How to Get 100% Reimbursed for Employee Meal Expenses

Many business owners, self-employed individuals, and other taxpayers are aware that business meals and entertainment expenses are only 50% deductible. You might treat a key client to a restaurant meal and spend $100. Even if this meal has a definite business purpose (you wind up with an important contract), only $50 will be tax deductible. Nevertheless, some business meals can be fully deductible. The Tax Court recently overruled the IRS in a case regarding the pro hockey team, the Boston Bruins (Jacobs v. Commissioner, 148…

Portability Election Is Good For Wealthy Business Owners

President Trump’s campaign promise to abolish the federal estate tax may or may not be realized. Meanwhile, the “death tax” still exists, and it continues to be a major concern for high net-worth taxpayers, including the owners of successful small companies. If a deceased taxpayer has a surviving spouse, the estate of the deceased spouse may make a portability election. If this election is made, the unused federal estate tax exclusion of the deceased spouse (called the deceased spouse unused exclusion, or DSUE) can be…

Teaching Children About Money Can Be Fun

An AICPA survey discovered that parents are more likely to talk with their children about manners, eating habits, school grades, and substance abuse than about finances. All these topics are important, but it’s also vital to teach your kids the basics of handling money. This conversation can begin when children are very young—even before they start kindergarten. One tactic is to give each child a piggy bank, which might hold spare change and even dollar bills. Once the children reach the age when they start…

Tax Credits Aren’t Just for Individuals

Just as individuals get a dollar-for-dollar tax savings from tax credits, the same is true for businesses that qualify for tax credits. The Protecting Americans from Tax Hikes (PATH) Act of 2015, passed in 2016, expanded the ability of small companies to use the research and development (R&D) tax credit. The R&D credit is based not on the total amount a business spends on R&D, but on increases in R&D spending. Not only is a tax credit better than a tax deduction, but R&D costs…

Tax credits or deductions – which is right for you?

Many people prize tax deductions. The promise of a deduction can affect decisions in many areas, including charitable contributions, home buying, and investing in rental property. However, tax deductions offer only partial relief because they reduce income, not the tax bill. The higher your income and tax bracket, the more you’ll benefit from a tax deduction. Example 1: Heidi Jones has recently finished her education and joined the work force. With a modest income, Heidi is in a 15% tax bracket. If Heidi donates $1,000…