IRS Issues Guidance on New Bonus Depreciation Rules

Bonus Depreciation

The Tax Cuts and Jobs Act (TCJA) significantly expands bonus depreciation under Section 168(k) of the Internal Revenue Code for both regular tax and alternative minimum tax (AMT) purposes. Now, the IRS has released proposed regulations that clarify the requirements that businesses must satisfy to claim bonus depreciation deductions. Although the regs are only proposed…

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Choose the Right Accounting Method for Tax Purposes

Cash or Accrual

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 a small business taxpayer can use to obtain automatic consent to change its method of accounting under the TCJA. If you have the option to use either accounting method, it pays to consider whether switching methods would be beneficial.

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Book Review: Clockwork

Clockwork

Over the weekend I finished reading Mike Machalowicz’ latest book, Clockwork. Set to release on Tuesday Aug 21, 2018, this is a great book with some interesting concepts, but this book is not meant for everybody.  The intended audience is entrepreneurs.  Which not coincidentally is what I am passionate about.  I enjoy helping entrepreneurs realize…

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Why Employers are Taking Another Look at Life Insurance as a Fringe Benefit

Life Insurance

Many employers are showing renewed interest in providing group term life insurance as a fringe benefit. For them, premiums paid are generally tax-deductible and, because claims occur infrequently, the coverage is typically simple and inexpensive to administer. Plus, at least one recent survey indicates employees really want employer-provided life insurance. For employees, group term coverage costs on up to $50,000 of coverage usually aren’t taxable. We can provide more information on group term life insurance, as well as other potential fringe benefits.

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What You Need to Know About Tax Reform 2.0

Is more tax reform on the horizon? President Trump and Republican lawmakers currently are considering a second round of tax reform legislation as a follow-up to last year’s Tax Cuts and Jobs Act (TCJA). As of this writing, there’s been no actual bill drafted. However, House Ways and Means Committee Chair Kevin Brady (R-TX) just…

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Why the “kiddie tax” is more dangerous than ever

Dangerous Kiddie Tax

Once upon a time, some parents and grandparents would attempt to save tax by putting investments in the names of their young children or grandchildren in lower income tax brackets. To discourage such strategies, Congress created the “kiddie” tax back in 1986. Since then, this tax has gradually become more far-reaching. Now, under the Tax…

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How to Document Business Meals, Vehicle and Travel Expenses

Business Meals

Meal, vehicle and travel expenses are common deductions for businesses. But if you don’t properly document these expenses, you could find your deductions denied by the IRS. A critical requirement Subject to various rules and limits, business meal (generally 50%), vehicle and travel expenses may be deductible, whether you pay for the expenses directly or…

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LLC Restrictions on Professional Services Companies in California

Limited liability company (LLC) members that operate a “professional services” company registered in California are at risk of losing liability protection, paying penalties and interest, having to amend prior year tax returns, losing their company name and paying more administrative and accounting fees which could include adjustments to payroll and payroll tax returns. Ouch! LLCs…

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Volunteer to Give

Volunteer

What can you deduct when volunteering? Because donations to charity of cash or property generally are tax deductible (if you itemize), it only seems logical that the donation of something even more valuable to you — your time — would also be deductible. Unfortunately, that’s not the case. Donations of time or services aren’t deductible.…

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