Growing your business with a new partner: Here are some tax considerations
There are several financial and legal implications when adding a new partner to a partnership. Although the entry of a new partner may seem simple, you should plan properly to avoid tax problems. Contact the CPAs and business tax advisors at SEK for more information and to answer your tax questions.
Who are your customers? QuickBooks Online can tell you
Creating comprehensive, accurate customer profiles in QuickBooks Online takes time.
Are your volunteers risking legal and tax liability?
Nonprofit leaders need to ensure their organizations carry adequate insurance and have risk mitigation policies in place. They also need to ensure that volunteer s are reimbursed only for actual out-of-pocket expenses they’ve incurred on behalf of the organization. Otherwise, reimbursements could be considered taxable income. Contact the CPAs and business advisors at SEK for more information.
Taxes when you sell an appreciated vacation home
If you’re selling a vacation home at a profit, what will you owe in taxes? It depends on whether you’ve used the home as your principal residence for a time or whether you’ve rented it out. If you haven’t done either, the principal home sale gain exclusion tax break (up to $250,000 or $500,000 for a married couple) is unavailable. Other rules apply to a home used as a rental or principal residence. Contact the CPAS and tax advisors at SEK about your situation.
Challenges of valuing family-owned businesses
Family businesses bring valuation challenges. Although roughly 80% to 90% of all businesses in North America are family owned (according to the Family Business Alliance), most of these entities aren’t run like public companies. The differences may require adjustments. Contact the CPAs and business advisors at SEK for help determining what’s appropriate in your case.
When partners pay expenses related to the business
It’s not unusual for a partner to incur expenses related to the partnership’s business. When a partner can be reimbursed for business expenses under a partnership agreement or standard operating procedures, the partner should turn them in for reimbursement. Otherwise, the partner can’t deduct the expenses on his or her tax return. Your business should have a written firm policy that clearly states what will and won’t be reimbursed, including home office expenses. Contact the CPAs and business tax advisors at SEK for your business questions and for more tax tips.
Watch out for “income in respect of a decedent” issues when receiving an inheritance
Most people appreciate inheritances. But in some cases, they may turn out to be too good to be true. “Income in respect of a decedent” (IRD) may create a surprise tax bill for those inheriting certain types of property. Fortunately, there may be ways to minimize the IRD tax bite. Contact the CPAs and tax advisors at SEK for your tax questions.
DOL raises overtime salary threshold
On April 23, 2024, the U.S. Department of Labor (DOL) announced a final rule that significantly increases the minimum salary threshold to qualify for certain overtime exemptions under the Fair Labor Standards Act (FLSA).
Disaster relief charities: Know the rules before providing aid
Tax-exempt disaster relief charities are allowed to provide short-term emergency assistance and long-term aid to ensure that victims have necessities. But they must observe IRS rules. For more help following guidelines, contact the CPAs and business advisors at SEK.