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Estimated tax payments: Who owes them and when is the next one due?

If you don’t have enough federal tax withheld from your paychecks and other payments, you may have to make estimated tax payments. This is the case if you receive interest, dividends, self-employment income, capital gains or other income. Here are the applicable rules for paying estimated tax without triggering the penalty for underpayment. When are the payments due? Individuals must pay 25% of a “required annual payment” by April 15,Read More »Estimated tax payments: Who owes them and when is the next one due?

5 common billing methods in the construction industry

Your neighborhood ice cream shoppe no doubt operates under a simple fixed price, point-of-sale billing method. Construction companies don’t have it so easy. Because of the project-based, decentralized nature of construction work, contractors need to use various billing methods. Let’s review the five most common in case you might be overlooking an approach that could better suit your business needs. 1. Lump sum Sometimes known as fixed price, lump sumRead More »5 common billing methods in the construction industry

How to treat business website costs for tax purposes

These days, most businesses have websites. But surprisingly, the IRS hasn’t issued formal guidance on when website costs can be deducted. Fortunately, established rules that generally apply to the deductibility of business costs provide business taxpayers launching a website with some guidance as to the proper treatment of the costs. Plus, businesses can turn to IRS guidance that applies to software costs. Hardware versus software Let’s start with the hardwareRead More »How to treat business website costs for tax purposes

Is your withholding adequate? Here’s how to check

When you filed your federal tax return this year, were you surprised to find you owed money? You might want to change your withholding so that this doesn’t happen again next year. You might even want to adjust your withholding if you got a big refund. Receiving a tax refund essentially means you’re giving the government an interest-free loan. Adjust if necessary Taxpayers should periodically review their tax situations andRead More »Is your withholding adequate? Here’s how to check

Three tax breaks for small businesses

Sometimes, bigger isn’t better: Your small- or medium-sized business may be eligible for some tax breaks that aren’t available to larger businesses. Here are some examples. 1. QBI deduction For 2018 through 2025, the qualified business income (QBI) deduction is available to eligible individuals, trusts and estates. But it’s not available to C corporations or their shareholders. The QBI deduction can be up to 20% of: QBI earned from aRead More »Three tax breaks for small businesses

How to avoid the early withdrawal tax penalty on IRA distributions

When you take withdrawals from your traditional IRA, you probably know that they’re taxable. But there may be a penalty tax on early withdrawals depending on how old you are when you take them and what you do with the money. Important: Once you reach a certain age, you must start taking required minimum distributions from your traditional IRAs to avoid a different tax penalty. Previously, the required beginning dateRead More »How to avoid the early withdrawal tax penalty on IRA distributions

Give your construction company’s bonding capacity a solid foundation

A high bonding capacity is a strategic objective of many construction businesses. Knowing you can get the necessary underwriting from your surety gives you the freedom to bid on jobs well suited to your strengths — not to mention bigger projects with greater potential for profitability. And this goal has become even more important since the passage of the Infrastructure Investment and Jobs Act. But how do you build thatRead More »Give your construction company’s bonding capacity a solid foundation

Give your construction company’s bonding capacity a solid foundation

A high bonding capacity is a strategic objective of many construction businesses. Knowing you can get the necessary underwriting from your surety gives you the freedom to bid on jobs well suited to your strengths — not to mention bigger projects with greater potential for profitability. And this goal has become even more important since the passage of the Infrastructure Investment and Jobs Act. But how do you build thatRead More »Give your construction company’s bonding capacity a solid foundation

Important considerations when engaging in a like-kind exchange

A business or individual might be able to dispose of appreciated real property without being taxed on the gain by exchanging it rather than selling it. You can defer tax on your gain through a “like-kind” or Section 1031 exchange. A like-kind exchange is a swap of real property held for investment or for productive use in your trade or business for like-kind investment real property or business real property.Read More »Important considerations when engaging in a like-kind exchange

The kiddie tax: Does it affect your family?

Many people wonder how they can save taxes by transferring assets into their children’s names. This tax strategy is called income shifting. It seeks to take income out of your higher tax bracket and place it in the lower tax brackets of your children. While some tax savings are available through this approach, the “kiddie tax” rules impose substantial limitations if: The child hasn’t reached age 18 before the closeRead More »The kiddie tax: Does it affect your family?

Reviewing revenue recognition for construction companies

While many businesses handle sales in a single transaction, construction contracts often cover months or even years and include multiple payments. As you’re well aware, the longer-term nature of construction projects can prevent contractors from billing and collecting on a timely basis, which can lead to accounting, tax and cash flow complications. From an accounting perspective, the term “revenue recognition” refers to precisely how you determine when you’ve received paymentRead More »Reviewing revenue recognition for construction companies

The tax obligations if your business closes its doors

Sadly, many businesses have been forced to shut down recently due to the pandemic and the economy. If this is your situation, we can assist you, including taking care of the various tax responsibilities that must be met. Of course, a business must file a final income tax return and some other related forms for the year it closes its doors. The type of return to be filed depends onRead More »The tax obligations if your business closes its doors

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