Recent News

The possible tax landscape for businesses in the future

Get ready: The upcoming presidential and congressional elections may significantly alter the tax landscape for businesses in the United States. The reason has to do with a tax law that’s scheduled to expire in about 17 months and how politicians in Washington would like to handle it. How we got here The Tax Cuts and Jobs Act (TCJA), which generally took effect in 2018, made extensive changes to small business taxes. Many of its provisions are set to expire on December 31, 2025. As we get closer to the law sunsetting, you may be concerned about the future federal tax bill...

Business website expenses: How they’re handled for tax purposes

Most businesses have websites today. Despite their widespread use, the IRS hasn’t issued formal guidance on when website costs can be deducted. But there are established rules that generally apply to the deductibility of business expenses and provide business taxpayers launching a website with some guidance about proper treatment. In addition, businesses can turn to IRS guidance on software costs. Here are some answers to questions you may have. What are the tax differences between hardware and software? Let’s start with the hardware you may need to operate a website. The costs fall under the standard rules for depreciable equipment....

Closing a business involves a number of tax responsibilities

Controlling costs is fundamental for every business. But where and how to address this challenge can change over time based on various economic and logistical factors. Earlier this year, global consultancy Boston Consulting Group published a report entitled The CEO’s Guide to Costs and Growth. Within it were the results of a survey of 600 C-suite executives that found, among other things, cost management was a top priority for respondents heading into 2024. According to the survey, three of the top categories for cost-cutting initiatives were: 1. Supply chain / manufacturing. Not every company incurs manufacturing costs, but most have a...

If your business has co-owners, you probably need a buy-sell agreement

Are you buying a business that will have one or more co-owners? Or do you already own one fitting that description? If so, consider installing a buy-sell agreement. A well-drafted agreement can do these valuable things: Transform your business ownership interest into a more liquid asset, Prevent unwanted ownership changes, and Avoid hassles with the IRS. Agreement basics There are two basic types of buy-sell agreements: Cross-purchase agreements and redemption agreements (sometimes called liquidation agreements). A cross-purchase agreement is a contract between you and the other co-owners. Under the agreement, a withdrawing co-owner’s ownership interest must be purchased by the...

Be aware of the tax consequences of selling business property

If you’re selling property used in your trade or business, you should understand the tax implications. There are many complex rules that can potentially apply. To simplify this discussion, let’s assume that the property you want to sell is land or depreciable property used in your business, and has been held by you for more than a year. Note: There are different rules for property held primarily for sale to customers in the ordinary course of business, intellectual property, low-income housing, property that involves farming or livestock, and other types of property. Basic rules Under tax law, your gains and...

Could a 412(e)(3) retirement plan suit your business?

When companies reach the point where they’re ready to sponsor a qualified retirement plan, the first one that may come to mind is the 401(k). But there are other, lesser-used options that could suit the distinctive needs of some business owners. Case in point: the 412(e)(3) plan. Nuts and bolts Unlike 401(k)s, which are defined contribution plans, 412(e)(3) plans are defined benefit plans. This means they provide fixed benefits under a formula based on factors such as each participant’s compensation, age and years of service. For 2024, the annual benefit provided by 412(e)(3)s can’t exceed the lesser of 100% of a...