Ways to manage the limit on the business interest expense deduction
Current tax law generally limits deductions of business interest, with certain exceptions. If your business has significant interest expense, it’s important to understand the impact of the Section 163(j) deduction limit on your tax bill. Unless your company is exempt, your maximum business interest deduction for the tax year equals the sum of 1) 30% of your company’s adjusted taxable income (ATI), 2) your company’s business interest income, if any, and 3) your company’s floor plan financing interest, if any. If your company is affected by the business interest deduction limitation, contact us to see if you can avoid it or reduce the impact. We can help assess what’s right for your business.
5 steps to creating a pay transparency strategy
Pay transparency is the practice, or lack thereof, of a company sharing its compensation philosophy, policies and procedures with job candidates, employees and even the public. If your business has yet to formalize or articulate its pay transparency strategy, here are five general steps to creating one: 1) Conduct a payroll audit to get a complete picture of your compensation structure. 2) Define or refine your criteria for making pay decisions. 3) Develop a communications “substrategy” that includes written guidelines and Q&A sessions. 4) Train your supervisors to champion and accurately explain your strategy. 5) Get input from professional advisors such as your attorney and our firm.
Can I itemize deductions on my tax return?
You may wonder if you can claim itemized deductions on your tax return. Perhaps you made charitable contributions and were told in the past they couldn’t be claimed because you didn’t have enough deductions to itemize. How much do you need? You can itemize deductions if the total of your allowable itemized write-offs for the […]
How a business owner’s home office can result in tax deductions
As a business owner, you may be eligible to claim home office tax deductions that will reduce your taxable income. However, it’s crucial to understand the IRS rules to ensure compliance and avoid potential IRS audit risks. There are two methods for claiming this tax break: the actual expense method and the simplified method. Here […]
Are your employees suffering from retirement plan leakage?
Today’s small to midsize businesses are often urged to help employees improve their financial wellness. And for good reason: Financially struggling workers tend to have higher stress and anxiety levels. They may be less productive and more prone to errors. Some might even decide to commit fraud. One hallmark of an employee facing serious financial […]
You may be able to make a deductible IRA contribution for last year this year
Getting ready to file your 2024 return and finding your tax bill is higher than you’d like? There may still be an opportunity to lower it. If you qualify, you can make a deductible contribution to a traditional IRA up until this year’s April 15 filing deadline and benefit on your 2024 return. An eligible taxpayer can make a 2024 IRA contribution of up to $7,000 ($8,000 if you’re 50 or older). You must meet income requirements to qualify. Business owners can also set up and contribute to SEP plans up until the filing due date, including extensions. For 2024, the most you can contribute to a SEP is $69,000. Contact us for more information about growing your nest egg on a tax-favored basis.
Do you have an excess business loss?
If an individual taxpayer has substantial business losses, unfavorable federal income tax rules may come into play. If your business or rental activity throws off a tax loss (and many do during the early years), things can get complicated. For example, you can’t deduct an excess business loss in the current year. For 2024, an excess business loss is the excess of your aggregate business losses over $305,000 ($610,000 for married joint filers). For 2025, the thresholds are $313,000 and $626,000, respectively. An excess business loss is carried over to the following tax year and can be deducted under the rules for net operating loss (NOL) carryforwards. Contact us with any questions.
Changes to Michigan’s Flow-Through Entity Tax
The Michigan House of Representatives approved, and the Senate passed changes to the FTE tax on December 11, 2024. The governor signed the bill on January 17, 2025. The changes are being made due to the challenges in implementation as originally passed. Generally, the changes are effective for the tax years beginning on and after […]
COURT RULING ON BENEFICIAL OWNER INFORMATION REPORTING– FEBRUARY 19, 2025
On February 17th, the United States District Court for the Eastern District of Texas overruled the preliminary reporting injunction on the Smith vs U.S. Department of Treasury case; that means the beneficial owner information reporting requirement is back in effect. As mentioned in our previous BLOG, FINCEN has agreed to a 30 day extension for […]
On developing an effective IT modernization strategy
Information technology (IT) is constantly evolving. The concept and challenge of keeping business technology current is called “IT modernization.” To stay competitive in most industries today, you’ve got to excel at it. However, you also have to approach IT modernization carefully and cost-consciously. Here are four tips: 1) Begin with an IT audit to get a clear picture of your infrastructure, policies, procedures and usage. 2) Align modernization efforts with strategic objectives; keep return on investment in mind. 3) Take a phased, pragmatic approach to initiatives; don’t try to do everything at once. 4) Train and upskill your users so they can roll with the changes. Contact us for help.
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