That’s the admonition to those with or considering a sideline activity if you want good tax results — “Your sideline business better be for profit.” How you choose to spend your time and effort is one thing, but the tax law makes having a profit motive vital these days. Here’s why. Overview of hobby activity rules If you’re in business, you report on your tax return your income and losses (expenses in excess of revenue). But if the activity is merely a hobby (i.e., you engage in an activity that doesn’t have a reasonable expectation of making a profit), then […]

The “pink tax” isn’t a tax levied by the government. It’s the markup of goods and services charged to women versus men for comparable goods and services. On July 26, 2018, Burger King launched a campaign to highlight the pink tax by charging more for a pink box of fries than a regular box with the same amount of fries. This should prompt you to think about whether you’re using gender-neutral pricing. Pink tax rates How big is the problem? According to a study of gender pricing in New York City, women’s products on average cost 7% more than similar products […]

Qualified retirement plans aren’t just for large corporations. There are a number of compelling reasons for small businesses to consider adopting a plan now or revising your current plan. 1. Reduce current taxes I’m sure you know that as an employer you can deduct contributions you make for the benefit of employees (up to annual limits). If you are self-employed, contributions for employees are a deductible business expense, while those for yourself are deducted from gross income on your personal return. And you may also be entitled to a tax credit of 50% of your administrative costs (up to a […]

Certain women from the past have had a tremendous impact on our lives. Here are 5 outstanding women who were born in the month of August and I’d like to give a salute to them. Lucille Ball (b. August 6, 1911) We remember her largely for her role in I Love Lucy (a show that ran from 1951 to 1957 but is still being shown regularly today). But her real claim to claim is that she was the first woman to head a major Hollywood production company, Desilu Productions (she was president and CEO). It produced not only her show […]

If your business nets $50,000 and you qualify for the new 20% business income deduction for owners of pass-through entities, you’ll save $10,000 in federal income taxes. Should you opt to plough this back into your business, here are 10 smart things you can do to improve your business, solidify your workforce, and do good for your community. And all of these suggestions are tax deductible, so you’ll be reaping additional tax savings. 1. Give “spot bonuses” These are payments you make now, rather than at the end of the year or on an employee’s work anniversary. Spot bonuses may […]

According to the SBA, about 50% of all businesses in the U.S. are home-based. More specifically, 60.1% of all businesses without paid employees are home-based, as are 23.3% of small employer companies. Despite the prevalence of home-based businesses, many owners fail to claim a home office deduction because they fear it’s an audit red flag. The truth is that there are no statistics supporting this belief, and if you qualify for the deduction you should take it. Here are some things you can and cannot do when it comes to the home office deduction. You can’t mix business with pleasure […]