What is Qualified Business Income Deduction (QBID)? Can you claim it? Before the Tax Cuts and Jobs Act law (pre 2018), there was no special deduction for qualified business income (QBI). After the Tax Cuts and Jobs Act law was passed, the new QBI deduction came into existence. The deduction is generally 20% of a [...]
Tax treaties or the Double Taxation treaties (DTT), as the name suggests are entered into between the two countries to coordinate their tax system at the international level. With the advent of globalization during 60’s & 70’s it became imperative to enter into bilateral conventions in order to reduce double taxation on international income. DTT [...]
Leasing asset equipment or vehicles has become a common alternative to purchasing for business entities. Of the two types of leases - capital leases and operating leases - each is used for different purposes and results in differing accounting treatment and tax consequence on the books of a business. What is a capital lease? A [...]
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, with the new 21% flat income tax rate that now applies to C corporations, S corps may not be quite as attractive as they [...]
Small businesses often use the cash-basis method of accounting. As businesses grow, they usually convert to accrual-basis reporting for federal tax purposes and to conform with U.S. Generally Accepted Accounting Principles (GAAP). Starting this tax year, the Tax Cuts and Jobs Act (TCJA) has increased the threshold for businesses that qualify for the simpler cash [...]
For many entrepreneurs, getting a “doing business as” (DBA) certificate enables them to open a small business. However, DBAs can also be used to open shell companies. These businesses, which have no assets of their own, may be legitimate — for example, when they’re used to hold another company’s assets. But they also can be [...]
Under the Tax Cuts and Jobs Act, employees can no longer claim the home office deduction. If, however, you run a business from your home or are otherwise self-employed and use part of your home for business purposes, the home office deduction may still be available to you. Home-related expenses Homeowners know that they can [...]
Businesses that acquire, construct or substantially improve a building — or did so in previous years — should consider a cost segregation study. It may allow you to accelerate depreciation deductions, thus reducing taxes and boosting cash flow. And the potential benefits are now even greater due to enhancements to certain depreciation-related breaks under the [...]
At this time of year, a summer vacation is on many people’s minds. If you travel for business, combining a business trip with a vacation to offset some of the cost with a tax deduction can sound appealing. But tread carefully, or you might not be eligible for the deduction you’re expecting. General rules Business [...]
If you’ve ever considered paying employees in cash under the table, resist the temptation. Not only do you and your workers risk penalties, but the practice may do significant financial damage to your business and could even result in criminal prosecution. Justifying the practice Employers may make financial justifications for paying cash wages. It lowers [...]
