4Thought Blog

4thought graphic - blog 2020

IRS Raises Standard Mileage Rate for Second Half of 2022 Due to Rising Gas Costs

Posted by Concannon Miller on Tue, Jun 28, 2022

The IRS recently announced it will be increasing the standard mileage rate for qualified business drivers for the second half of 2022.

The adjustment reflects rising costs at the gas pumps this year. It's accompanied by a hike in the standard mileage rate for medical expenses for all taxpayers and moving expenses for active-duty military personnel.

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Topics: Business tax planning, Individual tax planning

Buying a Business? Learn the Tax Implications of Noncompete Agreements

Posted by Concannon Miller on Thu, Jun 2, 2022

Noncompete agreements are commonly included in business purchase transactions to prevent the seller from competing against the buyer for the term of the noncompete agreement. These arrangements are also sometimes called covenants-not-to-compete or noncompete covenants.

Important: Laws regarding noncompete agreements vary from state to state. For example, courts in California generally reject noncompete agreements because state law makes them unenforceable except in limited circumstances. Because noncompete covenants are generally not allowed in the state, California employers often use confidentiality agreements and other types of contracts to protect trade secrets and other information. Still, in many jurisdictions, noncompete covenants can be enforceable if certain conditions are met.

Noncompete agreements have important tax implications. Here are the details.

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Topics: Business tax planning, Business consulting

Work or Pleasure: The Tax Rules for Hybrid Travel in 2022

Posted by Concannon Miller on Tue, May 31, 2022

With business travel picking up again and summer fast approaching, many business owners may be mulling trips that combine work with vacation or other personal activities.

A quick refresher on the IRS rules related to deducting business vs. personal travel costs can help you reduce your tax bill next year.

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Topics: Business tax planning, Individual tax planning

Own an S Corp? Here’s What Fringe Benefits are Taxed

Posted by Concannon Miller on Thu, Apr 21, 2022

In general, the value of statutory fringe benefits paid to employees is exempt from federal income tax. But special rules apply to S corporation shareholders who own 2% or more of a company.

For these owner-employees, several fringe benefits are tax-exempt, but others — including some of the biggest benefits — constitute taxable income. Here's a brief rundown of the tax treatment of fringe benefits for individuals who own 2% or more of an S corporation.

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Topics: Business tax planning

Selling Your Business? Due Diligence, Tax Considerations to Weigh

Posted by Concannon Miller on Tue, Apr 19, 2022

When it comes to selling your business, you must consider the buyer's perspective — not just your own — to get the deal done.

Both sides will require certain due diligence procedures, which take time and patience to get through. Here's what to expect, including some tax considerations.

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Topics: Business tax planning, Business Valuation

Take Advantage of Tax Breaks for Privately-Held Businesses

Posted by Concannon Miller on Thu, Mar 10, 2022

If you own a small or medium-sized business, it may be eligible for some significant tax breaks that aren't available for larger entities.

Here are three examples to consider as you file your tax return for 2021 and plan for 2022.

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Topics: Business tax planning

Some Businesses, Owners with International Income Face New Tax Requirements

Posted by Concannon Miller on Tue, Mar 1, 2022

There are new tax filing requirements for many pass-through businesses for this tax season.

For tax years beginning in 2021, S corporations and partnerships must file Schedule K-2 and Schedule K-3 if the business has relevant international tax items.

The new schedules are intended to provide more transparency and clarity for the owners of pass-through businesses regarding how to calculate their U.S. income tax liability from relevant international items. The IRS designed these specific schedules to replace the current Schedule K-1 reporting for these items so that the information provided to owners is delivered in a standard format with an additional level of detail.

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Topics: Business tax planning

Build Back Better on Hold; Next Up – Federal Tax Extenders

Posted by Concannon Miller on Tue, Feb 22, 2022

While all signs point to the fact that, given the current makeup of the House and Senate, the Build Back Better bill on the table last fall is essentially lifeless, some of the policies contained in the bill may be back in play in 2022.

A possible alternative path for some of the policies contained in the BBB bill is inclusion in smaller, more targeted pieces of legislation. (For prior coverage, see BDO’s alert “The Build Back Better Act in a Legislative Lull”). Whether or not some or all of the tax policies in the BBB bill are revived this year, Congress will nonetheless need to address what has become an almost annual ritual – passing tax extenders legislation.

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Topics: Business tax planning

How Businesses Can Maximize the QBI Deduction Amid the Pandemic

Posted by Concannon Miller on Tue, Feb 15, 2022

Since the qualified business income (QBI) deduction first become available in 2018, things have changed dramatically, mainly due to the various effects of the COVID-19 pandemic.

Possible tax rate increases and inflation have also entered into the mix. How do these developments affect planning to maximize QBI deductions for your business?

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Topics: Business tax planning

Tax Planning: Steps to Take Now for 2021, 2022 Business Taxes

Posted by Andrew Desiderio on Thu, Feb 3, 2022

The past two years have been very challenging for business owners and organizational leaders – we’ve had everything from the great resignation to inflation to pandemic-related compliance. It’s never been harder to spend the time working in and out of your business.

But despite the challenges, there are still some great tax benefits and opportunities for businesses and their owners. While 2021 has ended, there are even some steps you can take now to possibly reduce your tax burden from last year.

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Topics: Business tax planning

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