Warning: Invalid argument supplied for foreach() in /home/rdsanfor/public_html/wp-content/plugins/affiliate-link-manager/index.php on line 516
Small Business Archives - R. Darren Sanford, CPA, CGMA
Mar 252016
 
Please Like and Share:

Reminder: Tangible Property Expensing Threshold is $2,500.  In late 2015, the IRS raised the safe harbor threshold for deducting certain capital items. Previously $500, the amount was raised to $2,500 for taxpayers without an applicable financial statement, or AFS.  This was a huge “win” for the AICPA.  They had been advocating for an increased threshold for quite some time. The new de minimis amount applies to costs incurred for tax years beginning on or after January 1, 2016. However, the IRS stated that it won’t raise the issue of a higher amount during an audit of an earlier tax year if the taxpayer is otherwise compliant with the regulations. This means tax professionals should discuss with their clients whether to use the increased $2,500 limit for the 2015 tax year. Keep in mind that the de minimis expense limit doesn’t impact the amount taxpayers could otherwise expense under Code Section 179.

This new tangible property expensing threshold amount will reduce administrative burden on the part of small businesses.

For taxpayers with an applicable financial statement, the de minimis or small-dollar threshold remains $5,000.

Note:  This change is a result of The Treasury Department and the IRS receiving more than 150 comment letters suggesting an increase in the amount of the de minimis safe harbor limit for taxpayers without an AFS. According to IRS Notice 2015-82, “commenters wrote that the $500 limitation was too low to effectively reduce the administrative burden of complying with the capitalization requirement for small – 4 – business taxpayers that frequently purchase tangible property in their trades and businesses. Commenters noted that the cost of many commonly expensed items (for example, tablet-style personal computers, smart phones, and machinery and equipment parts) typically surpass the current $500 per item or invoice threshold provided in § 1.263(a)-1(f)(1)(ii)(D). Commenters also stated that the $500 threshold does not correspond to the financial accounting policies of many small businesses, which frequently permit the deduction of amounts in excess of $500 as immaterial. Commenters noted that without an increase in the de minimis safe harbor limit for taxpayers without an AFS, a capitalization threshold in excess of $500 can only be substantiated by establishing that a taxpayer’s policy results in the clear reflection of income for federal income tax purposes, resulting in additional burden and uncertainty for taxpayers. Finally, many commenters expressed concern regarding the disparate treatment of taxpayers with an AFS compared to those without an AFS under the safe harbor requirements, stating that obtaining an AFS is cost prohibitive for many small businesses and does not adequately justify the substantially lower de minimis ceiling for these taxpayers.”

Tangible Property Expensing

Disclosure of Material Connection: Some of the links on this blog are “affiliate links.” This means if you click on the link and purchase the item, I might receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

Jul 312015
 
Please Like and Share:

The federal highway funding extension bill passed by Congress contains several tax provisions, including changing the due dates for partnership, S corporation, and corporate tax returns, a provision the AICPA has long advocated.

Source: Return due dates changed in highway funding bill

Disclosure of Material Connection: Some of the links on this blog are “affiliate links.” This means if you click on the link and purchase the item, I might receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

Jun 172015
 
Please Like and Share:

Self-employed individuals, including home based business owners, may deduct expenses related to their business not afforded to other taxpayers.  However, there is a unique set of business tax rules with which self-employed and home based business owners must comply.  If the taxpayer is a sole proprietor or single member LLC, the income and expenses of their business are reported on Schedule C of Form 1040.

Self-employed persons:

  • Make estimated tax payments
  • Pay self-employment tax (Social Security and Medicare)
  • Include income not subject to withholding when calculating estimated tax payments
  • Deduct ordinary and necessary expenses of running a business

For a complete discussion of business taxes for the self-employed, view the video at the following link.

Business Taxes for The Self-Employed

For more information related to business taxes for the self-employed or an opportunity to own your own home based business, complete the information below and I’ll be glad to send you more information.

 

Disclosure of Material Connection: Some of the links on this blog are “affiliate links.” This means if you click on the link and purchase the item, I might receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

Jun 132015
 
Please Like and Share:

We are quickly approaching the middle of the 2015 tax year.  You should know how to pay far less taxes this year and every future year for that matter.

If you paid too much in taxes last year, you do not want to miss this web briefing!  I don’t recommend training unless it’s something I know you will get valuable information from that will improve your financial situation.

In this webinar, you will learn:

  • Research by Small Business Tax Strategies concluded “Small Businesses OVERPAY the IRS by an average of $11,638.”
  • WHY is nearly EVERY small business owner OVER-PAYING their TAXES???

Surprisingly, the answer is not complicated.

If you’re paying your taxes and there is a line (or several lines) on the tax forms asking for your deductions, but you don’t know about any deductions, you will OVERPAY your taxes.

That’s why nearly all small business owners are overpaying their taxes – they are completely unaware of some major tax deductions they can
easily qualify for.

There is no reason the IRS should be able to suck tons of extra cash out of you just because they have hidden important tax deduction information from you.

The truth is, small business owners get more tax deductions than any other category of taxpayer in America, bar none!

Isn’t it time you knew what they are?

TOMORROW, Sunday, June 14th, 2015, my friend Ron Mueller will reveal ALL of the SIX BIGGEST deductions, and he’ll tell you exactly how to qualify for all of them.

GET THE DETAILS TOMORROW, Sunday, 6/14/2015, DURING A FREE WEB BRIEFING

Learning and using just SIX specific tax deductions, that ONLY small and home based business owners can qualify for, can easily slash this year’s taxes by up to $3,000 to $5,000 or more.

He will conduct this live, FREE web briefing ONE FINAL TIME, tomorrow, Sunday, 6/14/2015.

6:00 pm Pacific time
7:00 pm Mountain time
8:00 pm Central time
9:00 pm Eastern time
To REGISTER for SUNDAY, Click HERE

After this web briefing, you will be able to immediately:

  • STOP OVERPAYING Your TAXES!
  • SLASH them to the MINIMUM required by LAW!
  • Keep More of YOUR Money in YOUR Pocket!

WARNING: If you have a small or home based business – even on a very part-time basis – and you are NOT using these SIX specific deductions, you are very likely OVERPAYING your TAXES by AT LEAST $3,000, and probably even more.

After the webinar, feel free to contact me with additional questions or for more information related to how to pay far less taxes this year.

Disclosure of Material Connection: Some of the links on this blog are “affiliate links.” This means if you click on the link and purchase the item, I might receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

Dec 242014
 
Please Like and Share:

Season’s Greetings!

Sorry for the delay in my blog post.  I was hoping the Tax Extenders would be final before the 18th.  The President signed the bill (Tax Increase Prevention Act) on Friday, December 19.  I have some important information listed, so please read.  This extension ends December 31, 2014.

First of all, for those of you who pay estimated tax payments, the due date for the fourth quarter of tax year 2014 is January 15, 2015.  If you are not in the AMT tax bracket, please pay your state estimated tax payment on or before December 31, 2014 so you can get the tax deduction on your 2014 tax return.

Mileage rates for 2015:  57.5 cents for business use, 23 cents for medical/moving, and 14 cents for charity.

Tax Extenders for 2014 include, but are not limited to, the following:

  • The deduction for mortgage insurance premiums.
  • A provision allowing persons over age 70-1/2 to make tax-free withdrawals from their Individual Retirement Accounts (IRAs) to make charitable contributions.
  • Debt Forgiveness exclusion for a personal residence.
  • The educator expense deduction-adjustment to income of up to $250 for grade K-12 educators.
  • Tuition and fees deduction-adjustment to income up to $4,000.
  • Deduction for state and local general sales tax as an itemized deduction (Schedule A) for sales tax in lieu of state income tax.
  • Nonbusiness energy property credit-up to $500 maximum lifetime credit for qualified energy efficient home improvements (windows, furnaces, etc.).
  • Electric drive vehicle credits-the credit for two-and three-wheeled vehicles has been extended.  (The provisions for low-speed electric vehicles expired).
  • The credit for plug-in electric drive motor vehicles, such as the Nissan Leaf or Chevy Volt, is still available.
  • Energy-efficient appliance credit.

Provisions affecting businesses:

  • Bonus Depreciation allowing an additional first year deduction of 50 percent of the cost of new equipment.
  • Enhanced Section 179 Expense Limitations allowing for the expense of $500,000 on acquired property for business use.
  • New markets tax credit.
  • Wage credit for employers of uniformed active duty service personnel.
  • Work opportunity tax credit.
  • Fifteen-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements.
  • Enhanced charitable deduction for contributions of food inventory.
  • Incentives for biodiesel and renewable diesel.
  • Alternative fuels excise credit.

For a detailed list of all tax extenders related to tax year 2014, click here.

Feel free to contact me if you have any questions.

************************************************

Thanks for taking your time to read this.

Sincerely,

R. Darren Sanford, CPA, CGMA

Disclosure of Material Connection: Some of the links on this blog are “affiliate links.” This means if you click on the link and purchase the item, I might receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

Dec 102014
 
Please Like and Share:

The new standard mileage rates for 2015 are now available.

The Internal Revenue Service today issued the 2015 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2015, the standard mileage rates for the use of a car, van, pickup or panel truck will be:

  • 57.5 cents per mile for business miles driven, up from 56 cents in 2014
  • 23 cents per mile driven for medical or moving purposes, down half a cent from 2014
  • 14 cents per mile driven in service of charitable organizations

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile, including depreciation, insurance, repairs, tires, maintenance, gas and oil. The rate for medical and moving purposes is based on the variable costs, such as gas and oil. The charitable rate is set by law.

Taxpayers always have the option of claiming deductions based on the actual costs of using a vehicle rather than the standard mileage rates.

It’s important to note, however, that a taxpayer cannot go from using actual expenses, including accelerated depreciation and the Section 179 deduction, to the standard mileage rate method.  Also, the standard mileage rate is not available to fleet owners (more than four vehicles used simultaneously). Details on these and other special rules are in Revenue Procedure 2010-51, the instructions to Form 1040 and various online IRS publications including Publication 17, Your Federal Income Tax.

Besides the standard mileage rates, Notice 2014-79, posted today on IRS.gov, also includes the basis reduction amounts for those choosing the business standard mileage rate, as well as, the maximum standard automobile cost that may be used in computing an allowance under a fixed and variable rate plan.

Be reminded that while using the standard mileage rate is simpler, it still requires some record keeping.  Proper documentation should be maintained including the date, the origin and destination of travel and the purpose of the trip.  This documentation is required when answering the question related having a written record of the mileage claimed for tax return purposes.

For more information or assistance with standard mileage rates for 2015, feel free to contact me via the form below:

Disclosure of Material Connection: Some of the links on this blog are “affiliate links.” This means if you click on the link and purchase the item, I might receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

Oct 172014
 
Please Like and Share:

The new health care law has been a topic of much controversy.  While the primary focus of this new law is health insurance, it does contain income tax ramifications.

Have you been affected by the new health care law and if so, how?

English: U.S. Health Insurance Status (Under 65)

English: U.S. Health Insurance Status (Under 65) (Photo credit: Wikipedia)

Post by Darren Sanford.

Disclosure of Material Connection: Some of the links on this blog are “affiliate links.” This means if you click on the link and purchase the item, I might receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

Dec 062013
 
Please Like and Share:

2014 Standard Mileage Rates for Business, Medical and Moving Expenses

The Internal Revenue Service today issued the 2014 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2014, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 56 cents per mile for business miles driven
  • 23.5 cents per mile driven for medical or moving purposes
  • 14 cents per mile driven in service of charitable organizations

The business, medical, and moving expense rates decrease one-half cent from the 2013 rates. The charitable rate is based on statute.

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.

The amount of the deduction is computed by multiplying the number of miles by the applicable standard mileage rate.

Rather than using the standard mileage rate method of calculating the deduction, taxpayers may calculate the actual costs of using their vehicle. Actual costs include gasoline, repairs, insurance, and interest. Only the business use portion of these expenses may be considered when calculating the deduction.

Furthermore, a taxpayer may not use the business standard mileage rate method for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. What this means is that a taxpayer may go from using the standard mileage rate method to the actual cost method, but they may not go from the actual cost method to the standard mileage rate method. In addition, the standard mileage rate for business cannot be used for more than four vehicles used simultaneously. In that case, the actual cost method must be used.

These and other requirements for a taxpayer to use a standard mileage rate to calculate the amount of a deductible business, moving, medical, or charitable expense are in Rev. Proc. 2010-51. Notice 2013-80 contains the standard mileage rates, the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.

Adequate documentation must be maintained to substantiate a deduction for mileage. The date, number of miles, destination and purpose should be recorded in a mileage log. Most smart phones have apps that are great for tracking mileage.

For assistance with calculating business, medical, moving or charitable mileage deductions, submit your request below.

Enhanced by Zemanta

Disclosure of Material Connection: Some of the links on this blog are “affiliate links.” This means if you click on the link and purchase the item, I might receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

Nov 222013
 
Please Like and Share:

55 Tax Breaks Set to Expire by the End of the Year

Tax breaks are key to reducing taxable income and therefore, the amount of tax due each year. Many tax breaks have a limited life and end on their expiration date unless Congress extends the date of expiration or makes the tax breaks permanent. Here’s a brief list of some of the tax breaks set to expire by December 31, 2013. Which of these, if any, would affect your tax situation if they do expire and Congress does not extend them?

55 Tax Breaks Set to Expire by the End of the Year – MainStreet

A new rule effective for 2013 is the Simplified Home Office Deduction. This allows you to deduct a flat $1,500 for the business use of your home. Most people’s actual home office deduction far exceeds this threshold amount so be sure to evaluate whether the simplified home office deduction or actual expenses provides the greater tax benefit.

For more information or additional assistance with tax issues use the contact form below:

Disclosure of Material Connection: Some of the links on this blog are “affiliate links.” This means if you click on the link and purchase the item, I might receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

Post Footer automatically generated by Add Post Footer Plugin for wordpress.