Bonus Depreciation Businesses also can claim a 100% bonus first year depreciation deduction for machinery and equipment bought used (with some exceptions) or new if purchased and placed in service this year, and for qualified improvement property, described above as related to the expensing deduction. The 100% write-off is permitted without any proration based on…
Business Property Expensing Options Businesses should consider making expenditures that qualify for the liberalized business property expensing option. For tax years beginning in 2020, the expensing limit is $1,040,000, and the investment ceiling limit is $2,590,000. Expensing is generally available for most depreciable property (other than buildings) and off-the-shelf computer software. It is also…
Cash Method of Accounting More small businesses are able to use the cash (as opposed to accrual) method of accounting than were allowed to do so in earlier years. To qualify as a small business a taxpayer must, among other things, satisfy a gross receipts test. For 2020, the gross-receipts test is satisfied if, during…
Qualified Business Income Deduction Taxpayers other than corporations may be entitled to a deduction of up to 20% of their qualified business income. For 2020, if taxable income exceeds $326,600 for a married couple filing jointly, $163,300 for singles, marrieds filing separately, and heads of household, the deduction may be limited based on whether the…
Health Coverage Terms Employers Should Know Under the Affordable Care Act, certain employers – known as applicable large employers – are subject to the employer shared responsibility provisions. You might be thinking about these topics as you make plans about 2021 health coverage for your employees. If you are an employer that is subject to…
Choosing a Retirement Destination: Tax Considerations With health care, housing, food, and transportation costs increasing every year, many retirees on fixed incomes wonder how they can stretch their dollars even further. One solution is to move to another state where income taxes are lower than the one in which they currently reside. While federal tax…
Taking Early Withdrawals From Retirement Accounts While taking money out of a retirement fund before age 59 1/2 is usually not recommended, in certain cases, it may be unavoidable, especially during times of economic crisis. If you need cash and have a retirement fund you can tap, here’s what you need to know. Background When…
Tax Treatment of Virtual Currency Transactions Whether you’ve invested in Bitcoin and sold it at a profit or loss or received it for services performed, you’ll need to report it on your tax return. Here’s what you should know: Background Prior to 2014, there was no IRS guidance and many people did not understand that…
Preparing for a Successful Retirement As you approach retirement, it’s vital that you pay attention to several important financial matters to ensure a smooth transition. Here are five of them: 1. Health Insurance Are you among the lucky few who will continue to be covered after retirement? If not, then you’ll need to replace your…
The Home Office Deduction With more people working from home than ever before, taxpayers may be wondering if they can claim a home office deduction when they file their 2020 tax return next year. The short answer is that self-employed taxpayers who use their home for business may be able to deduct expenses for the…