The Tax Cuts and Jobs Act (TCJA) has introduced changes in business qualifications for using the cash-basis or accrual method of accounting. Usually, a small business will use the cash-basis method of accounting and then convert to the accrual-basis reporting as they grow. The switch in methods is usually to conform with U.S. Generally Accepted Accounting Principles (GAAP) and for federal tax purposes. With TCJA changes, this may no longer be the best route for every business.
Reading time: under 1 minute The fourth quarter of 2018 includes several important tax deadlines affecting businesses and employers. We have provided a list of the primary fourth quarter deadlines below: October 15 Calendar-year C corporations that filed an automatic … Continued
Using an independent contractor, rather than a traditional employee, can provide many tax advantages. For example, classifying a worker as an independent contractor removes the requirements of overtime pay, unemployment compensation, and other employee benefits. Independent contractors also free a business from payroll tax liability, as well as the task of withholding income taxes and the worker’s share of payroll taxes.
With the new 21% flat income tax rate that applies to C corporations, it may not be as useful to use an S corp business structure as it once was. There are certainly advantages, including limited liability for owners, and no double taxation at the federal level; but, the S corp business structure may have lost advantage for your company.
Recently, the eligibility rules for using the cash method of accounting have been loosened under the Tax Cuts and Jobs Act (TCJA). This change in qualifications offers many benefits, especially simplicity, to companies previously obligated to the accrual method.
A new deduction under the TCJA (Tax Cuts and Jobs Act) gives a break to noncorporate owners of pass-through entities on a portion of their qualified business income. The deduction can reach as much as 20% of qualified business income, though a wage limit does phase in. Generally, this deduction is available to sole proprietorships, partnerships, S corporations, and limited liability companies (LLCs).
Don’t forget to keep track of second quarter deadlines in 2018. Here are some key tax-related deadlines that will affect you as a business or other employer in the coming months:
IRS examiners use Audit Techniques Guides (ATGs) as they get ready for audits — and small business owners might want to, as well. Numerous ATGs focus on specific industries, like construction. Some zero in on issues that come up in … Continued
By this point, small businesses (and their owners) have either filed their 2017 income tax returns or filed for an extension. Now is the time to go over several provisions of the Tax Cut and Jobs Act (TCJA) that might significantly affect taxes for 2018 on out. The changes typically impact tax years beginning after December 31, 2017, and, unless specifically stated, are permanent.
When real estate or other appreciated business assets are sold, you generally must pay tax on the appreciation. Section 1031 offers one way to defer this tax: a “like kind” exchange. Unfortunately, the Tax Cuts and Jobs Act (TCJA) cuts down on the kinds of property that qualify for this favorable tax treatment.