Start-Up Small Business – Part 7 – (What if I fail?)
If your attempt to go into business is unsuccessful. If you are an individual and your attempt to go into business is not successful, the expenses you had in trying to establish yourself in business fall into two categories. The costs you had before making a decision to acquire or begin a specific business. These costs are personal and nondeductible. They include any costs incurred during a general search for, or preliminary investigation of, a business or investment possibil
Start-Up Small Business – Part 5 – (How Much Can I Deduct?)
Generally, you can deduct the full amount of a business expense if it meets the criteria of ordinary and necessary and it is not a capital expense. Recovery of amount deducted (tax benefit rule). If you recover part of an expense in the same tax year in which you would have claimed a deduction, reduce your current year expense by the amount of the recovery. If you have a recovery in a later year, include the recovered amount in inincome in that year. However, if part of the d
Start-Up Small Business – Part 4 – Personal Versus Business Expenses
Generally, you cannot deduct personal, living, or family expenses. However, if you have an expense for something that is used partly for business and partly for personal purposes, divide the total cost between the business and personal parts. You can deduct the business part. For example, if you borrow money and use 70% of it for business and the other 30% for a family vacation, you generally can deduct 70% of the interest as a business expense. The remaining 30% is personal
Start-Up Small Business – Part 3 – What Can I Expense?
According to the IRS, expenses available for deduction include: A business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your industry. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary. Even though an expense may be ordinary and necessary, you may not be allowed to deduct the expense in the year you paid or incu
Start-Up Small Business – Part 2 – (Getting Started)
Many new people entering the world of business miss opportunities they can deduct when starting to grow their dream. I am referring to the expenses occurred before operations even begin. Most people when starting an independent business venture work a job already, which is known as floating your home base while cultivating the new company. Yes, starting a new business means you are working twice as hard with only one stream of income. Where does that money come from, most of
Retention Relief for Employers Affected by the 2017 Hurricane Season
Attention employers/victims of Hurricanes Harvey, Irma, and Maria, on September 29, 2017, President Trump signed into law the Disaster Tax Relief and Airport and Airway Extension Act of 2017. This act is designed to deliver targeted tax relief for qualified businesses with locations within designated disaster zones. The law also includes an employee retention tax credit for employers. This allows employers to seek a retention tax credit for continuing to pay employees during
A $4000 Pay Raise??
As we closely follow the new tax proposals coming out of the White House, the House of Representatives and the Senate, it’s important to analyze the effects of those proposals. One of the effects the White House announced Wednesday evening was that the proposal they are pushing would effectively raise the U.S. Household Income by $4000 over the next 8 years. How you ask? By bringing U.S. profits that are held off-shore back into the U.S. I have been giving a Keynote lecture
IRS Continues Relief Efforts across the U.S.
It is common that in times of great disaster in the United States, that the IRS will lend a helping hand. This is typically in the way of tax relief, filing deadline relief, etc. Just within the last month the IRS announced penalty relief for late filed tax returns if you were required to file a Partnership Tax Return (1065). The deadline changed this year for that type of return to March 15th (or the next business day if that falls on a holiday or weekend). The previous d
