The qualified business income (QBI) deduction is available to eligible businesses through 2025. After that, it’s scheduled to disappear. So if you’re eligible, you want to make the most of the deduction while it’s still on the books because it can potentially be a big tax saver.
2024 Depreciation Limits for Business Vehicles
IRS guidance provides the 2024 depreciation limits for “luxury” business vehicles. For vehicles placed in service in 2024, depreciation limits (including first-year bonus depreciation) are $20,400 for year one, $19,800 for year two, $11,900 for year three, and $7,160 for each year after that. This includes passenger cars and SUVs, trucks, and vans if their gross vehicle weight (GVW) is 6,000 pounds or less. The IRS also announced lease inclusion amounts for lessees of passenger vehicles first leased in 2024. Read Rev. Proc. 2024-13 on irs.gov for more details (PDF).
Is Your Business Closing? Here Are Your Final Tax Responsibilities
Businesses shut down for many reasons. Examples include an owner’s retirement, a lease expiration, staffing shortages, partner conflicts, and increased supply costs. If you’ve decided to close your business, you might need assistance with some steps in the process, including handling various tax obligations.
4 Ways C Corporations Ensure “Reasonable” Compensation
If you own a C corporation, you know there’s a tax advantage to taking money out as compensation rather than as dividends. The reason: A corporation can deduct the salaries and bonuses that it pays executives, but it can’t deduct dividend payments. Therefore, if funds are paid as dividends, they’re taxed twice, once to the corporation and once to the recipient. Money paid out as compensation is taxed only once to the recipient employee.
Payable-on-Death Accounts: Beneficial Tools if Used Correctly
Payable-on-death (POD) accounts can be a quick, simple, and inexpensive way to transfer assets outside of probate. They can be used for bank or credit union accounts, certificates of deposit, and even brokerage accounts. Setting up such an account is as easy as providing the financial institution with a signed POD beneficiary designation form. Upon your death, your beneficiaries need to present identification to the bank, with a certified copy of a death certificate, and the money or securities will be theirs.
Is Bartering a Taxable Transaction Even if No Cash Is Exchanged?
If your small business is strapped for cash (or likes to save money), you may find it beneficial to barter or trade for goods and services. Bartering isn’t new — it’s the oldest form of trade — but the internet has made it easier to engage with other businesses.
April 2024 Tax Due Dates
April 15
Individuals: File a 2023 income tax return (Form 1040 or Form 1040-SR) or file for an automatic six-month extension (Form 4868). (Taxpayers who live outside the United States and Puerto Rico or serve in the military outside these two locations are allowed an automatic two-month extension without requesting an extension.) Pay any tax due.
Retirement Saving Options for Your Small Business
Consider some options if you’re looking for a retirement plan for yourself and your employees but are worried about the financial commitment and administrative burdens involved. One possibility is a Simplified Employee Pension (SEP).
This plan, which comes with relative ease of administration and the discretion to make or not make annual contributions, is especially attractive for small businesses.
A Strategy to Raise Your Medical Expense Deduction
With a bit of planning, you may be able to boost your itemized medical expense deduction when you file your 2024 tax return next year. Only eligible expenses exceeding 7.5% of your adjusted gross income are deductible.
It’s not an easy hurdle to clear short of a major medical disaster, which, of course, you want to avoid. But you can use a strategy called “bunching” medical expenses to exceed the 7.5% threshold.
Have You Recently Reviewed Your Life Insurance Needs?
At one time, life insurance played a much more significant part in an estate plan than it does now. Why? Families would often use life insurance payouts to pay estate taxes. But with the federal gift and estate tax exemption at $13.61 million for 2024, far fewer families currently are affected by the estate tax.