Returning Value Blog

Businesses in certain industries employ service workers who receive tips as a large part of their compensation. These businesses include restaurants, hotels, and salons. Compliance with federal and state tax regulations is vital if your business has employees who receive tips.

The nationwide price of gas is slightly higher than it was a year ago, and the 2025 optional standard mileage rate used to calculate the deductible cost of operating an automobile for business has also gone up. The IRS recently announced that the 2025 cents-per-mile rate for the business use of a car, van, pickup, or panel truck is 70 cents. In 2024, the business cents-per-mile rate was 67 cents per mile. This rate applies to gasoline and diesel-powered vehicles as well as electric and hybrid-electric vehicles.

New and used “heavy” SUVs, pickups, and vans placed in service in 2025 are potentially eligible for big first-year depreciation write-offs. One requirement is that you use the vehicle more than 50% for business. If your business usage is between 51% and 99%, you may be able to deduct that percentage of the cost in the first year. The write-off will reduce your federal income tax bill and your self-employment tax bill, if applicable. You might get a state tax income deduction too.

Owners’ equity is the difference between the assets and liabilities reported on your company’s balance sheet. It’s generally composed of two pieces: capital contributions and retained earnings. The former represents the amounts owners have paid into the business and stock repurchases, but the latter may be less familiar. Here’s an overview of what’s recorded in this account.

If you own a growing, unincorporated small business, you may be concerned about high self-employment (SE) tax bills. The SE tax is how Social Security and Medicare taxes are collected from self-employed individuals like you.

As we approach 2025, changes are coming to the Social Security wage base. The Social Security Administration recently announced that the wage base for computing Social Security tax will increase to $176,100 for 2025 (up from $168,600 for 2024). Wages and self-employment income above this amount aren’t subject to Social Security tax.

Employee health coverage is a significant part of many companies’ benefits packages. However, the administrative responsibilities that accompany offering health insurance can be complex. One crucial aspect is understanding the reporting requirements of federal agencies such as the IRS. Does your business have to comply, and if so, what must you do? Here are some answers to questions you may have.

Timing is critical in financial reporting. Under accrual-basis accounting, the end of the accounting period serves as a “cutoff” for when companies recognize revenue and expenses. However, some companies may be tempted to play timing games, especially at year-end, to boost financial results or lower taxes.

C-level executives today face crucial accounting and finance challenges, including the ongoing shortage of accounting professionals, the struggle to keep up with technology (including AI), and the generally inflationary cost environment. While it may be tempting to view the finance and accounting (F&A) function as an overhead expense to be managed, this approach severely underestimates the F&A function’s strategic impact on business operations. Outsourcing can play a critical role in optimizing the performance and cost of the F&A function, especially when its use is tailored to the company’s specific needs.

If you own a closely held corporation, you can borrow funds from your business at rates that are lower than those charged by a bank. However, it’s important to avoid certain risks and charge an adequate interest rate.