Recent News & Blog / Business Tax
The tax advantages of including debt in a C corporation capital structure
Let’s say you plan to use a C corporation to operate a newly acquired business or you have an existing C corp that needs more capital. Be aware that the federal tax code treats corporate debt more favorably than corporate equity. So for shareholders of closely held C corps, it can be a tax-smart move to include in the corporation’s capital structure some third-party debt (owed to outside lenders) and/or some owner debt. The reasons have to do with the income tax rate, the capital gains / dividend tax rate and the double taxation that occurs when a corporation pays tax on its profits and shareholders pay tax again when the profits are distributed as dividends. Contact the CPAs and business tax advisors at SEK about your situation.
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.
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.
When businesses may want to take a contrary approach with income and deductions
In general, businesses want to delay taxable income into future years and accelerate deductions into the current year. But they sometimes want to do the opposite. There are ways to accelerate income into the current year and delay deductions to later years. Contact the CPAs and business tax advisors at SEK for help and to answer your tax questions.
Don’t have a tax-favored retirement plan? Set one up now
If your business doesn’t already have a retirement plan, it might be a good time to take the plunge. There are several retirement plan options for different contribution limits. We can provide information on the best one for you. Contact the CPAs and business tax advisors at SEK for more info and answers to your tax questions.
Scrupulous records and legitimate business expenses are the key to less painful IRS audits
If you operate a business, you know records of income and expenses need to be kept. Specifically, you should carefully record expenses to claim all the tax deductions to which you’re entitled. And you want to make sure you can defend the amounts reported on your tax returns in case you’re ever audited by the IRS. Contact the CPAs and business tax advisors at SEK with questions.
2024 Q2 tax calendar: Key deadlines for businesses and employers
Here are some key tax deadlines for businesses during the second quarter of 2024. Contact the CPAs and business tax advisors at SEK to learn more about filing requirements and to answer your tax questions.
Court rules corporate reporting law is unconstitutional but requirements remain
Under the Corporate Transparency Act (CTA), many businesses had to begin complying with new reporting requirements on January 1, 2024. But on March 1, 2024, the U.S. District Court for the Northern District of Alabama ruled that the CTA is unconstitutional.
Coordinating Sec. 179 tax deductions with bonus depreciation
Your business should generally maximize current year depreciation write-offs for newly acquired assets. Two federal tax breaks can help achieve this goal: first-year Section 179 depreciation deductions and first-year bonus depreciation deductions. These deductions can potentially allow businesses to write off some or all of their qualifying expenses in Year 1. Contact the CPAs and business tax advisors at SEK for more information on tax deductions and for more tax tips.
Bartering is a taxable transaction even if no cash is exchanged
If your small business is strapped for cash (or likes to save money), you may find it beneficial to barter for goods and services. Bartering isn’t new, but the internet has made it easier. However, if your business barters, be aware that the fair market value of goods you receive is taxable income. And if you exchange services with another business, the transaction results in taxable income for both parties. Contact the CPAs and business tax advisors at SEK if you’d like assistance or more tax tips.