If you provide your employee(s) with vehicles for business use, you’ll have to do a little calculating. You see, because your employees personal use of the vehicles must be included in their wages, you’ll need to apply the correct valuation rules. Sound complicated? It is. We’re dealing with the IRS! But don’t worry. We’ll explain the three IRS-approved valuation methods … [Read more...]
Deductions for your “entertainment facilities” (Part 2)
Last month we explained why it’s vitally important to know the law if you want to successfully deduct a beach house, ski chalet, yacht, hunting cabin, or other “entertainment facility.” In this article, Part 2, you’ll learn how to get a nice tax deduction when you use the facility as compensation to certain others. But, as always when you deal with the IRS, the devil is in … [Read more...]
The surprising “Case of The Built-in Desk”
A little while ago I was asked an interesting (if arcane) question by a long-time reader of the Tax Reduction Letter. The gentleman who wrote me recently installed a built-in desk in his home office. He also had a built-in desk installed in a personal (non-business) part of his home. His question? How should he treat the two built-in desks for tax purposes? You’ll hear … [Read more...]
Time to say farewell to your S corporation?
To paraphrase Bob Dylan, “the tax laws they are a changin.” This means that if you’re running your business as an S corporation you need to understand the current law and make plans accordingly. For example, consider this… High individual-rates and low corporate-rates might make a switch to a C corporation a very smart decision. Why should you consider making the change? … [Read more...]
Watch out for the S corporation tax on “built-in-gains”
Do you operate your business as a C corporation? Would you like to turn it into an S corporation? If the answer is “yes,” be very careful! You see the IRS’s “built-in-gains” tax keeps a C corporation from wriggling out of double taxation by switching to an S corporation and then instantly selling or liquidating all its assets. If you want to stay in Uncle Sam’s good … [Read more...]