Tax & Accounting Insights for Irvine, CA. Expert Guidance from Bharmal CPAs
C or S Corporation
When you first see that 21 percent tax rate for the C corporation, you have to think that this could be the choice of entity for your business operation. Further, when you find yourself in the out-of-favor group for the 20 percent deduction, you naturally gravitate to thinking about the C corporation, perhaps as a means of getting even. Let’s [...]
Rental Properties as Business
Does your rental property activity meet the definition of a trade or business activity? If yes, your rentals produce the best possible tax benefits. In general, you report your rental properties on Schedule E of your tax return. When your activity rises to the level of a business, you continue to report the rentals on Schedule E, but with the [...]
Home Office Deduction for Multiple Businesses
The office-in-the-home deduction produces good-to-excellent cash benefits when it eliminates commuting mileage. That’s the result you achieve when you claim an administrative office in your home. To qualify for the home-office deduction, you must use the office exclusively for the business or businesses for which you are claiming the deduction. Your ability to qualify for the office-in-the-home deduction is straightforward [...]
How the Metropolitan Area Rule Affects Business Mileage Deductions
The IRS has ruled that you “may deduct daily transportation expenses incurred in going between your residence and a temporary work location outside the metropolitan area where you live and normally work.” In this favorable ruling, you find two possible impediments: Temporary work location Metropolitan area Temporary Work Location The “temporary work location” is a location where you realistically expect [...]
IRS Audits on Entertainment Deduction
Here’s a true tax story that you will find interesting. John Henry is engaged in an IRS audit, and he has a big problem with his entertainment deductions. John’s first visit with the IRS was unsatisfactory. He did not have any proof of his entertainment costs. The auditor allowed him to return for a second visit, at which point he [...]
Expense Your Business Costs Using the Safe Harbor Method
For 2018, you can elect the de minimis safe harbor to expense assets costing $2,500 or less ($5,000 with audited financial statements or something similar). The term “safe harbor” means that the IRS will accept your expensing of the qualified assets if you properly abide by the rules of the safe harbor. Here are four benefits of this safe harbor: [...]