Starting up a business and wondering about how tax deductions will be handled? The most important thing to understand is that most expenses incurred before a business begins functioning cannot be deducted or amortized until the year when the business does become active. Business Expense Basics Section 162 of the Internal Revenue Code allows current deductions for so-called...

Smart company owners and executives obtain business interruption insurance — and possibly contingent business income coverage if the operation relies heavily on outsourcing or a particular supplier. The idea is that the policy will compensate the company for lost earnings if a devastating event forces it to temporarily close down. But the calculations and coverage of...

Favorable depreciation rules for business use of “heavy” SUVs, pickups and vans were locked in by the Protecting Americans from Tax Hikes (PATH) Act of 2015. By taking advantage of these rules, you may be able to write off the entire business-use portion of a heavy vehicle’s cost in the first year. Here’s how it works....

In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, as part of its accounting standards simplification initiative. The scope of the standard applies to all entities that present a classified balance sheet. Under current GAAP, you are required to separate deferred income tax liabilities and assets...

Many business owners fail to follow the strict tax rules for substantiating vehicle expenses. But if your business is audited, the IRS will most likely ask for mileage logs if you deducted vehicle expenses — and it tends to be especially critical of the amount deducted if you’re self employed or you employ relatives. While the...

In recent months, there have been several significant tax developments that affect partnerships. They also apply to multi-member limited liability companies (LLCs) that are treated as partnerships for federal tax purposes. (For simplicity, we’ll use the terms “partnership” and “partner” to refer to all entities and owners that are affected by the developments.) Here are quick...