Loans To Relatives PUT ALL FAMILY LOANS IN WRITING Documentation is critical on any family loan. If the loan goes bad, you’ll want to claim a tax deduction. But, without proper paper work, an IRS auditor will say the transaction was a gift, which means no deduction for you and a possible problem with a […]
deduction
Bad Debts – Family Loans
Bad Debts – Family Loans If you made an ill-advised loan to a family member, the saving grace is that you’re allowed to claim a nonbusiness bad-debt deduction. Your write-off is considered a short-term capital loss. So you can use it to shelter your capital gains for the year. If the loss exceeds your gains […]
De Minimus Benefits
De Minimus Benefits Any property or service with a relatively low value is excluded from tax on employees – including owners and partners. This includes occasional meals or supper money, local transportation when working late, holiday or birthday gifts, occasional sporting event tickets and traditional awards.
Computer Software Deduction
Computer Software Deduction The general rule for business software says you must depreciate costs over 36 months. But there are some exceptions you can take advantage of. Specifically: When software is bundled with hardware and sold for a single price, you can treat the whole setup as a new computer. Then you may be able to […]
Holiday Party Deductions
Holiday Party Deductions If you’re hosting a holiday get together for employees, you can slide right by the regular entertainment rules. Instead, you can deduct 100% of your costs – and you don’t even have to talk about business. Just make sure that all your employees are invited. To get the full write-off, you can’t […]
Business Gifts Deduction
Business Gifts Deduction The tax law puts tight wraps on your ability to deduct year-end holiday business gifts to customers and clients. GIVE TO COMPANIES, NOT INDIVIDUALS Your deduction for business gifts is limited to $25 per recipient. But that restriction applies to gifts to people, not companies. So you can give a company […]
Deducting Commuting Costs
Deducting Commuting Costs You can’t deduct the cost of transporting tools, equipment or other materials by car if you would normally have commuted in the car. If you regularly take mass transit to work, you can deduct the additional cost of transportation. For example, an electrician who takes his tools to a work site was […]
Bad Debt Write-Off Allowed For Family Loan
Bad Debt Write-Off Allowed For Family Loan In a recent Tax Court case (McFadden, T.C. Memo.2002-166), the court allowed a parent to claim a bad debt write off of more than $130,000.00 for a loan to his daughter that was used to buy a house. BACKGROUND A bad debt deduction may be available if a […]
Fringe Benefits – Cutting Taxes
Fringe Benefits – Cut Taxes, Win Loyalty Via Tax-Free Commuting Here’s a tax-wise fringe benefit your company should consider: Help employees get to work by providing tax-free transportation. Not only do workers appreciate this perk, but also your company can save big on payroll taxes. In the past, employers could pay the full cost for […]
Start Up Costs – Costs Of Organizing A Corporation
Start Up Costs – Costs Of Organizing A Corporation The costs of organizing a corporation are direct costs of creating the corporation. Clients can amortize an organizational cost only if it meets all of the following requirements: It is for the creation of the corporation; It is chargeable to a capital account; The client could […]