Important planning tool for business owners
A buy–sell agreement can be critical to a business owner intending to sell the business interest or needing to accommodate other changes within the organization. Typically, it can help ease a transition in leadership to the younger generation.
Posted in Business Advisory
Divide interest into these categories
Are interest expenses deductible? The answer is a complicated “yes and no.” Essentially, it depends on the type of interest expense incurred. Although there are technically other types, interest expenses can be lumped into four main baskets for tax purposes.
Posted in Individual Tax Planning
As employers have increasingly turned to high-deductible healthcare plans to offset sharp increases in employees’ healthcare plan costs, some employees have taken advantage of available Health Savings Accounts (HSA) as a way to manage these high deductions. Similar to an IRA, employees contribute a certain percentage of their pay through pre-tax deductions that accumulate tax-free until the money is spent on approved medical costs.
Posted in Tax Planning
Understand and realize the key differences
Don’t be fooled into thinking that cash flow and profit are the same thing. In fact, there are major differences. Cash flow is dynamic and moves daily, while profit is a snapshot of income and expenses at a specific point in time. Understanding this comparison, and acting upon it, can be significant for a small-business operation.
Posted in Business Advisory
The Research Credit Is Back for Good
Like Arnold Schwarzenegger’s character in The Terminator, the research credit is back. This valuable tax break, which had officially expired and been restored more than a dozen times in the past, was extended again by the Protecting Americans from Tax Hikes (PATH) Act, retroactive to the beginning of 2015. What’s more, the credit has been made permanent, with certain modifications, by the new PATH Act.
Posted in Tax Planning
By leveraging our membership in BDO Alliance USA, Machen McChesney can offer greater technical knowledge in specialty areas such as Online Incentives Exchange ("OIX"). BDO is now a member of OIX – an online marketplace for buying, selling, and processing transferable federal and state tax credits. Through its OIX membership, BDO is better able to match buyers and sellers of tax credits, streamline the transfer process, and minimize pricing uncertainty.
Posted in Tax Updates
The Opportunity
As you consider ways to reduce your federal, state and local tax liability, be sure you don’t overlook prepaid expensing. Prepaid expenses cover any payments your business is making for goods and services to be received in the near future, such as prepaid insurance and prepaid maintenance agreements. Unlike accrued expenses, your business will receive the benefits of your payment in a later period. For accrual basis taxpayers, this means that the tax deduction for prepaid expenses won’t be available until after the cash has been expended.
Posted in Tax Planning
On February 25, 2016, the FASB issued its highly-anticipated leasing standard
1 for both lessees and lessors. Under its core principle, a lessee will recognize lease assets and liabilities on the balance sheet for all arrangements with terms longer than 12 months. Lessor accounting remains largely consistent with existing U.S. GAAP. The new standard takes effect in 2019 for public business entities and 2020 for all other entities. The ASU is available
here.
Posted in Business Advisory
Maximize tax benefits on 2015 returns
For a small-business owner who works out of his or her personal residence, a home-office deduction can provide significant tax savings, year in and year out. But keeping detailed records is critical. Although you may elect to use a simplified method for deducting home-office expenses on your 2015 tax return, the actual expense method usually produces a bigger deduction.
Posted in Tax Planning
