By month: September 2020

No PPP Loans Today, but You Can Still Get $150,000 from the SBA

Forgivable Payroll Protection Program (PPP) loans are over for now, but if your business is still suffering due to the COVID-19 pandemic, you can get up to $150,000 with an SBA Economic Injury Disaster Loan (EIDL). Unlike the PPP loan, the EIDL has no forgiveness possibility. You have to pay off the loan. The interest rate and terms are better than commercial loans, but there are many strings attached to these low-interest EIDLs.

Yes, the Antique Chair Is Deductible

Is a $10,000 antique chair deductible as an ordinary and necessary business expense? Would the tax law deem it a non-deductible lavish and extravagant asset? Good news: it qualifies as an ordinary and necessary depreciable asset, as explained in this article.

PPP Update: Two New Rules for Owners of S and C Corporations

The Payroll Protection Program (PPP) rules—they keep a-changin’. In this article, you find new rules that likely increase PPP loan forgiveness for S and C corporation owner-employees with compensation of $100,000 or more.

Thinking of Moving to a Lower-Tax State? Tax Angles to Consider

If you are thinking of moving to a state that levies no personal income taxes, you need to consider all the other taxes, including property, sales, estate, and inheritance. And then, if you decide to make the move, you need to establish your domicile in the new state to decouple yourself from the old state.

Seven Things to Know Before You Take Out an EIDL

Your businesses can borrow up to $150,000 from the Small Business Administration (SBA) with a low-interest Economic Injury Disaster Loan (EIDL). But you and/or your business will be subject to some strict SBA requirements for SBA permission before making changes to your business or distributing its assets. You’ll also have to keep extensive records, and you may have to pledge all your business assts (other than real estate) as collateral.

Don’t Let Section 179 Recapture Hurt You

Your claim to Section 179 expensing comes with strings. You make a deal with the government to keep your business use above 50 percent during the depreciation periods for the assets that you expensed. If you violate your agreement, and depending on when you do that, the government can show up and recapture a big chunk of your Section 179 expensing.

What Is the Unpardonable Sin in an IRS Audit?

If you or your corporation is unlucky enough to face an IRS audit, there is one record that stands out as critical to your audit health. If you are missing this one record, the IRS examiner knows that he or she should quickly expand to other areas of your tax return.

Best Choice: De Minimis or 179 Expensing—or Bonus Depreciation?

The Tax Cuts and Jobs Act (TCJA) tax reform gives you bonus depreciation as a method for deducting 100 percent of the cost of certain business assets. You also have the de minimis safe harbor for certain assets costing $2,500 or less ($5,000 or less with the applicable financial statement). And finally, the TCJA tax reform enhanced the Section 179 deduction. Which is the best choice for you?

Case Study: Trade-In on a New SUV—Reimbursement by Corporation

Do you operate your business as a corporation but own your business vehicle personally? If yes, what happens when you trade your existing personal vehicle for a replacement personal vehicle and then have the corporation reimburse you for the newly purchased personal vehicle? There are nuances that you need to know, as we explain in this article.

 

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