Maximize Business Expenses

by Mounica Kota | Jan 19, 2019 | Investment & Income, New Business, Taxtips

Maximize Business Expenses

Maximize Business Expenses: Beginning in 2018, business owners are able to write off most business purchases using the very liberal 100% bonus depreciation and the Sec. 179 expensing allowance. The property must be placed in service during the tax year for which the deduction is being claimed.

Changing jobs is a part and parcel of life. One can either look for better job opportunities or could be unfortunately part of corporate downsizing. In either case, there could be quite a few tax implications and impacts on your Tax benefits.

Being aware of them will help you overcome such situations gracefully. Here are the top tax benefits that you should not forget while switching jobs or businesses.

Withholding Tax

A vast majority of employees have a lot of taxes deducted from their paycheck. In fact, the number stands at about 100 million people receiving a fat refund cheque. With a new job, you have the option to set it right.

With your new employer, it is time to revisit your W4 form.
Allowances section in the form determines the amount of taxes that you will have to pay or the amount that is withheld from your income.
Do you choose the right structure for your business? How your business is structured can have a significant impact on the taxes that you pay. For example LLC’s, S-corporations are Pass-through entities which means your profit will be taxed at the ordinary tax rate, while shareholders of C Corp are taxed at corporate tax rate and then again when they report the distribution on their tax return, as a result, the income is “Taxed Twice”

Do you choose the right structure for your business?

by Mounica Kota | Dec 17, 2018 | Taxtips

Do you choose the right structure for your business?

Do you choose the right structure for your business? How your business is structured can have a significant impact on the taxes that you pay. For example LLC’s, S-corporations are Pass-through entities which means your profit will be taxed at the ordinary tax rate, while shareholders of C Corp are taxed at corporate tax rate and then again when they report the distribution on their tax return, as a result, the income is “Taxed Twice”

Business Owners Need To Prove Your Business to IRS.

by Mounica Kota | Nov 13, 2018 | Business Incorporation, New Business

Business Owners Need To Prove Your Business to IRS.

You might be surprised to learn that, as business owners, you actually have to prove to the IRS that you’re in business to make a profit. If the IRS thinks that the activity that you think of as your business is not actually a business, but a Hobby, the Tax consequence can be disastrous.

A lot of business entities in their initial stages have no clue regarding their strategy. The strategy is essential in understanding your goals and what steps you need to take to reach those. While starting a business, make sure you are clear about a few things.

Having your priorities sorted out ensures you have no ambiguity during stressful situations. You also need to put in some thoughts as to how you are going to generate more business. Also, have your success parameters well defined during the initial stages. Reaching those milestones will give you a sense of accomplishment and also morale boost to try for the next milestone.

This is rather one of the most common mistakes made by owners while starting out a business. In the nascent phases, funding would be very restricted, so you would want to make the most of it. There is absolutely nothing wrong with striving for the very best, but it can be expensive in the initial days. More so if you are trying to do it all by yourself.

You can start by focusing on the basics and getting your products or services correct. Once you slowly build your organization, you can hire people with experience in specific fields to help you out. Outsourcing certain parts of your business might seem odd at first, but it usually is a cost-effective and productive way.