IRC Section 162

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:

Tax Treatment of Business Entities Part 4: C Corporations

Startup business owners must consider the legal and tax considerations associated with selecting a particular type of business structure. This is the fourth part of a series of blogs on the tax treatment of business entities. This blog will address the tax treatment of corporations, often referred to for tax purposes as C corporations.

Like an individual person, a corporation may be taxed and held legally liable for its actions. Individual shareholders are generally not personally liable for the debts of a corporation. This is one of the primary reasons that corporations are formed. When one or more individuals form a C corporation, they create an entity with two separate types of taxpayers, the corporation, and the shareholders. As a separate tax-paying entity, a corporation files Form 1120 or 1120-A, U.S. Corporation Income Tax Return.

Can You Write Off Your (Expensive) Work Clothes?

Most employers impose a dress code for the office. As a result, there are more than a few members of the American workforce who must purchase items including expensive suits, dresses, shirts, blouses, and shoes to observe an employer’s dress code. Many employees have wondered whether the cost of these clothes, often worn only for work, is deductible at tax time.

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