Business Tax – Bregante+Company LLP

Planning to Deduct for Losses this Tax Season? Be Sure to Read the Fine Print.

Deducting losses is a high-priority item for taxpayers in the highest marginal income tax bracket. The topic will be especially relevant during the 2022 tax compliance season because of recent declines in the stock market and a challenging overall business environment.

With that said, you shouldn’t assume that every business operating loss or capital loss on investments will lead to a 1:1 deduction on your tax return. There are significant limitations and qualifications surrounding these losses, so it’s critical to understand the details.

In this article, we provide a primer on some of the loss limitations that are most likely to affect high income taxpayers during the upcoming tax filing season.

Not All Business Losses Are Tax Deductible

Rising interest rates and other effects of surging inflation have created a challenging environment across industries. […]

By BCo Author|March 15th, 2023|Categories: Business Operations, Business Tax, IRS|Comments Off

Biden Administration’s Proposed 2023 Budget Plan Calls for Corporate & High-Net-Worth Individual Tax Hikes

The Biden administration’s fiscal year 2023 budget blueprint, released on March 28, consists of a mix of familiar proposals and brand-new initiatives that reflect the President’s policy objectives. The proposals are described in more detail in the General Explanations of the Administration’s Fiscal Year 2023 Revenue Proposals, commonly referred to as the “Green Book,” that was released with the budget, and include the President’s now familiar calls for increasing the top corporate tax rate to 28% and the top individual rate to 39.6%.

Among the new proposals, the minimum tax on high-net-worth individuals has garnered considerable press attention.

These proposals, as well as others that have not been closely scrutinized, are described in more detail below.

Corporate Tax Proposals

Raise Corporate Income Tax Rate to 28%

C corporations, unlike an S corporation, the […]

By BCo Tax Committee|August 2nd, 2022|Categories: Announcements, Business Tax, Individual Tax, IRS, Trusts and Estates|Comments Off

Three Ways to Deduct the Cost of Business Property

Under current law, taxpayers have a variety of options for deducting some or all of the cost of property used in business rather than depreciating it over a period of years. Here’s a quick overview of three of them:

De Minimis Expensing Safe Harbor

Taxpayers with “applicable financial statements” (such as a certified audited financial statement) can deduct up to $5,000 per invoice or item for certain tangible property costs to the extent they deduct them for financial reporting or bookkeeping purposes. Those without applicable financial statements can deduct up to $2,500. Certain exceptions apply.

This safe harbor avoids the need to determine whether low-cost items are deductible or must be capitalized, as well as the need to depreciate large numbers of small-dollar capital asset purchases. It does not, however, preclude the deduction […]

By BCo Author|July 8th, 2022|Categories: Business Operations, Business Tax|Comments Off

Owning Investment Real Estate through Single Member LLCs

Over the years, Single Member LLCs (SMLLCs) have grown in popularity among investors and business owners because under the so-called check-the-box regulations, you can generally ignore the existence of a SMLLC for federal tax purposes. When you choose to not treat a SMLLC as a corporation for federal income tax purposes, the entity is disregarded (i.e., it’s a “nothing” for federal income tax purposes). The federal income tax treatment of a disregarded SMLLC is relatively simple because its activities are considered to be conducted directly by the SMLLC’s sole member (owner). For instance, when an individual uses a disregarded SMLLC to own rental real estate, the rental activity is reported on Schedule E of Form 1040. There is no need to file a separate federal income tax return for the […]

By Shannon McKelvey|July 1st, 2022|Categories: BCo Community News, Business Operations, Business Tax|Comments Off

If you have a Limited Liability Company (LLC) in California and owe estimated tax fees for 2021, payment is due June 15, 2021. Payment may be made online with the Franchise Tax Board.

By Michelle Brill|June 9th, 2021|Categories: BCo Community News, Business Tax|Comments Off