Category: Private Business

In today’s tight labor market, small businesses may need to think outside the box to find employees to fill open positions. In some cases, you may have to sweeten the deal with higher salaries or extra benefits. But you may be able to offset higher compensation costs with a lucrative federal tax credit for hiring members of certain “targeted” groups. Here’s what employers should know to take advantage of the Work Opportunity Tax Credit (WOTC). Targeted Groups The WOTC can… Read more ›

Sooner or later, one of your law firm partners will probably sell his or her partnership interest to an incoming partner. At that point, there will be important tax consequences for the exiting partner. This article explains the applicable federal income tax rules in a nutshell. The same rules apply if your firm operates as an LLC that is treated as a partnership for federal tax purposes. The General Rule When law firm partners or LLC members sell out, they… Read more ›

Once you get some legal experience under your belt, you may think about opening your own firm. Setting up and running a law practice can be a daunting prospect, but taking certain steps will help to ensure that your firm grows and remains profitable. Here are some guidelines to help accomplish the task successfully: Develop a strategy You really can’t proceed before you target a specific client base or market and decide how you plan to compete. This means knowing… Read more ›

To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your field of business. A necessary expense is one that’s helpful and appropriate for your business. The IRS sometimes challenges deductions claimed for certain types of business expenses. In doing so, an examiner might claim that payments made by a corporation to a shareholder for personal items or that are above or below fair market value constitute… Read more ›

Partners in professional service firms must sometimes pay for certain firm-related business expenses out of their own pockets. For instance, a law firm partner may have to personally absorb the costs of entertaining prospective clients who are not on a designated firm-wide list of potential clients for which the firm will reimburse the costs of wining and dining. Also, a partner may incur personal auto expenses to drive to and from client meetings and to and from other locations where… Read more ›

The Consolidated Appropriations Act of 2021 (CAA) was signed into law in late December. The sprawling legislation contains billions of dollars in additional stimulus funding in response to the COVID-19 pandemic, as well as numerous unrelated provisions. Let’s take a closer look at the provisions that are most likely to affect your company’s bottom line. Paycheck Protection Program The CAA includes another $284 billion in funding for forgivable loans through the Paycheck Protection Program (PPP), for both first-time and so… Read more ›

The Families First Coronavirus Relief Act (FFCRA) made substantial tax subsidies available to eligible employers, so they can provide paid sick leave and Family and Medical Leave Act (FMLA) leave for certain employees impacted by the COVID-19 pandemic. Eligible employers are those with fewer than 500 employees. An employer that has fewer than 50 employees may be able to make the case to the Department of Labor (DOL) that complying with rules would jeopardize the viability of his or her… Read more ›

In an effort to alleviate stress for private companies during the unprecedented challenges of the COVID-19 pandemic, the Financial Accounting Standards Board (FASB) has voted to delay the effective dates of the revenue recognition and lease accounting standards. FASB board members are expected to vote in favor of an Accounting Standards Update (ASU) reflecting this change on a final, written ballot. Nonpublic entities who have yet to issue financial statements will have a one-year extension for revenue recognition. The effective… Read more ›

In response to increasing public pressure, the Small Business Administration announced on June 19 that it would release the names of Paycheck Protection Program (PPP) loan recipients awarded at least $150,000 in funds. No timeline for the disclosure has been announced, but the SBA said it would “disclose the business names, addresses, NAICS codes, zip codes, business type, demographic data, not-for-profit information, jobs supported, and loan amount ranges as follows:” $150,000-$350,000 $350,000-$1 million $1-2 million $2-5 million $5-10 million Participants… Read more ›

Thanks to CBM Supervisor Tom Hudson for developing the following article. On April 14, the Small Business Administration (SBA) released additional guidance that provided more information about the implementation of the Paycheck Protection Program (PPP) for self-employed taxpayers. Previously, it was not explicitly stated that taxpayers who file a Schedule C were included in the program although many interpretations of the SBA’s language indicated that they were eligible. The SBA did confirm through the most recent guidance that a taxpayer… Read more ›