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 |July 8th, 2022|Categories: Business Operations, Business Tax|Comments Off on Three Ways to Deduct the Cost of Business Property

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 |July 1st, 2022|Categories: BCo Community News, Business Operations, Business Tax|Comments Off on Owning Investment Real Estate through Single Member LLCs

Starting a business and not sure if it’s worth consulting with a professional?

It’s worth it!

Bregante + Company LLP is solidly grounded in the fundamentals of traditional tax and accounting services. However, we believe that our clients especially value our service partnership approach to advising them, and in particular our creative approach to helping protect their interests during certain critical transactions that call for our expertise.

At B+Co, we are able to consult with our clients during the entire life cycle of their businesses; from entity selection and formation (LLC, Corp, Non-Profit), to retirement and business succession planning, and everything in between. Whether a client has one small business or multiple entities involved in diverse business operations, we find that helping our clients focus on long-term considerations and goals results in the […]

By |June 8th, 2021|Categories: BCo Community News, Business Operations, Business Tax|Comments Off on

Further Explanation on 100% of Business Meals Deductibility in 2021 & 2022

On Thursday April 8th, the IRS issued Notice 2021-25 providing further guidance on when the temporary 100% deduction for meals applies and when the 50% limitation continues to apply.  In addition, the IRS explains the term ”restaurant” means a business that prepares and sells food or beverages to retail customers for immediate consumption, regardless of whether the food or beverages are consumed on the business’s premises.

Additional detail is available here:

By |April 19th, 2021|Categories: Business Operations, Business Tax, IRS|Comments Off on Further Explanation on 100% of Business Meals Deductibility in 2021 & 2022

California Supreme Court Ruling Significantly Limits Independent Contractor Classification

The California Supreme Court has established new criteria for classifying workers as Independent contractors.   In Dynamex Operations West, Inc. v. Superior Court, the Court rejected the previous multi-factor test and instead issued a rigid 3-factor test, called the “ABC” test.

Under the ABC test, each of the following three factors must be met in order to classify a worker as an independent contractor:

  1. The worker must be free from the control and direction of the hiring company in performing the work.
  2. The work must take place outside the usual course of the business of the hiring company’s business.
  3. The worker is customarily engaged in an independent established trade, occupation or business.

This ruling will no doubt have a significant impact on gig companies in the Bay Area (Uber, Lyft, and DoorDash, etc.), […]

By |June 6th, 2018|Categories: Accounting & Bookkeeping, Announcements, Business Operations, Business Tax, Individual Tax, IRS, Real Estate, Retirement Planning|Comments Off on California Supreme Court Ruling Significantly Limits Independent Contractor Classification
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