Many companies start out, and get pretty far down the road, using the “per diem” approach when reimbursing employees for lodging, meals and incidental expenses. Doing so involves the use of either IRS tables or a simplified high-low method to reimburse workers up to...
A great deal of attention is paid to individual tax identity theft — when a taxpayer’s personal information - including their Social Security number - is used to fraudulently obtain a refund or commit other crimes. But businesses can also be victims of tax identity...
In addition to income tax, you must pay Social Security and Medicare taxes on your earned income, such as salary and self-employment income. The 12.4% Social Security tax applies only up to the Social Security wage base of $118,500 for 2016 ($127,200 for 2017). All...
Whether you’re selling your small business or acquiring another company, the tax consequences can have a major impact on the transaction’s success or failure. Consider installment sales, for example. The sale of a small business might be structured as an installment...
If you have incomplete or missing records and get audited by the IRS, your business will likely lose out on valuable business deductions. Here are two recent U.S. Tax Court cases that help illustrate the rules for documenting your business expenses. Case 1:...
Has your small business procrastinated in setting up a retirement plan? You might want to take a look at a SIMPLE IRA. SIMPLE stands for “savings incentive match plan for employees.” If you decide you’re interested in this type of retirement plan, you must establish...
Paying the proper amount of tax by the annual federal income tax filing deadline isn’t always enough to avoid penalties and interest; you must also meet requirements for paying tax throughout the year through withholding and/or quarterly estimated tax payments. If you...
Employers must withhold income and employment taxes (including Social Security) on wages paid to their employees. The taxes must then be paid over to the IRS according to a payroll tax deposit schedule. Some business owners and executives facing a cash flow crunch may...
If you run your business as an S corporation, you’re probably both a shareholder and an employee. As such, the corporation pays you a salary that reflects the work you do for the business — and you (and your company) must remit payroll tax on some or all of your...
The IRS may object to the compensation of a C corporation shareholder-employee. If it’s deemed too high — or not “reasonable” under the circumstances — the IRS could force you to make adjustments that increase taxes. This can be particularly troublesome for C...
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