How likely is it that your business could be audited by the IRS based on your recent tax filing? Here’s what every business owner should know about the IRS audit process. Some business audits occur randomly, but a variety of tax–return–related items are likely to raise red flags with the IRS and may lead to an audit.
Although the drop of the corporate tax rate from a top rate of 35% to a flat rate of 21% may be one of the most talked about provisions of the Tax Cuts and Jobs Act (TCJA), corporations aren’t the only type of entity significantly benefiting from the new law. Owners of noncorporate “pass-through” entities may see some major — albeit temporary — relief in the form of a new deduction for a portion of qualified business income (QBI).
With Black Friday and holiday shopping around the corner, now is the time many businesses start making thank-you gifts to customers, clients, employees and other business entities and associates. Unfortunately, the tax rules limit the deduction for business gifts to $25 per person per year, a limitation that has remained the same since it was added into law back in 1962. Fifty-five years later, the $25 limit is unrealistically small in many business gift-giving situations. Fortunately, there are a few exceptions.
How likely is it that your business could be audited by the IRS based on your recent tax filing? Here’s what every business owner should know about the IRS audit process: Some business audits occur randomly, but a variety of tax-return-related items are likely to raise red flags with the IRS and may lead to an audit.
We’re about to leave 2016, which may go down as one of the most eventful years for investors since the Financial Crisis. The year started with a tumultuous market sell-off, then major geopolitical events including Brexit and the surprise Trump victory. The U.S. stock markets (S&P and Dow Jones) have sky rocketed, the U.S. dollar has soared to its highest level in 14 years and interest rates are on the rise. Some people are concerned. Others may be peering over the bridge’s edge into the icy waters below. There are reasons for nervousness. Control and don’t be discouraged for 2017. Here are three areas all focused on the theme “Be Flexible.”
Among the many controversial topics being batted around this election season, one of the few with any opportunity for bi-partisan support is a reform of the corporate tax code. While it is still an issue that generates strong opinions on either side of the aisle, most politicians and business executives realize that the current corporate tax structure is broken. Despite a corporate tax rate that tops out at 39 percent, the highest in the industrialized world, the U.S. actually has a fairly low “effective tax rate.” U.S.-based companies pay only about 10 percent tax because of numerous tax breaks and tax provisions, according to the Government Accountability Office.
For many people this time of year is a reflection on the successes, and cost for those successes, over the previous year. As people sit down with their certified public accountant or tax preparer, they are often surprised at how much financial growth they have experienced from one year to the next. While this discovery may be a reason to celebrate, when viewed from another angle the same success sometimes causes less happiness when people realize the increase in their taxes.