TCJA Depreciation and Other Deduction Changes
By Jason Dudas, CPA
Under the Tax Cuts and Jobs Act, contractors are now able to take a deduction for the full cost of machinery and equipment purchase made each year. This new provision is referred to as 100% bonus depreciation and there is no limitation on the amount of purchases. The provision is available for assets acquired and placed-in-service after September 27, 2017.
Thinking of Starting a Business?
By: Chloe Parker, CPA, MBA
When you have a brilliant idea for a service or product, you may consider starting a business that will bring your ideas to life. Starting a business can be equally as exciting as it is overwhelming. While you focus on the latest innovations, it is important to properly account for all the transactions necessary to run your company. Proper accounting not only makes taxes less painful but also provides legal protection and valuable insight as the business grows. In the early stages of your business, concentrating on four areas will create a solid foundation to build your business. Read more
New Law, New Limit on Deductions for Business Interest Expense
The Tax Cuts and Jobs Act (TCJA) imposes a new limitation on business interest expense deductions.
The Tax Cuts and Jobs Act (TCJA) imposes a new limitation on deductions for business interest expense. This is a permanent change for tax years beginning in 2018 and beyond. Will your business be affected? Here’s what you need to know. Read more
Calculating Deductions for Business Interest Expense
The Tax Cuts and Jobs Act generally limits business interest expense deductions for businesses with average annual gross receipts over $25 million, with a few industry-specific exceptions.
One of the most complicated provisions of the Tax Cuts and Jobs Act (TCJA) is the new limitation on deductions for business interest expense. At face value, this limitation seems straightforward, but the devil is in the details. Read more
No Single Factor Determines Contractor Status
There are several factors that will help distinguish a workers status as either a contractor or employee.
Hiring someone as an independent contractor can have many advantages for employers.
Among them are that independent contractors:
- Can be hired on a per-project basis and let go when the project is complete,
- May be more experienced workers who want to maintain a degree of independence and don’t require the supervision that is necessary with employees, and
- Don’t have to receive fringe benefits or workers compensation.
Business Interruption Claims Require Professional Help
Smart company owners and executives obtain business interruption insurance — and possibly contingent business income coverage if the operation relies heavily on outsourcing or a particular supplier. The idea is that the policy will compensate the company for lost earnings if a devastating event forces it to temporarily close down.
But the calculations and coverage of business interruption policies is complicated and mounds of paperwork are often required to support a claim. To make matters worse, most policies don’t specify exactly what support documents are required and it isn’t uncommon for claims to be denied. Read more
Federal Contractors Get a Minimum Wage Increase in 2018
Minimum wage for federal contractors will increase to $10.35 in 2018.
The U.S. Department of Labor’s Wage and Hour Division (WHD) has announced that the minimum wage rate for federal contractors will increase from $10.20 per hour to $10.35 per hour, effective January 1, 2018. Read more
Beware of a 100% Personal Liability Penalty
A “100% penalty” can be assessed against a responsible person when federal income tax and/or federal employment taxes are withheld from employee paychecks but aren’t handed over to the government.
This Trust Fund Recovery Penalty got its informal “100% penalty” moniker from the fact that the entire unpaid amount can be assessed against a responsible person (or several responsible persons). The purpose of the penalty is to collect withheld but unpaid federal taxes from individuals who had control over an employer’s finances.
Often, operating a business as a corporation protects the individual owner from personal liability for some corporate debts. In cases of unpaid payroll taxes, however, the corporate shield or corporate veil is “pierced” and the IRS looks past the corporation to the responsible person to pay the debt.