26 Jan 2022
0

How Entrepreneurs Expenses are Claimed on Tax Returns

Roger Rossmeisl, CPA
Small Business Tax Briefs
How Entrepreneurs Expenses are Claimed on Tax Returns

While some businesses have closed since the start of the COVID-19 crisis, many new ventures have launched. Entrepreneurs have cited a number of reasons why they decided to start a business in the midst of a pandemic. For example, they had more time, wanted to take advantage of new opportunities or they needed money due to being laid off. Whatever the reason, if you’ve recently started a new business, or you’re contemplating starting one, be aware of the tax implications. As you know, before you even open the doors in a start-up business, you generally have to spend a lot of money. You may have to train workers and pay for rent, utilities, marketing and more. Entrepreneurs are often unaware that many expenses incurred by start-ups can’t...

19 Jan 2022
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Numerous Tax Limits Affecting Businesses Have Increased for 2022

Roger Rossmeisl, CPA
Small Business Tax Briefs
Numerous Tax Limits Affecting Businesses Have Increased for 2022

Many tax limits that affect businesses are annually indexed for inflation, and a number of them have increased for 2022. Here’s a rundown of those that may be important to you and your business. Social Security tax The amount of an employee’s earnings that is subject to Social Security tax is capped for 2022 at $147,000 (up from $142,800 in 2021). Deductions  Standard business mileage rate, per mile: 58.5 cents (up from 56 cents in 2021) Section 179 expensing: Limit: $1.08 million (up from $1.05 million in 2021) Phaseout: $2.7 million (up from $2.62 million) Income-based phase-out for certain limits on the Sec. 199A qualified business income deduction begins at: Married filing jointly: $340,100 (up from $329,800 in 2021) Single filers: $170,050 (up from $164,900) Business meals In 2022 and...

11 Jan 2022
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Businesses with Employees who Receive Tips may be Eligible for a Tax Credit

Roger Rossmeisl, CPA
Small Business Tax Briefs
Businesses with Employees who Receive Tips may be Eligible for a Tax Credit

If you’re an employer with a business where tipping is customary for providing food and beverages, you may qualify for a federal tax credit involving the Social Security and Medicare (FICA) taxes that you pay on your employees’ tip income. Basics of the credit The FICA credit applies with respect to tips that your employees receive from customers in connection with the provision of food or beverages, regardless of whether the food or beverages are for consumption on or off the premises. Although these tips are paid by customers, they’re treated for FICA tax purposes as if you paid them to your employees. Your employees are required to report their tips to you. You must withhold and remit the employee’s share of FICA taxes, and you must...

05 Jan 2022
0

Defer Tax with a Like-Kind Exchange

Roger Rossmeisl, CPA
Small Business Tax Briefs
Defer Tax with a Like-Kind Exchange

Do you want to sell commercial or investment real estate that has appreciated significantly? One way to defer a tax bill on the gain is with a §1031 “like-kind” exchange where you exchange the property rather than sell it. With real estate prices up in some markets (and higher resulting tax bills), the like-kind exchange strategy may be attractive. A like-kind exchange is any exchange of real property held for investment or for productive use in your trade or business (relinquished property) for like-kind investment, trade or business real property (replacement property). For these purposes, like-kind is broadly defined, and most real property is considered to be like-kind with other real property. However, neither the relinquished property nor the replacement property can be real property held primarily...

05 Jan 2022
0

2022 Business Mileage Rate

Roger Rossmeisl, CPA
Small Business Tax Briefs
2022 Standard Business Mileage Rate

After two years of no increases, the optional standard mileage rate used to calculate the deductible cost of operating an automobile for business will be going up in 2022 by 2.5 cents per mile. The IRS recently announced that the cents-per-mile rate for the business use of a car, van, pickup or panel truck will be 58.5 cents (up from 56 cents for 2021). The increased tax deduction partly reflects the price of gasoline. On December 21, 2021, the national average price of a gallon of regular gas was $3.29, compared with $2.22 a year earlier, according to AAA Gas Prices. Don’t want to keep track of actual expenses?  Businesses can generally deduct the actual expenses attributable to business use of vehicles. This includes gas, oil, tires, insurance, repairs,...

27 Dec 2021
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2022 Q1 Tax Calendar: Key Deadlines for Businesses

Roger Rossmeisl, CPA
Small Business Tax Briefs
2022 Q1 Tax Calendar: Key Deadlines for Businesses

Here are some of the key tax-related deadlines affecting businesses and other employers during the first quarter of 2022. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. Contact us to ensure you’re meeting all applicable deadlines and to learn more about the filing requirements. January 17 (The usual deadline of January 15 is a Saturday) Pay the final installment of 2021 estimated tax. Farmers and fishermen: Pay estimated tax for 2021. January 31  File 2021 Forms W-2, “Wage and Tax Statement,” with the Social Security Administration and provide copies to your employees. Provide copies of 2021 Forms 1099-MISC, “Miscellaneous Income,” to recipients of income from your business where required. File 2021 Forms 1099-MISC, reporting nonemployee compensation payments...

17 Dec 2021
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Providing a Company Car? Here’s How Taxes are Handled

Roger Rossmeisl, CPA
Small Business Tax Briefs
Providing a Company Car? Heres How Taxes are Handled

The use of a company vehicle is a valuable fringe benefit for owners and employees of small businesses. This perk results in tax deductions for the employer as well as tax breaks for the owners and employees using the cars. (And of course, they get the non-tax benefit of getting a company car.) Plus, current tax law and IRS rules make the benefit even better than it was in the past. The rules in action Let’s say you’re the owner-employee of a corporation that’s going to provide you with a company car. You need the car to visit customers, meet with vendors and check on suppliers. You expect to drive the car 8,500 miles a year for business. You also expect to use the car for about...

17 Dec 2021
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Tax Implications of Owning a Corporate Aircraft

Roger Rossmeisl, CPA
Small Business Tax Briefs
Tax Implications of Owning a Corporate Aircraft

If your business is successful and you do a lot of business travel, you may have considered buying a corporate aircraft. Of course, there are tax and non-tax implications for aircraft ownership. Let’s look at the basic tax rules. Business travel only In most cases, if your company buys a plane used only for business, the company can deduct its entire cost in the year that it’s placed into service. The cases in which the aircraft is ineligible for this immediate write-off are: The few instances in which neither the 100% bonus depreciation rules nor the §179 small business expensing rules apply or When the taxpayer has elected out of 100% bonus depreciation and hasn’t made the election to apply §179 expensing. In those cases, the depreciation schedule...

07 Dec 2021
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There May Still Be Time to Cut Your Small Business 2021 Taxes

Roger Rossmeisl, CPA
Small Business Tax Briefs
There May Still Be Time to Cut Your Small Business 2021 Taxes

Don’t let the holiday rush keep you from considering some important steps to reduce your 2021 tax liability. You still have time to execute a few strategies. Purchase assets Thinking about buying new or used equipment, machinery or office equipment in the new year? Buy them and place them in service by December 31, and you can deduct 100% of the cost as bonus depreciation. Contact us for details on the 100% bonus depreciation break and exactly what types of assets qualify. Bonus depreciation is also available for certain building improvements. Before the 2017 Tax Cuts and Jobs Act (TCJA), bonus depreciation was available for two types of real property: land improvements other than buildings (for example fencing and parking lots), and “qualified improvement property,” a broad category of...

29 Nov 2021
0

Infrastructure Law Sunsets Employee Retention Tax Credit Early

Roger Rossmeisl, CPA
Automotive, Small Business Tax Briefs
Infrastructure Law Sunsets Employee Retention Tax Credit Early

The Employee Retention Tax Credit (ERTC) was a valuable tax credit that helped employers survive the COVID-19 pandemic. A new law has retroactively terminated it before it was scheduled to end. It now only applies through September 30, 2021 (rather than through December 31, 2021) — unless the employer is a “recovery startup business.” The Infrastructure Investment and Jobs Act of 2021 (IIJA 2021), which was signed by President Biden on November 15, 2021, doesn’t have many tax provisions but this one is important for some businesses. If you anticipated receiving the ERTC based on payroll taxes after September 30 and retained payroll taxes, you must determine how and when to repay those taxes and address any other compliance issues. The American Institute of Certified Public Accountants (AICPA)...

ROGER ROSSMEISL, CPA

Kho & Patel CPAs
160 E. Arrow Highway
San Dimas, CA 91773

(714) 325-0442
roger@khopatel.com

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