Returning Value Blog

To put the early phase of building a startup business into context, consider dating. You remember that, right? Daters find each other through different avenues, get together, gauge their respective interest in one another, and then pursue a relationship or go their separate ways.

Projecting your business income and expenses for this year and next can allow you to time when you recognize income and incur deductible expenses to your tax advantage. Typically, it’s better to defer tax. This might end up being especially true this year, if tax reform legislation is signed into law.

When businesses provide meals to their employees, generally their deduction is limited to 50%. But there are exceptions. One is if the meal qualifies as a de minimis fringe benefit under the Internal Revenue Code.

With an employee stock ownership plan (ESOP), employee participants take part ownership of the business through a retirement savings arrangement. Meanwhile, the business and its existing owner(s) can benefit from some potential tax breaks, an extra-motivated workforce and potentially a smoother path for succession planning.

It’s common for a business to own not only typical business assets, such as equipment, inventory, and furnishings but also the building where the business operates — and possibly other real estates as well. There can, however, be negative consequences when a business’s real estate is included in its general corporate assets. By holding real estate in a separate entity, owners can save tax and enjoy other benefits, too.

If your employees incur work-related travel expenses, you can better attract and retain the best talent by reimbursing these expenses. But to secure tax-advantaged treatment for your business and your employees, it’s critical to comply with IRS rules.

Reap tax rewards for travel and entertainment

What are your plans for the summer? If you have a business trip scheduled for a place you would like to visit personally, you might decide to combine a little pleasure with your business. Similarly, you may invite some of your best clients to your home for a Memorial Day or Fourth of July barbecue or treat them to a night out on the town.

Section 179 provides generous tax break

There is a unique tax break for business entities of all shapes and sizes contained in Section 179 of the Internal Revenue Code. Under this section, a business can elect to “expense,” or currently deduct, the cost of qualified property placed in service during the year, up to a maximum level. It is near-instant tax gratification.

Undoubtedly, the national elections will have an impact on personal taxes for years to come. But it is unlikely that a lame-duck Congress will enact changes that will significantly affect tax planning for 2016. Accordingly, here are seven tax moves for individuals to consider at the end of this year.