule of IRC Sec. 162, which permits businesses to deduct their “ordinary and necessary” expenses. Also, the TCJA reduces or eliminates many deductions. (Read More)
Businesses that acquire, construct or substantially improve a building should consider a cost segregation study. It combines accounting and engineering techniques to identify building costs that are properly allocable to tangible personal property rather than real property. This may allow you to accelerate depreciation deductions, thus reducing taxes and boosting cash flow. And the potential benefit its are now even greater due to enhancements to certain depreciation-related breaks under the TCJA. Contact us for help assessing the potential tax savings. (Read More)
Classifying a worker as an independent contractor frees a business from payroll tax liability and responsibility for withholding income taxes and the worker’s share of payroll taxes. But if the IRS reclassifies a worker as an employee, your business could be hit with back taxes, interest and penalties. When assessing worker status, the IRS typically looks at the level of behavioral and financial control the business has over the worker and the relationship of the parties. Fortunately, there are strategies for minimizing your exposure. (Read More)
The S corporation business structure offers many advantages, including limited liability for owners and no double taxation (at least at the federal level). But not all businesses are eligible, and S corps may not be quite as attractive from a tax perspective as they once were. The C corp tax rate is now only 21%, while the top individual rate is 37%, so double taxation may be less of a concern. On the other hand, S corp owners may benefit from the new qualified business income (QBI) deduction, which can be equal to as much as 20% of QBI. (Read More)
The Tax Cuts and Jobs Act (TCJA) liberalized the eligibility rules for using the cash method of accounting, making this method (which is simpler than the accrual method) available to more businesses. Now the IRS has provided procedures for obtaining automatic consent to change accounting method under the TCJA. If you’re eligible for both methods, consider whether switching would be beneficial. The cash method is typically preferable, but in some cases the accrual method is advantageous. We can help you make this decision and execute the change if appropriate. (Read More)
The TCJA allows qualifying noncorporate owners of pass-through entities to deduct as much as 20% of qualified business income. But once taxable income exceeds $315,000 for married couples filing jointly or $157,500 for other filers, a wage limit begins to phase in. When the limit is fully phased in, the deduction generally can’t exceed the greater of the owner’s share of a) 50% of the amount of W- 2 wages paid to employees during the tax year, or b) the sum of 25% of W-2 wages plus 2.5% of the cost of qualified business property. (Read More)
For small businesses, managing payroll can be one of the most arduous tasks. A crucial aspect is withholding and remitting to the federal government the appropriate income and employment taxes. If your business doesn’t, you, personally, as the business’s owner, could be considered a “responsible party” and face a 100% penalty. This is true even if your business is an entity that normally shields owners from personal liability, such as a corporation or limited liability company. Hiring a payroll service can help. (Read More)
The recent U.S. Supreme Court decision in South Dakota v. Wayfair allows states to impose sales tax on more out-of-state online sales. But does it mean your business must immediately begin collecting sales tax on online sales to all out-of-state customers? No. You must collect such taxes only if the particular state requires it. South Dakota’s law, for example, requires out-of-state retailers that made at least 200 sales or sales totaling at least $100,000 in the state to collect sales tax. But laws vary dramatically from state to state. (Read More)
On the surface, the TCJA’s new, flat 21% income tax rate for C corporations may make choosing C corp structure for your business seem like a no-brainer. After all, 21% is much lower than the 37% top rate that applies to pass-through entities (such as partnerships and S corps). But C corps can still be subject to double taxation. And pass-through entity owners may be eligible for the TCJA’s new 20% qualified business income deduction. The best entity type for your business depends on its unique situation and your situation as an owner. (Read More)
When you think about recent tax law changes and your business, retirement benefits probably aren’t what first come to mind. But if your business sponsors a 401(k) plan, be aware of two changes: 1) Beginning in 2018, former employees with outstanding plan loan balances have until their tax return filing due date (plus extensions) to repay the loan or contribute the outstanding balance to an IRA or other qualified plan and avoid taxes and penalties. 2) Beginning in 2019, limits on employee 401(k) hardship withdrawals will increase. (Read More)
Most small businesses aren’t yet accepting bitcoin or other virtual currency payments, but more and more larger businesses are. And the trend may trickle down to smaller businesses. What are the tax consequences? The IRS has yet to offer much guidance, but it has established that bitcoin should be treated as property, not currency, for federal income tax purposes. So businesses accepting bitcoin payments must report gross income based on the fair market value of the virtual currency when received, measured in equivalent U.S. dollars. (Read More)
The Tax Cuts and Jobs Act restricts the losses that owners of pass-through entities (including sole proprietors) can currently deduct. For tax years beginning in 2018 through 2025, an “excess business loss” can’t be deducted in the current year. This is the excess of your aggregate business deductions for the tax year over the sum of 1) your aggregate business income and gains for the tax year and 2) $250,000 ($500,000 if you’re a married joint-filer). The excess business loss is carried over to the next tax year. Additional rules apply. (Read More)
IRS examiners use Audit Techniques Guides (ATGs) to prepare for audits, and small business owners can use them, too. Many ATGs target specific industries, such as construction. Others address issues that frequently arise in audits, such as executive compensation and fringe benefits. Although ATGs were created to enhance IRS examiner proficiency, they also can help small businesses ensure they aren’t engaging in practices that could raise red flags with the IRS. (Read More)
Now that small businesses and their owners have filed their 2017 income tax returns (or extensions), it’s a good time to review the Tax Cuts and Jobs Act (TCJA) provisions that may significantly impact their taxes for 2018 and beyond. Depending on your entity type, either the new 21% corporate tax rate or the new 20% qualified business income deduction may substantially cut your taxes. And all businesses need to be aware of the breaks the TCJA enhances and the ones it limits or eliminates. The key to maximizing your tax savings is to begin 2018 tax planning now. (Read More)
Are you ready for the new lease accounting rules? They go live in 2019 for public companies and 2020 for private ones. In a nutshell, they require companies to recognize on their balance sheets the assets and liabilities associated with rentals. The effects will be pervasive. In fact, public companies are expected to add more than $1.25 trillion of lease obligations to their balance sheets next year. (Read More)
You may have breathed a sigh of relief after filing your 2017 income tax return (or requesting an extension). But if you have years’ worth of receipts, canceled checks and other tax-related records for your small business, you probably want to get rid of what you can. A good rule of thumb is to hold on to tax-related documents for at least six years. But you should keep some records longer. For ex ample, keep property-related records at least seven years after you dispose of the property. And keep copies of returns themselves permanently. (Read More)
The Tax Cuts and Jobs Act includes many changes affecting tax breaks for employee benefits that will impact not only employees but also the businesses providing the benefits. Beginning with the 2018 tax year, the new law reduces or eliminates tax breaks in these 4 areas: transportation benefits, on-premises meals, moving reimbursements and employee achievement awards. (Some changes are only temporary.) On the plus side, for 2018 and 2019, the new law creates a tax credit for wages paid to qualifying employees on family or medical leave. (Read More)
If a company’s deductible expenses exceed its income, generally a net operating loss (NOL) occurs. The upside is tax benefits: If the tax year generating the NOL ended on or before 12/31/17, the NOL can be carried back up to 2 years to generate an immediate tax refund and boost cash flow. Any remaining NOL can be carried forward up to 20 years. Or the entire NOL can be carried forward. But the TCJ A makes significant, generally unfavorable, changes to the tax treatment of NOLs. The rules are complicated, especially for pass-through entities. (Read More)
Repairs businesses made to tangible property (such as buildings, machinery, equipment or vehicles) last year generally can be immediately expensed and fully deducted on 2017 income tax returns. But costs incurred last year to improve such property must be depreciated over a period of years, providing a much smaller 2017 deduction. Distinguishing between repairs and improvements can be difficult. Fortunately, some IRS safe harbors can help. (Read More)
Every business experiences occasional cash shortages. But, if you’re lucky, you may find a hidden pot of gold in your balance sheet using the cash gap. This metric is a function of the timing difference between when companies order materials and pay suppliers and when they receive payment from their customers. By focusing on three balance sheet accounts (inventory, receivables and payables) you can generate extra cash and lower financing costs. (Read More)
The federal income tax filing deadline for calendar-year partnerships, S corporations and LLCs treated as partnerships or S corporations for tax purposes is March 15, about a month earlier than the deadline for personal returns. If you haven’t filed your partnership or S corporation return yet, you may be thinking about an extension. An extension can be tax-smart if you’re missing critical documents or an unexpected life event is preventing you from devoting sufficient time to your return now. But there are additional considerations. (Read More)
If you purchased qualifying business property by Dec. 31, 2017, you may be able to take advantage of Sec. 179 expensing on your 2017 tax return. Sec. 179 allows eligible taxpayers to deduct the entire cost of qualifying new or used depreciable property and most software in Year 1, subject to various limitations. For tax years that began in 2017, the maximum Sec. 179 deduction is $510,000. For the 2018 tax year, the Tax Cuts and Jobs Act increases the maximum Sec. 179 deduction to $1 million. (Read More)
Bonus depreciation allows businesses to offset the costs of investing in equipment and other qualified assets more quickly. Claiming bonus depreciation on your 2017 tax return may be particularly beneficial. Why? Deductions save more tax when rates are higher, and most businesses’ tax rates will go down in 2018 under the Tax Cuts and Jobs Act. How much can you save? The break allows additional first-year depreciation of 50% or 100% for 2017, depending on when the asset was acquired and placed in service. (Read More)
Owners of “pass-through” businesses may see some major (albeit temporary) relief under the Tax Cuts and Jobs Act (TCJA) in the form of a new deduction for a portion of qualified business income (QBI). For tax years beginning after Dec. 31, 2017, and before Jan. 1, 2026, owners of entities such as sole proprietorships, partnerships, S corporations and LLCs generally can deduct 20% of QBI, subject to restrictions that can apply at higher income levels. More rules and limits apply; careful planning will be necessary to gain maximum benefit. (Read More)
The Tax Cuts and Jobs Act (TCJA) significantly enhances bonus depreciation. You might even be able to benefit when you file your 2017 tax return. Generally, for qualified property placed in service between Sept. 28, 2017, and Dec. 31, 2022, the first-year bonus depreciation percentage increases to 100%. In addition, the 100% deduction is allowed for not just new but also used qualifying property. The new law also allows 100% bonus depreciation for qualified film, television and live theatrical productions. (Read More)
The recently passed Tax Cuts and Jobs Act includes a multitude of provisions that will have a major impact on businesses. For example, it creates a flat corporate rate of 21% and temporarily provides a new 20% qualified business income deduction for owners of flow-through entities (such as partnerships and S corporations) and sole proprietorships. It also enhances some breaks, but it limits or eliminates many others. The changes generally apply to tax years beginning after December 31, 2017. (Read More)
New York, NY, November 16, 2017 –(PR.com)– The Knowledge Group/The Knowledge Congress Live Webcast Series, the leading producer of regulatory focused webcasts, has announced today that Matthias Needam, Director, CSG Strategic Tax Consultants will speak at the Knowledge Congress’ webcast entitled: “R&D Tax Credit: Opportunities and Pitfalls in the 2018 Landscape LIVE Webcast.” This event is scheduled for Wednesday, November 15, 2017 @ 12:00 PM to 2:00 PM (ET). (Read More)
Sec. 179 expensing allows businesses an immediate deduction for the cost of eligible asset purchases (up to certain limits), rather than depreciating them over a number of years. Another depreciation break for assets that qualify is 50% first-year bonus depreciation. To enjoy these breaks on your 2017 tax return, you generally must acquire and place assets in service by Dec. 31. But tax reform could enhance these breaks, so keep an eye on legislative developments as you plan your asset purchases. (Read More)
In a nation that began with the statement, “No taxation without representation,” tax will always be a debate in America. In 2016, the nation elected a president that appears to have fully and effectively implemented tax strategies in his own business. Those methods have likely allowed him to pay close to nothing for 20 years. While many have questioned the legal and ethical implications of this, nothing has changed. Why not? (Read More)
If you’re a hotel owner, investor, or developer… we’ve compiled a list of 10 important topics (e.g. entity structure, succession planning, net operating loss limitations) that are important for you to know.
Discover how misconceptions about recapture and cost segregation are costing taxpayers millions with this White Paper.
Helping commercial property owners, investors and developers obtain a better understanding of Cost Segregation studies & its benefits.
The content is aimed at taxpayers who may be involved in qualified research activities and want to reduce their tax liability.
Learn how cost segregation studies (CSS) can benefit Real Estate Investment Trust (REITs).
Obtain a better understanding of how the Tax Cuts & Jobs Act (TCJA) can help real estate owners and investors save more money.