Deducting business meal expenses under today’s tax rules

You probably spend a bundle “wining and dining” customers, vendors and employees. Under current tax law, entertainment expenses are no longer deductible. But you can still deduct 50% of the cost of business-related food and beverages, if you meet certain requirements. What if you buy food and beverages at an entertainment event? You can still…

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Divorcing business owners need to pay attention to tax implications

If you’re getting a divorce, you know it’s a highly stressful time. But if you’re a business owner, tax issues can complicate matters more. For example, you can generally divide most assets, including business ownership interests, between you and your soon-to-be ex-spouse without any federal income or gift tax consequences. When an asset falls under…

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Understanding how taxes factor into an M&A transaction

If your company is merging with or acquiring another business, it’s important to understand how the transaction will be taxed. For tax purposes, a transaction can basically be structured in two ways: stock (or ownership interest) or assets. For tax and nontax reasons, buyers usually prefer to purchase assets, while sellers generally prefer stock sales.…

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An implementation plan is key to making strategic goals a reality

Strategic planning comprises two primary tasks: establishing goals and achieving them. The key to that all-important second task is establishing an implementation plan. First, appoint a leader to communicate and champion your objectives. Next, establish teams of employees to complete goal-related projects. Ensure each team’s members represent a cross-section of your company’s departments. Also, regularly…

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Using knowledge management to develop your succession plan

As you develop your succession plan, you’ll need to consider how to mitigate the loss of pure know-how that will occur when you step down. One way is to implement a knowledge management strategy. This is a formal process of treating knowledge as a valuable company asset. Knowledge generally can be subdivided into two types:…

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Beware the Ides of March — if you own a pass-through entity

Pass-through entity owners: Beware the Ides of March. Shakespeare’s words don’t apply just to Julius Caesar; they also apply to calendar-year partnerships, S corporations and limited liability companies treated as partnerships or S corporations for tax purposes. Why? The Ides of March, better known as March 15, is the federal income tax filing deadline for…

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Best practices when filing a business interruption claim

Business interruption insurance generally provides cash flow to cover revenues lost and expenses incurred while normal operations are suspended because of an applicable event. But submitting a claim can be time-consuming and requires preparation. First, notify your insurer of an interruption immediately and review your policy. Then reorganize your bookkeeping to segregate costs related to…

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When are LLC members subject to self-employment tax?

Limited liability company (LLC) members commonly claim that their distributive shares of LLC income (after deducting compensation for services in the form of guaranteed payments) aren’t subject to self-employment (SE) tax. But the IRS has been seeking back taxes and penalties from LLC members it claims have underreported SE income, with some success in court.…

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Financial statements tell your business’s story, inside and out

As a business evolves, it will encounter the need to build credibility with outside parties, such as investors and lenders, and to make well-informed strategic decisions. In short, financial statements are a necessity. Typical components are an income statement, a balance sheet, and a cash flow statement. Also frequently included: a retained earnings/equity statement and…

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Is your business stuck in the mud with its marketing plan?

A good marketing plan should be like a network of well-paved, clearly marked roads shooting out into the world and leading back to your company. But a business can get stuck in the mud trying to build these thoroughfares. For example, many companies use the same, outdated marketing materials for years. Others overly focus on…

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Many tax-related limits affecting businesses increase for 2019

A variety of tax-related limits affecting businesses are annually indexed for inflation, and many have increased for 2019. For example, the Section 179 expensing limit has gone up to $1.02 million from $1 million. Also up are the income-based phase-ins for certain limits on the new-last-year Sec. 199A qualified business income deduction for owners of…

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Getting wise to the rise of “smart” buildings

If your business is considering upgrading its facility, or moving to or constructing a new one, be prepared to encounter “smart” buildings. A smart building is one equipped with sensors that gather and track information about energy usage. With this data, the building’s energy consumption can be more accurately tracked and regulated to lower costs.…

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