Online Newsletter

• Due Date Reminders

• Business Issues & Tips

• Tax Tips of the Month

• New Tax Laws

• Quickbooks Tips

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

As the end of the year approaches, many are looking for ways to reduce their business profits before year’s end. Here are some possible moves that might apply to your situation. Self-employed Retirement Plans - If you are self-employed and haven't done so yet, you may wish to establish a self-employed retirement plan. Certain types of plans must be established before the end of the year to make you eligible to deduct contributions made to the plan for 2012, even if the contributions are...

For small business owners, tax breaks often come in the form of tax deductions – which can offer a nice little instant cash savings – if you know how to navigate tax law and claim the deductions you deserve (not what you believe you are entitled to).Large tax deductions are a notorious red flag for the IRS, with home-based businesses, in particular, facing an increase in tax audits due to suspicious deduction activity on income tax returns.To help you navigate the complex world of...

Advance earned income credit has been repealed for 2011. This credit allowed certain low-income employees to receive an advance payment of the earned income credit in their paychecks. Their withholding was lowered to take into account the payment. However, employers are cautioned that the advance earned income credit has been repealed beginning with the 2011 tax year.  Therefore, they must stop the advance EIC credit payments effective for payroll payable in 2011.

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.  o Cell Phones No Longer Listed Property - This means that cell phones can be deducted or depreciated like other business property, without the complicated recordkeeping required for listed pr...

Does the decline in real estate values present a business opportunity? Real estate rentals historically have been a popular long-term investment, and if you believe that this market eventually will rebound from its current slump, this may be the time to consider such an investment. This material will explain some of the tax ramifications of renting both residential and commercial real estate. One of the biggest benefits of owning rental property is that the tenants, over time, buy the propert...

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.  The business expense allocation ratio is determined by dividing the business miles for the year by the total vehicle miles for the year.  Keep in mind that commuting expenses to and from your ...

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 actu...

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. However, the IRS has made it clear that this special provision does not apply to state law entities, such as general or limited partnerships or limited liability companies. If you are interested in pursuing this optio...

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. Unfortunately, the cost of meals can only be deducted when you are away from home overnight. However, you may be able to deduct the cost of your lunch as business-related entertainment if you take one of your customers to lunch with you. In any case, even when the meals are allowed, they ...

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 ...

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 givi...

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. Generally, a worker who receives a Form 1099 for services provided as an independent contractor must report the income on Schedule C and pay se...

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. For example, if you pay a charitable orga...

With lenders becoming more conservative, money tightening up, and the real estate market in decline, many homeowners and speculators find themselves faced with some unpleasant choices. One strategy is to wait until home prices rebound, but that could be some time and probably too far off for the owner with a variable rate or short-term introductory rate loan and increasing mortgage payments. There are other reasons—such as job relocation, divorce, declining income or poor health—t...

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.• Minimize personal liability. Individuals should try to avoid putting their personal assets at risk when they enter into a business venture whether solely or with others. Many overlook or dismiss the fact that pers...