Tax Planning

Discounts on future purchases make for tricky deductions

Today, many retail businesses are running customer loyalty programs that offer customers discounts on future gasoline purchases after they make qualifying purchases. In some cases the discounts are limited to gasoline purchases and customers may end up not using the discount before the expiration date. If your business uses, Generally Accepted Accounting Principals (GAAP), for it’s accounting, you would…

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Is Crowdfunding taxable?

Crowdfunding has become a popular way to raise money for a new venture.  New legislation has created certain exemptions for crowdfunding from SEC registration requirements which has increased the ability of startups to use this option to obtain financing.  However you might be surprised by the tax treatment of crowdfunded contributions to your business.  Since…

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Tricky tax issues with offering gift cards

A recent memorandum from the IRS Chief Counsel contained seemingly good news about the taxation of gift cards.  Unfortunately the IRS couldn’t help but leave themselves a backdoor to challenge business operators, on the subject. When a business receives an advanced payment for the sale of goods, the deferral of taxable income, is by the grace…

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The problem with non qualified deferred compensation plans and FICA

Does your business provide deferred compensation to key employees, aside from qualified retirement plans? If you providing 401K, SEP, SIMPLE type plans for your employees, those are qualified plans. However what if you simply agree to pay a group of executives, future bonuses for their hard work and commitment? Delaying compensation for key players who…

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How to determine if CEO salary is Qualified Research Expense

Qualifying expenses as research for tax purposes is a step toward claiming the Federal Research and Experimentation Credit for your business.  There are a number of criteria to consider when evaluating whether any expenditure qualifies for the credit.  A portion of employee salaries are usually one of the primary costs  that are classified as research.  Can…

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How to defer taxable income with installment sales

If you sell property for a gain, taking a note receivable instead of cash upfront can be a tax deferral opportunity.  The installment method of accounting allows you to report your gain proportionally to the payments received each year.  Thus, you can spread your gain out over the collection period on your note.  Gain on…

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What the IRS considers a reasonable cost

What is reasonable compensation?  That is a common question raised for privately held companies where owners are working in the company as employees.  Legally the owner has the power to control the amount paid to them for compensation but this power comes with additional tax scrutiny.  This is true for both the double taxed Corporation and the…

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Don’t stand out with expenses

I believe in standing out, but not when it comes to your business deductions.  The tax standard for a business is that your deductions should be ordinary and necessary.  That standard can sometimes be subjective and difficult to apply, but when you are paying a related party for service that wasn’t even performed, it’s pretty…

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Permanent Tax Savings for Growth

Who doesn’t want to save money on taxes?   However when it comes to tax planning, entrepreneurs and growth businesses often have a different perspective than high earning individuals and passive investors.  Tax savings for the entrepreneurial business is about minimizing cash paid to governments, to maximize cash used for business growth.  In that regard tax plans…

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How to deduct the cost of internet domain names

Ever thought about how the cost of your internet domain should be handled for tax purposes?  Your internet domain is part of your website address, like the “tyeecarr” in my website, tyeecarr.com.  That combination of letters wasn’t particularly costly to purchase, so I didn’t think twice about how to treat it on my tax return.…

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