Business Expenses

Getting a New Car for Business? Buy or Lease? Part 2: Tax Consequences

This blog will address the tax consequences of both leased and owned vehicles used for business purposes. Hopefully, it will offer some insight into the decision as to what is best for your business: buying or leasing?

With both owned and leased cars, any related expenses may be deducted using the standard mileage rate or the total amount of actual expenses. If the vehicle is owned, you may choose the standard mileage rate in the first year and switch to the actual expense method in a later tax year. If a vehicle is leased, you may also choose the standard mileage rate in the first year but once you the standard mileage rate is chosen, it must be used for the life of the lease.

Getting a New Car for Business? Buy or Lease? Part 1: Leased Vehicles

Many business owners rely on transportation to achieve the goals and purposes of their business. A car purchased for use in a business has certain tax advantages for the owner. However, many business owners are now leasing cars for business use. More Americans lease autos than ever before because of attractive monthly costs and the ability to change cars frequently to keep up with new technology and safety features. But what’s better for your business, an owned or leased car?

Hobby v. Business Loss – Ramifications Of The Herb Vest, TC Memo 2016-187

The rules for reporting the income and expenses associated with a “hobby” or “pastime” is dependent upon whether or not the activity has the genuine purpose of making a profit. The Herb Vest case is an interesting Tax Court Memorandum decision regarding a wealthy taxpayer’s attempt to deduct from gross income, expenses related to the investigation of his father’s mysterious death. Among several issues discussed in the case, the Tax Court discussed not-for-profit activities and the factors considered in determining profit objective.

Customer Based Tax Incentives For Businesses

Taking advantage of tax incentives makes good sense for businesses. One reason a business owner should use tax incentives is to help underwrite the cost of maintaining its existing customer base, while continually striving to increase it. Whether a sole proprietorship, partnership, corporation, S corporation, or limited liability company (LLC), certain customer-based tax incentives may help a business reduce taxes.

The first priority for the owner of a business enterprise is to reduce taxable income by taking all of the deductions to which it’s entitled as business expenses. If the expense is ordinary and necessary to the business, it may be deducted under I.R.C. § 162. As defined by the Supreme Court:

Trump’s Tax Plan Then And Now, Part 2

Every American taxpayer is waiting to see what specific tax plan Donald Trump will implement as President of the United States. The first part of this blog addressed the differences between Trump’s 2015 proposed tax plan and his current 2016 tax plan. While there are differences, there are, of course, the constants in Trump’s tax proposals, which demonstrate the tax policies that Trump has emphasized as important from the beginning of his presidential candidacy.

IRS Announces 2017 Standard Mileage Rates for Business, Medical and Moving

Taxpayers should know the 2017 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. The standard mileage rate for business is based on an annual study of both fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based solely on the variable costs.

While the 2017 business mileage rate decreased half a cent per mile from 2016, the medical and moving expense rates each dropped 2 cents per mile. Set by statute, the charitable rate remains unchanged. Effective Jan. 1, 2017, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) is:

President Trump’s 2005 Tax Returns – What It Tells Us

President Trump’s 2005 Tax Return – What It Tells Us

Yesterday, Tuesday March 14, 2017, while most of the New England area was buried in snow, MSNBC published President Trump’s 2005 income tax return – or at least the first two pages of it.  What does the return tell us and what does it not?

The Basics – We know he had a positive income in the amount of $152,737,866 and $103,201,242 in tax write-offs.  He paid a total of $38,435,451 in taxes for the year.

Tax Treatment of Business Entities Part 3: Partnership

Startup business owners must consider the legal and tax considerations associated with selecting a particular type of business structure. This is the third part of a series of blogs on the tax treatment of business entities. This blog will address the tax treatment of partnerships.

A partnership is an association of two or more persons who carry on a trade or business. Each partner shares in the profits and losses of the business enterprise, while contributing money, property, labor or skill to its operation.

Tax Treatment of Business Entities Part 2: LLCs

Startup business owners must consider the legal and tax considerations associated with selecting a particular type of business structure. This is the second part of a series of blogs on the tax treatment of business entities. This blog will address the tax treatment of limited liability companies (LLCs). LLCs are used by many business owners because, like corporations, their owners typically have limited personal liability for the debts and activities of the LLC. In contrast, some features of LLCs are similar to a partnership, such as pass-through or flow-through taxation.

Tax Treatment of Business Entities Part 1: Introduction

When starting a business enterprise, one of the most significant and important decisions to make is the choice regarding the legal form to use in operating the business. The alternatives include sole proprietorship, partnership, corporation (C corporation), S corporation, and limited liability company (LLC). Startup business owners must consider the legal and tax considerations associated with selecting a particular type of business structure. This is the first part of a series of blogs on the tax treatment of business entities.

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