4Thought Blog

Does your manufacturing company need to acquire new equipment to meet demand? Fortunately, there's a tax break that can help: the Section 179 deduction.

 It allows you to deduct this year the cost of qualifying new or used property you purchase. Your deduction can even exceed the amount you provided from your own funds to make the purchase.

However, there are two limits on Sec. 179 deductions that might stand in your way. So it's important to understand all the relevant rules.

The 2022 tax year is well underway, and year end will be here before you know it.

Summer is a good time to take proactive steps to help reduce the current year's tax bill.

Here are some federal tax-planning strategies to consider.

Nonprofit organizations have been navigating change in almost every aspect of their operations over the past two years, including shifting priorities, a new employment landscape, and changes in fundraising and hosting programs and events.

As organizations continue to reimagine what their futures will look like, donor engagement strategies should be reevaluated and refined to ensure they keep up with these other changes.

Consider the following steps to support strong donor engagement:

The balance sheet — which shows a company's assets and liabilities — is a logical starting point for valuing certain types of businesses.

The cost (or asset) approach specifically focuses on this part of a company's financial statements. Here's an overview to help you understand this valuation technique.

Companies routinely evaluate opportunities to reduce expenses. With the prices of gasoline, diesel fuel, natural gas and propane surging across the country, many organizations are currently focusing on lowering energy consumption. This process starts with an energy audit.

Not only are many of the savings from an energy audit sustainable, "going green" can also add value by demonstrating responsible business practices and engendering support from environmentally conscientious employees, customers and other stakeholders. Even better, your company may qualify for tax breaks for making energy-saving changes.

An effective energy audit begins with a data gathering exercise. Consider the following nine steps:

Scam artists are impersonating the Department of Revenue by sending Pennsylvania business owners fraudulent letters in the mail that direct them to turn over their accounting records.

The goal of this ploy is to trick unsuspecting taxpayers into providing sensitive financial information, which the criminals behind the scheme can use for a number of illicit activities that could seriously harm a business' financial standing.  

"We are urging Pennsylvania business owners to be on high alert if they receive a suspicious notice that includes the Department of Revenue name and logo,” Revenue Secretary Dan Hassell said in a recent news release.

While many businesses handle sales in a single transaction, construction contracts often cover months or even years and include multiple payments.

As you're well aware, the longer-term nature of construction projects can prevent contractors from billing and collecting on a timely basis, which can lead to accounting, tax and cash flow complications.

From an accounting perspective, the term "revenue recognition" refers to precisely how you determine when you've received payment and when you can record the revenue. Let's review the three most commonly used types of revenue recognition in the construction industry.

One of the advantages of owning and operating your own business is the ability to hire family members to fill open positions.

This can be a significant perk in today's tight labor market. Bringing on family members can have tax benefits for all involved, too, and offers an opportunity to start a retirement savings account for your children.

The potential benefits vary based on such factors as the familial relationship, your children's ages and the type of entity you chose for your business. Here's what you need to know.

Pennsylvania’s new budget for 2022-23 includes several business tax changes, including lower taxes for corporations.

The new budget cuts the corporate net income tax from 9.99% to 8.99% as of Jan. 1, 2023, and then gradually reduces (0.5%) it each year in phases until 2031, when it reaches 4.99%.

Pennsylvania’s corporate net income tax rate is currently the second highest in the nation, behind only New Jersey at 11.5%, according to the Tax Foundation. The 2031 rate will make Pennsylvania’s corporate net income tax the sixth lowest, according to the Pennsylvania Chamber of Business and Industry (PCBI).

Other business tax changes that start Jan. 1 include:

There are several steps to creating and carrying out an estate plan — not all of which will fall on you.

For example, other people must act as your plan's executor and trust's trustee (although they can be the same person). Your responsibility is to name an executor and trustee (if you have a trust) that you know will faithfully follow your instructions and meet fiduciary duties.

Here are brief job descriptions and advice for choosing people to fill these critical roles.