Business Tax Articles

Businesses offering employee health coverage may be required to comply with federal reporting obligations under the Affordable Care Act (ACA). Companies with 50 or more full-time employees must file Forms 1094-C and 1095-C to report health coverage details and determine compliance with employer mandate provisions. Employers with fewer than 50 full-time employees are generally exempt from these requirements.

As the fourth quarter of 2024 approaches, business owners must be aware of key tax deadlines, including filing returns, making estimated tax payments, and contributing to retirement plans. Missing these important dates can result in penalties or interest charges. This article highlights the most critical deadlines and filing requirements to help ensure businesses stay compliant.

A well-drafted partnership or LLC operating agreement should address key tax considerations, such as guaranteed payments, partner liabilities, and payments to retired partners. These provisions ensure tax compliance and help manage potential issues like partner exits or ownership transfers. Properly addressing these matters minimizes tax liabilities and protects the business.

As the year-end approaches, small businesses should focus on tax planning strategies like deferring income, accelerating deductions, and maximizing the QBI deduction to reduce their tax liabilities. It's also essential to stay updated on estimated tax payments, Section 179 expensing options, and potential changes to tax laws that could impact future filings. Consulting with a tax professional can help tailor these strategies to your business's needs.

An LLC offers business owners the liability protection of a corporation while allowing for the tax benefits of a partnership. Members can avoid personal liability for business debts and enjoy pass-through taxation, with the flexibility to allocate tax benefits and fewer restrictions compared to an S corporation. For small to mid-sized businesses, this structure can provide both legal and financial advantages.

Partnerships and multi-member LLCs benefit from pass-through taxation, but they must adhere to complex federal tax rules. Properly drafted partnership and LLC operating agreements are essential for addressing key tax-related issues, including special tax allocations and distributions for covering tax liabilities. Seeking professional guidance can ensure compliance and optimize tax benefits.

The upcoming presidential and congressional elections could significantly alter the tax landscape for U.S. businesses, as many provisions of the Tax Cuts and Jobs Act (TCJA) are set to expire at the end of 2025. Potential outcomes range from the complete expiration of these provisions to their extension or replacement with new tax laws. The future impact on your business will depend on the election results and subsequent legislative changes.

Drop shipments occur when a retailer takes an order and directs a wholesaler to ship the product directly to the customer. However, depending on the facts and circumstances, such as location and nexus status for all parties involved, how property is delivered, and how the title to property passes, the responsibility and requirement to charge and collect sales tax can change.

When launching a manufacturing company, it's essential to consider the tax implications of start-up costs. Eligible expenses can be deducted or amortized over time, with potential tax benefits depending on the total amount. Understanding these tax treatments helps ensure a strong financial foundation for your new business.

Website costs for businesses are subject to general tax rules, with specific considerations for hardware and software. Hardware costs can be deducted with bonus depreciation or under Section 179, with limits and phaseouts for each. Purchased software and license fees are generally deductible as ordinary business expenses. Payments to third-party developers are also deductible. Start-up website costs can be partially deducted or amortized, depending on the total amount. For precise guidance on handling these expenses, consult with a tax professional.