The Tax Cuts and Jobs Act (TCJA) has expanded the availability of the cash method of accounting for federal tax purposes. The cash method allows businesses more flexibility in tax-planning, which could allow deferment of taxable income. It may be a good idea for newly eligible companies to look into the cash method and the benefits it can provide.
Gifts to customers are deductible up to $25 per customer per year. This limit does not include “incidental” costs that do not substantially add to the value of the gift. Incidental costs include engraving, gift-wrapping, packaging, and shipping. Branded marketing collateral is also excluded from the $25 limit; this includes items costing less than $4 and widely distributed such as pens or stress balls with your company’s name and logo printed on them.
The risk of tax identity theft for individuals is widely known, but a new concern is businesses becoming targets. Identity thieves are smarter than in the past: they often know filing practices, the tax codes, and the best ways to get valuable data.
Retirement plans can be a great benefit to businesses. Beyond attraction and retention of employees, offering a retirement plan gives your business access to significant tax deductions. A SIMPLE IRA is often a good retirement plan option for small businesses. This year the deadline for setting up a SIMPLE IRA is October 1, 2018. It is important to weigh your options and decide soon if a SIMPLE IRA is the best retirement plan for your business.
Keeping a business in the family is one of the more significant concerns for family business owners wanting to pass their company to the next generation. Tax-wise, succession planning is best begun long before the business is to be transferred.
The Tax Cuts and Jobs Act narrowed the requirements for claiming a home office deduction; employees are no longer eligible. However, a home office deduction may be available to you if you run a business from your home or are otherwise self-employed and use part of your home for business purposes.
The Tax Cuts and Jobs Act (TCJA) will take effect in tax years 2018 and beyond. This act has lowered tax rates for both C corporations and individual income. The most significant cuts are for C corporations. Rates for C corporations have been moved to a flat 21%, as opposed to paying up to 35% previously.
Late last month, the California Supreme Court made headlines when it adopted a new test to determine whether a worker should be considered an independent contractor or an employee. This distinction is an important one; California labor law protects the rights of workers deemed to be employees by enforcing wage and hour requirements, and by upholding anti-discrimination laws. Independent contractors are not offered these same protections.
You probably felt relieved after you filed your 2017 income tax return (or filed for an extension). However, if your office is now littered with years’ worth of tax returns, canceled checks, receipts and other financial records (or you are drowning in equivalent computer files and tax-related data), you most likely are ready to dispose of what you can. These retention guidelines will help you as you purge.
The Tax Cuts and Jobs Act (TCJA) contains several modifications that impact tax breaks for employee benefits. The adjustments include four negatives and one positive; they will affect both the employees and the businesses providing the benefits.