Can You Turn Business Losses Into Tax Relief?

Even well-run companies experience down years. The federal tax code may allow a bright strategy to lighten the impact. Certain losses, within limits, may be used to reduce taxable income in later years.

05 12 25 2486588637 SBTB 560x292

Who Qualifies?

The net operating loss (NOL) deduction levels the playing field between businesses with steady income and those with income that rises and falls. It lets businesses with fluctuating income to average their income and losses over the years and pay tax accordingly.

Continue Reading

Still Have Tax Questions? You’re Not Alone

Even after your 2024 federal return is submitted, a few nagging questions often remain. Below are quick answers to five of the most common questions we hear each spring.

05 06 25 2382861731 ITB 560x292

1. When Will My Refund Show Up?

Use the IRS’s “Where’s My Refund?” tracker at IRS.gov. Have these three details ready:

  • Social Security number,
  • Filing status, and
  • Exact refund amount.

Continue Reading

The “Wash Sale” Rule: Don’t Let Losses Circle the Drain

Stock, mutual fund and ETF prices have bounced around lately. If you make what turns out to be an ill-fated investment in a taxable brokerage firm account, the good news is that you may be able to harvest a tax-saving capital loss by selling the loser security. However, for federal income tax purposes, the wash sale rule could disallow your hoped-for tax loss.

04 29 25 2422479747 ITB 560x292

Rule Basics

A loss from selling stock or mutual fund shares is disallowed if, within the 61-day period beginning 30 days before the date of the loss sale and ending 30 days after that date, you buy substantially identical securities.

Continue Reading

Corporate Business Owners: Is Your Salary Reasonable in the Eyes of the IRS?

Determining “reasonable compensation” is a critical issue for owners of C corporations and S corporations. If the IRS believes an owner’s compensation is unreasonably high or low, it may disallow certain deductions or reclassify payments, potentially leading to penalties, back taxes and interest. But by proactively following certain steps, owners can help ensure their compensation is seen as reasonable and deductible.

05 05 25 2134317519 SBTB 560x292

Different Considerations for C and S Corporations

C corporation owners often take large salaries because they’re tax-deductible business expenses, which reduce the corporation’s taxable income. So, by paying themselves higher salaries, C corporation owners can lower corporate taxes. But if a salary is excessive compared to the work performed, the IRS may reclassify some of it as nondeductible dividends, resulting in higher taxes.

Continue Reading

Small Business Alert: Watch Out for the 100% Penalty

Some tax sins are much worse than others. An example is failing to pay over federal income and employment taxes that have been withheld from employees’ paychecks. In this situation, the IRS can assess the trust fund recovery penalty, also called the 100% penalty, against any responsible person.

04 07 25 2280936879 SBTB 560x292

It’s called the 100% penalty because the entire unpaid federal income and payroll tax amounts can be assessed personally as a penalty against a responsible person, or several responsible persons.

Continue Reading

Explore SEP and Simple Retirement Plans for Your Small Business

Suppose you’re thinking about setting up a retirement plan for yourself and your employees. However, you’re concerned about the financial commitment and administrative burdens involved. There are a couple of options to consider. Let’s take a look at a Simplified Employee Pension (SEP) and a Savings Incentive Match Plan for Employees (SIMPLE).

04 21 25 2278960983 SBTB 560x292

SEPs Offer Easy Implementation

SEPs are intended to be an attractive alternative to “qualified” retirement plans, particularly for small businesses. The appealing features include the relative ease of administration and the discretion that you, as the employer, are permitted in deciding whether or not to make annual contributions.

Continue Reading

Are You a Tax-Favored Real Estate Professional?

For federal income tax purposes, the general rule is that rental real estate losses are passive activity losses (PALs). An individual taxpayer can generally deduct PALs only to the extent of passive income from other sources, if any. For example, if you have positive taxable income from other rental properties, that generally counts as passive income. You can use PALs to offset passive income from other sources, which amounts to being able to currently deduct them.

03 31 25 1365628031 SBTB 560x292

Unfortunately, many rental property owners have little or no passive income in most years. Excess rental real estate PALs for the year (PALs that you cannot currently deduct because you don’t have enough passive income) are suspended and carried forward to future years. You can deduct suspended PALs when you finally have enough passive income or when you sell the properties that generated the PALs.

Continue Reading

Discover if You Qualify for “Head of Household” Tax Filing Status

When we prepare your tax return, we’ll check one of the following filing statuses: single, married filing jointly, married filing separately, head of household or qualifying widow(er). Only some people are eligible to file a return as a head of household. But if you’re one of them, it’s more favorable than filing as a single taxpayer.

04 01 25 1871115553 ITB 560x292

To illustrate, the 2025 standard deduction for a single taxpayer is $15,000. However, it’s $22,500 for a head of household taxpayer. To be eligible, you must maintain a household that, for more than half the year, is the principal home of a “qualifying child” or other relative of yours whom you can claim as a dependent.

Continue Reading

6 Essential Tips for Small Business Payroll Tax Compliance

Staying compliant with payroll tax laws is crucial for small businesses. Mistakes can lead to fines, strained employee relationships and even legal consequences. Below are six quick tips to help you stay on track.

03 24 25 2266030005 SBTB 560x292

1. Maintain Organized Records

Accurate recordkeeping is the backbone of payroll tax compliance. Track the hours worked, wages paid and all taxes withheld. Organizing your documentation makes it easier to verify that you’re withholding and remitting the correct amounts. If you ever face an IRS or state tax inquiry, having clear, detailed records will save time and reduce stress.

Continue Reading

Deduct a Loss From Making a Personal Loan to a Relative or Friend

Suppose your adult child or friend needs to borrow money. Maybe it’s to buy a first home or address a cash flow problem. You may want to help by making a personal loan. That’s a nice thought, but there are tax implications that you should understand and take into account.

03 25 25 1871115553 ITB 560x292

Get It in Writing

You want to be able to prove that you intended for the transaction to be a loan rather than an outright gift. That way, if the loan goes bad, you can claim a non-business bad debt deduction for the year the loan becomes worthless.

Continue Reading

Turning Stock Downturns Into Tax Advantages

Have you ever invested in a company only to see its stock value plummet? (This may become relevant in light of recent market volatility.) While such an investment might be something you’d rather forget, there’s a silver lining: you can claim a capital loss deduction on your tax return. Here are the rules when a stock you own is sold at a loss or is entirely worthless.

03 18 25 303958727 ITB 560x292

How Capital Losses Work

As capital assets, stocks produce capital gains or losses when they’re sold. Your capital gains and losses for the year must be netted against one another in a specific order based on whether they’re short-term (held one year or less) or long-term (held for more than one year).

Continue Reading

Exploring Business Entities: Is an S Corporation the Right Choice?

Are you starting a business with partners and deciding on the right entity? An S corporation might be the best choice for your new venture.

03 10 25 2474257333 SBTB 560x292

One Benefit of an S Corporation

One major advantage of an S corporation over a partnership is that shareholders aren’t personally liable for corporate debts. To ensure this protection, it’s crucial to:

  • Adequately finance the corporation,
  • Maintain the corporation as a separate entity, and
  • Follow state-required formalities (for example, by filing articles of incorporation, adopting bylaws, electing a board of directors and holding organizational meetings).

Continue Reading

The 2024 Gift Tax Return Deadline Is Coming up Soon

If you made significant gifts to your children, grandchildren or other heirs last year, it’s important to determine whether you’re required to file a 2024 gift tax return. And in some cases, even if it’s not required to file one, you may want to do so anyway.

03 04 25 1854813457 ITB 560x292

Requirements to File

The annual gift tax exclusion was $18,000 in 2024 (increased to $19,000 in 2025). Generally, you must file a gift tax return for 2024 if, during the tax year, you made gifts:

  • That exceeded the $18,000-per-recipient gift tax annual exclusion for 2024 (other than to your U.S. citizen spouse),
  • That you wish to split with your spouse to take advantage of your combined $36,000 annual exclusion for 2024,
  • That exceeded the $185,000 annual exclusion in 2024 for gifts to a noncitizen spouse,
  • To a Section 529 college savings plan and wish to accelerate up to five years’ worth of annual exclusions ($90,000) into 2024,
  • Of future interests — such as remainder interests in a trust — regardless of the amounts, or
  • Of jointly held or community property.

Continue Reading

Planning for the Future: 5 Business Succession Options and Their Tax Implications

When it’s time to consider your business’s future, succession planning can protect your legacy and successfully set up the next generation of leaders or owners. Whether you’re ready to retire, you wish to step back your involvement or you want a solid contingency plan should you unexpectedly be unable to run the business, exploring different succession strategies is key. Here are five options to consider, along with some of the tax implications.

03 17 25 2395539987 SBTB 560x292

1. Transfer Directly to Family With a Sale or Gifts

One of the most common approaches to succession is transferring ownership to a family member (or members). This can be done by gifting interests, selling interests or a combination. Parents often pass the business to children, but family succession plans can also involve siblings or other relatives.

Continue Reading

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 year exceeds your standard deduction allowance for the year. Otherwise, you must claim the standard deduction.

02 25 25 2455569903 ITB 560x292

Here’s how we’ll determine if you can itemize or not for 2024 when we prepare your return.

Continue Reading

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 answers to frequently asked questions about the tax break.

02 24 25 2581549775 SBTB 560x292

Who Qualifies?

In general, you qualify for home office deductions if part of your home is used “regularly and exclusively” as your principal place of business.

Continue Reading

Financial Relief for Families: The Benefits of the Child Tax Credit

The Child Tax Credit (CTC) has long been a valuable tax break for families with qualifying children. Whether you’re new to claiming the credit or you’ve benefited from it for years, it’s crucial to stay current on its rules and potential changes. As we approach the expiration of certain provisions within the Tax Cuts and Jobs Act (TCJA) at the end of 2025, here’s what you need to know about the CTC for 2024, 2025 and beyond.

02 11 25 572404738 ITB 560x292

Current State of the Credit

Under the TCJA, which took effect in 2018, the CTC was increased from its previous level of $1,000 to $2,000 per qualifying child. The TCJA also made more taxpayers eligible for the credit by raising the income threshold at which the credit begins to phase out.

Continue Reading

Do You Have an Excess Business Loss?

If an individual taxpayer has substantial business losses, unfavorable federal income tax rules can potentially come into play. Here’s what you need to know as you assess your 2024 tax situation.

02 18 25 317560448 SBTB 560x292

Disallowance Rule

The tax rules can get complicated if your business or rental activity throws off a tax loss — and many do during the early years. First, the passive activity loss (PAL) rules may apply if you aren’t very involved in the business or if it’s a rental activity. The PAL rules generally only allow you to deduct passive losses to the extent you have passive income from other sources. However, you can deduct passive losses that have been disallowed in previous years (called suspended PALs) when you sell the activity or property that produced the suspended losses.

Continue Reading

Questions About Taxes and Tips? Here Are Some Answers for Employers

Businesses in certain industries employ service workers who receive tips as a large part of their compensation. These businesses include restaurants, hotels and salons. Compliance with federal and state tax regulations is vital if your business has employees who receive tips.

02 10 25 224234020 SBTB 560x292

Are Tips Becoming Tax-Free?

During the campaign, President Trump promised to end taxes on tips. While the proposal created buzz among employees and some business owners, no legislation eliminating taxes on tips has been passed. For now, employers should continue to follow the existing IRS rules until the law changes — if it does. Unless legal changes are enacted, the status quo remains in effect.

Continue Reading

Many Business Tax Limits Have Increased in 2025

A variety of tax-related limits that affect businesses are indexed annually based on inflation. Many have increased for 2025, but with inflation cooling, the increases aren’t as great as they have been in the last few years. Here are some amounts that may affect you and your business.

02 03 25 2491675831 SBTB 560x292

2025 Deductions as Compared With 2024

  • Section 179 expensing:
    • Limit: $1.25 million (up from $1.22 million)
    • Phaseout: $3.13 million (up from $3.05 million)
    • Sec. 179 expensing limit for certain heavy vehicles: $31,300 (up from $30,500)
  • Standard mileage rate for business driving: 70 cents per mile (up from 67 cents)
  • Income-based phaseouts for certain limits on the Sec. 199A qualified business income deduction begin at:
    • Married filing jointly: $394,600 (up from $383,900)
    • Other filers: $197,300 (up from $191,950)

Continue Reading

Taming the Tax Tangle if You’re Retiring Soon

Retirement is often viewed as an opportunity to travel, spend time with family or simply enjoy the fruits of a long career. Yet the transition may bring a tangle of tax considerations. Planning carefully can help you minimize tax bills. Below are four steps to take if you’re approaching retirement, along with the tax implications.

02 04 25 2450519833 ITB 560x292

1. Consider Your Post-career Lifestyle

Begin by assessing what retirement might look like for you. For example, will you relocate to a different state or downsize by selling your home? Will you continue to work part-time?

Continue Reading

Looking Ahead to 2025 Tax Limits as You Prepare to File Your 2024 Return

Chances are, you’re more concerned about your 2024 tax return right now than you are about your 2025 tax situation. That’s understandable because your 2024 individual tax return is due to be filed by April 15 (unless you file for an extension).

01 28 25 2516304039 ITB 560x292

However, it’s a good time to familiarize yourself with tax amounts that may have changed for 2025 due to inflation. Not all tax figures are adjusted annually for inflation, and some amounts only change when Congress passes new laws.

Continue Reading

The Standard Business Mileage Rate Increased in 2025

The nationwide price of gas is slightly higher than it was a year ago and the 2025 optional standard mileage rate used to calculate the deductible cost of operating an automobile for business has also gone up. The IRS recently announced that the 2025 cents-per-mile rate for the business use of a car, van, pickup or panel truck is 70 cents. In 2024, the business cents-per-mile rate was 67 cents per mile. This rate applies to gasoline and diesel-powered vehicles as well as electric and hybrid-electric vehicles.

01 20 25 2560350263 SBTB 560x292

The process of calculating rates

The 3-cent increase from the 2024 rate goes along with the recent price of gas. On January 17, 2025, the national average price of a gallon of regular gas was $3.11, compared with $3.08 a year earlier, according to AAA Fuel Prices. However, the standard mileage rate is calculated based on all the costs involved in driving a vehicle — not just the price of gas.

Continue Reading

Early Bird Tips: Answering Your Tax Season Questions

The IRS announced it will start the 2025 filing season for individual income tax returns on January 27. That’s when the agency began accepting and processing 2024 tax year returns. Even if you typically don’t file until much closer to the mid-April deadline (or you file for an extension), you may want to file earlier this year. The reason is you can potentially protect yourself from tax identity theft.

01 21 25 2271328073 ITB 560x292

Here are some answers to questions taxpayers may have about filing.

Continue Reading

Do You Have Questions About Taking IRA Withdrawals? We’ve Got Answers

Once you reach age 73, tax law requires you to begin taking withdrawals — called Required Minimum Distributions (RMDs) — from your traditional IRA, SIMPLE IRA and SEP IRA. Since funds can’t stay in these accounts indefinitely, it’s important to understand the rules behind RMDs, which can be pretty complex. Below, we address some common questions to help you navigate this process.

01 14 25 2550594145 ITB 560x292

What Are the Tax Implications if I Want to Withdraw Money Before Retirement?

If you need to take money out of a traditional IRA before age 59½, distributions are taxable, and you may be subject to a 10% penalty tax. However, there are several ways that you can avoid the 10% penalty tax (but not the regular income tax). They include using the money to pay:

  • Qualified higher education expenses,
  • Up to $10,000 of expenses if you’re a first-time homebuyer,
  • Expenses after you become totally and permanently disabled,
  • Expenses of up to $5,000 per child for qualified birth or adoption expenses, and
  • Health insurance premiums while unemployed.

Continue Reading

Adoption Tax Credits: Easing the Financial Journey of Parenthood

There are two tax breaks that help eligible parents offset the expenses of adopting a child. In 2025, adoptive parents may be able to claim a credit against their federal tax for up to $17,280 of “qualified adoption expenses” for each child. This is up from $16,810 in 2024. A tax credit is a dollar-for-dollar reduction of tax.

12 17 24 2368991889 ITB 560x292

Also, adoptive parents may be able to exclude from an employee’s gross income up to $17,280 in 2025 ($16,810 in 2024) of qualified expenses paid by an employer under an adoption assistance program. Both the credit and the exclusion are phased out if the parents’ income exceeds certain limits detailed below.

Continue Reading

Operating as a C Corporation: Weigh the Benefits and Drawbacks

When deciding on the best structure for your business, one option to consider is a C corporation. This entity offers several advantages and disadvantages that may significantly affect your business operations and financial health. Here’s a detailed look at the pros and cons of operating as a C corporation.

12 23 24 613343306 SBTB 560x292

Tax Implications

A C corporation allows the business to be treated and taxed separately from you as the principal owner. The corporate tax rate is currently 21%, which is lower than the highest noncorporate tax rate of 37%.

Continue Reading

Savings Bonds and Taxes: What You Need to Know

When considering the advantages of U.S. Treasury savings bonds, you may appreciate their relative safety, simplicity and government backing. However, like all interest-bearing investments, savings bonds come with tax implications that are important to understand.

12 26 24 2109238766 ITB 560x292

Deferred Interest

Series EE Bonds dated May 2005 and after earn a fixed rate of interest. Bonds purchased between May 1997 and April 30, 2005, earn a variable market-based rate of return.

Continue Reading

Maximize Your 401(K) in 2025: Smart Strategies for a Secure Retirement

Saving for retirement is a crucial financial goal and a 401(k) plan is one of the most effective tools for achieving it. If your employer offers a 401(k) or Roth 401(k), contributing as much as possible to the plan in 2025 is a smart way to build a considerable nest egg.

12 31 24 149579720 ITB 560x292
If you’re not already contributing the maximum allowed, consider increasing your contribution in 2025. Because of tax-deferred compounding (tax-free in the case of Roth accounts), boosting contributions can have a significant impact on the amount of money you’ll have in retirement.

Continue Reading

Saving for College: Tax Breaks and Strategies Your Family Should Know

As higher education costs continue to rise, you may be concerned about how to save and pay for college. Fortunately, several tools and strategies offered in the U.S. tax code may help ease the financial burden. Below is an overview of some of the most beneficial tax breaks and planning options for funding your child’s or grandchild’s education.

01 07 25 2108824724 ITB 560x292

Qualified Tuition Programs or 529 Plans

A 529 plan allows you to buy tuition credits or contribute to an account set up to meet your child’s future higher education expenses. State governments or private institutions establish 529 plans.

Continue Reading

More Articles ...