The default for qualifying sales is to report gain proportionally as payments are received under IRC §453. You can elect out and recognize all gain in the year of sale by reporting the sale on the original timely return (including extensions), e.g., on Form 4797/Schedule D, instead of Form 6252.
Only exchanges of real property held for productive use in a trade or business or for investment qualify for nonrecognition under section 1031. Personal property and most intangibles no longer qualify; exceptions are narrow (e.g., certain mutual ditch/reservoir/irrigation shares treated as real property under state law).
The individual AMT is an extra 3-step computation: determine alternative minimum taxable income (AMTI) by adjusting regular taxable income for AMT preference items, subtract the AMT exemption, apply AMT rates (26%/28%) to get tentative minimum tax, and compare it to regular tax
Individuals owe a 3.8% tax on the lesser of: (a) their net investment income (NII), or (b) the excess of modified adjusted gross income (MAGI) over the statutory threshold ($200,000 single, $250,000 MFJ, $125,000 MFS; not indexed).
PPP loan forgiveness is excluded from gross income. Congress codified that no amount is included in income by reason of forgiveness of a PPP First Draw, Second Draw, or §1109 PPP loan. Further, no deduction is denied, no tax attribute is reduced, and no basis increase is denied because of this exclusion.
Section 179 expensing limits increased starting with tax years beginning after 12/31/2024: up to $2,500,000 immediate expensing, with phase-out starting at $4,000,000 of Section 179 property placed in service, and indexed for inflation thereafter.
Concise, practitioner-focused roundup of notable state tax changes recently enacted or taking effect, plus how to monitor and plan for continuing variation across states.
Regular credit: 20% of current-year QREs over the base amount. Optimizes when your fixed‑base percentage is low and current QREs are high relative to gross receipts.
The credit equals your base 45Y amount times the “phase‑out percentage” if construction begins in a phase‑out year. IRS final rules confirm the computation and that 45Y’s “applicable year” determination also governs 48E phase‑out. 1
Depreciation is allowed for property used in farming or held for the production of income under IRC §167; most post-1986 tangible farm property uses MACRS under §168 with prescribed methods, recovery periods, and conventions.
To be treated as a real estate professional for passive activity loss rules, you must satisfy both annual tests below with respect to real property trades or businesses in which you materially participate:
Most organizations exempt under IRC §501(a) must file an annual information return under §6033 on a Form 990-series return, reporting income, receipts, disbursements, and other required information.
Classify each worker under the common-law control test. If you have the right to direct what will be done and how, the worker is an employee (this applies even to remote workers).
Maximize QBI, but remember the deduction is the lesser of 20% of QBI (plus 20% of qualified REIT/PTP income) or 20% of taxable income reduced by net capital gain. Managing taxable income and net capital gain often binds the deduction before business limits do. 1
Below is a practical framework to compute each regime, highlight interactions, and reflect changes made by the One Big Beautiful Bill Act (OBBBA). Where OBBBA adjusted parameters effective for tax years beginning after 12/31/2025, I note those new amounts.
Many states let partnerships and S corporations elect to pay state income tax at the entity level (PTE or PTET). The entity-level tax is generally deductible by the business for federal income tax purposes, bypassing the individual SALT $10,000 cap on Schedule A
A partnership owes a penalty if it files Form 1065 late (after the due date, including extensions) or files an incomplete return lacking required information, unless it establishes reasonable cause. 1
Calendar-year filers (tax year ending Dec 31, 2024): due March 17, 2025 (March 15 falls on a Saturday) Fiscal-year filers: due the 15th day of the 3rd month after year-end
Changing a business’s federal tax classification or legal form can trigger deemed transactions for income tax, employment tax, and information reporting.
The federal basic exclusion amount for estate and gift tax is increased to $15,000,000 per person (indexed for inflation) beginning for decedents dying and gifts made after December 31, 2025.
U.S. citizens and resident aliens are taxed on worldwide income, even if they live and work abroad. Report all foreign-source earned and unearned income on a U.S. return each year. Nonresident aliens generally owe U.S.
States generally tax wage income where the work is performed; the resident state typically taxes all income but offers a credit for taxes paid to other states to mitigate double taxation. Convenience-of-the-employer rules and reciprocity agreements can change the result.
TET lets partnerships and S corporations pay state income tax at the entity level so owners can receive a federal deduction not limited by the individual SALT cap. Nearly all high-tax states, and many others, now offer PTET.
The IRS treats cryptocurrency and other blockchain-based tokens as “digital assets,” and digital assets are treated as property. General property tax rules apply to purchases, sales, exchanges, and dispositions.
Here’s what HIVE AI had to say about "Client confidentiality and disclosure requirements": Client Confidentiality and Disclosure Requirements Overview of Confidentiality Obligations Client confidentiality represents one of the fundamental pillars of professional tax...
The electronic filing mandate for tax preparers represents a comprehensive regulatory framework designed to modernize tax administration and improve processing efficiency.
By law, you must meet four specific due diligence requirements if you are paid to prepare a tax return or claim for refund claiming any of these tax benefits.
Tax return preparer penalties are comprehensive civil sanctions designed to ensure professional competence and compliance in tax preparation services.
Practice before the Internal Revenue Service encompasses all matters connected with presentation to the Internal Revenue Service or any of its personnel relating to a taxpayer’s rights, privileges, or liabilities
Section 330 of title 31 of the United States Code authorizes the Secretary of the Treasury to regulate the practice of representatives of persons before the Treasury Department (Treasury).
The One Big Beautiful Bill Act (OBBBA) introduces a revolutionary new savings vehicle called “Trump Accounts” designed specifically to help children build long-term wealth from birth.
Here’s what HIVE AI had to say about "Are there any retroactive provisions or opportunities for amended returns under the One Big Beautiful Bill?": Retroactive Provisions and Amended Return Opportunities Under the One Big Beautiful Bill The One Big Beautiful Bill Act...
The One Big Beautiful Bill Act (OBBBA) contains a complex array of effective dates and transition rules that reflect the comprehensive nature of this landmark legislation.
The One Big Beautiful Bill Act (OBBBA) introduces significant modifications to the Base Erosion and Anti-Abuse Tax (BEAT) and other international minimum tax provisions, fundamentally altering the landscape of international tax compliance for multinational corporations.
The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, introduces significant changes to international tax policy that substantially affect foreign investors and cross-border tax rules.
The One Big Beautiful Bill Act (OBBBA) introduces several significant changes to reporting requirements and compliance deadlines that directly impact multinational businesses operating in the United States.
The One Big Beautiful Bill Act (OBBBA) introduces significant modifications to pass-through entity deductions and limitations, particularly affecting specified service trades or businesses (SSTBs).
The One Big Beautiful Bill Act (OBBBA) introduces transformative changes to the Qualified Small Business Stock (QSBS) gain exclusion under Section 1202, representing one of the most significant enhancements to this provision since its original enactment.
The One Big Beautiful Bill Act (OBBBA) introduces significant modifications to the excess business loss limitation rules under Section 461(l), fundamentally altering the landscape for non-corporate taxpayers who experience business losses.
The One Big Beautiful Bill Act (OBBBA) introduces transformative changes to the treatment of domestic research and development expenses, representing one of the most significant business tax provisions in the legislation.
The One Big Beautiful Bill Act (OBBBA) introduces substantial increases to the Section 179 expensing limits, representing one of the most significant enhancements to this business tax provision in recent years.
The One Big Beautiful Bill Act (OBBBA) introduces several significant modifications to the business interest expense deduction rules under Section 163(j), fundamentally altering how businesses calculate their allowable interest deductions and coordinate with other tax provisions.
The One Big Beautiful Bill Act (OBBBA) has indeed permanently reinstated 100% bonus depreciation, representing one of the most significant business tax provisions in the legislation.
The Qualified Business Income (QBI) deduction under Section 199A has undergone significant modifications through the One Big Beautiful Bill Act (OBBBA), which was signed into law on July 4, 2025.
The One Big Beautiful Bill Act (OBBBA) represents a dramatic shift in federal electric vehicle policy, implementing comprehensive terminations and restrictions on EV-related tax credits that fundamentally alter the landscape for electric vehicle adoption and charging infrastructure development.
The One Big Beautiful Bill Act (OBBBA) represents a significant policy shift that includes several new incentives and enhancements for fossil fuel production and manufacturing activities.
The One Big Beautiful Bill Act (OBBBA), passed in July 2025, represents a significant shift in federal energy policy, implementing substantial changes to clean energy tax incentives.
The One Big Beautiful Bill does not appear to contain specific provisions that directly modify the existing pass-through entity tax workaround for State and Local Tax (SALT) deductions.
The increased State and Local Tax (SALT) deduction cap under the One Big Beautiful Bill represents a temporary enhancement to the current tax limitation structure.
The One Big Beautiful Bill introduces significant changes to the State and Local Tax (SALT) deduction that represent a substantial departure from the current $10,000 limitation established by the Tax Cuts and Jobs Act (TCJA).
Yes, equipment financed in 2024 is still eligible for depreciation, including bonus depreciation and Section 179 expensing. The method of financing does not affect the depreciation eligibility of business equipment, as long as the equipment meets the fundamental requirements for depreciation.
Depreciating real estate used in your business involves specific rules and methods under the Modified Accelerated Cost Recovery System (MACRS). The treatment depends on the type of real property, when it was placed in service, and how it’s used in your business operations.
The tax treatment of software subscriptions and licenses depends on several factors, including the type of software, how it’s acquired, and how it’s used in your business. The tax code provides different pathways for expensing or capitalizing these costs, each with specific requirements and benefits.
Bonus depreciation, also known as the additional first year depreciation deduction under Section 168(k), follows a specific phase-down schedule that began after 2023. Understanding this phase-down is crucial for tax planning as it significantly impacts the immediate tax benefits available for qualifying business property investments.
Section 179 expensing allows taxpayers to immediately deduct the cost of qualifying business property rather than depreciating it over time. For 2024, there are specific requirements and limitations that determine what qualifies for this valuable tax benefit.
There are several significant clean energy tax credits available for business vehicles and property in 2024 and beyond. These credits are designed to incentivize businesses to adopt cleaner technologies and reduce their environmental impact.
Yes, you may be eligible to claim the Work Opportunity Tax Credit (WOTC), but eligibility depends on several specific requirements related to your business type, the employees you hire, and proper certification procedures.
Yes, there are several tax credits available for employers who offer health insurance to their employees. The primary credit is the Small Business Health Care Tax Credit, along with various other considerations and requirements under the Affordable Care Act.
No, you cannot claim the Employee Retention Credit (ERC) in 2025. The Employee Retention Credit (ERC) is only available for eligible employers that paid qualified wages to employees between March 13, 2020, and December 31, 2021
The Research and Development Credit (IRC Section 41) has been made permanent and offers significant benefits for qualifying small businesses.
Yes, you can pay your children or spouse through the business, but there are specific rules and requirements that must be followed to ensure the payments are legitimate business expenses and comply with employment tax obligations.
Reporting owner’s compensation depends significantly on the business structure and the owner’s role within the organization. The treatment varies dramatically between different entity types, and proper reporting is essential for both tax compliance and avoiding penalties.
Handling state unemployment and payroll tax filings requires understanding both the federal framework and the specific requirements of each state where you have employees. This process involves multiple components including registration, ongoing filings, tax calculations, and compliance with varying state-specific rules.
Payroll taxes are indeed deductible as business expenses, but the specific treatment depends on which type of payroll taxes you’re referring to and your role as either an employer or self-employed individual.
The requirement to issue Form W-2 to employees is governed by specific statutory and regulatory provisions that establish both the circumstances requiring issuance and the timing for providing these critical tax documents.
When issuing forms to independent contractors, you primarily use Form 1099-NEC (Nonemployee Compensation), which replaced the use of Form 1099-MISC for reporting nonemployee compensation starting in tax year 2020.
The distinction between an employee and an independent contractor is one of the most fundamental and complex issues in tax law, with significant implications for both the worker and the entity paying for services. This classification affects tax withholding obligations, employment tax responsibilities, benefit eligibility, and various deduction opportunities.
Bonus depreciation for vehicles in 2024 is 60% of the adjusted basis for most qualified property placed in service during the year T.D. 9874 . This represents a continuation of the phaseout schedule established by the Tax Cuts and Jobs Act.
Deduct only the business-use percentage of expenses, based on accurate mileage tracking.
Yes, Section 179 is applicable to SUVs and trucks, but with important limitations and restrictions that you must understand to properly claim these deductions.
Yes, lease payments are deductible if the vehicle is used for business and records are maintained.
Track each trip with date, miles, destination, and business purpose. Keep accurate, timely records.
Choose the method that offers a higher deduction. You must stick with one method per year.
Yes, you can deduct certain dues, subscriptions, and memberships as business expenses, but there are important limitations and restrictions that you must understand to properly claim these deductions while maintaining compliance with federal tax law.
You can deduct the business-use percentage of your phone and internet bills with proper documentation.
Yes, fees for legal, accounting, and other professional services are deductible if they’re business-related.
Office equipment and furniture can be depreciated or expensed under Section 179 if used for business.
Yes, business gifts are deductible up to $25 per recipient per year, if properly documented and business-related.
Deduct up to $5,000 in startup and organizational costs, with the rest amortized over 15 years under IRS rules.
Business travel is deductible if properly documented. Meals are 50% deductible, with strict IRS substantiation required.
Business meals are 50% deductible if conditions are met. Entertainment expenses are generally not allowed under current IRS rules.
Claim deductions like operating costs, travel, home office, and more if they’re ordinary and necessary for your business.
Track personal and business expenses by keeping separate bank accounts, using dedicated business credit cards, documenting each expense’s purpose, and allocating mixed-use costs proportionally. Use accounting software to automate categorization and maintain compliance.
Record all cash transactions daily, including date, amount, purpose, and customer info. Keep receipts, use a cash log, reconcile regularly, and report large payments over $10,000 using Form 8300.
Organize business receipts using digital tools like QuickBooks or physical filing by year and category. Keep records for at least 3 years, separate personal/business finances, and back up all data for audit readiness.
Organize business receipts using digital tools like QuickBooks, categorize by expense type, and keep records for at least 3 years. Separate personal and business finances for clarity and audit readiness.
Keep business tax records for at least 3 years from filing or due date. Employment taxes: 4 years. Property records: as long as owned, plus 3 years. Some cases require 6+ years or indefinite retention.
Keep detailed records for all business deductions: receipts, invoices, mileage logs, and documentation showing amount, date, purpose, and business relationship. Retain for at least 3 years.
Report cryptocurrency received as payment as ordinary income at its fair market value in USD. Use Schedule C or W-2 depending on employment status. Track gains/losses when sold.
Foreign business income is generally taxable in the U.S. U.S. citizens report worldwide income; foreign persons pay tax only on U.S.-source or effectively connected income.
Report Form 1099-K income on Schedule C as part of your gross receipts. Reconcile with records, deduct expenses and refunds, and pay tax on net profit. Keep documentation to support your return.
Income from Etsy, Amazon, PayPal, or Stripe is taxable. Report all earnings on Schedule C, track expenses, and pay self-employment tax. Even without a 1099-K, you must report income.
Advance payments are generally taxable in the year received. Deposits aren’t taxed until earned or conditions are met. Accrual basis taxpayers may defer some payments under IRS rules.
Most individuals use the cash method, reporting income when received. Accrual basis reports income when earned. Choose based on IRS rules and your business needs.
Learn how to report business income and expenses on your personal tax return using Schedule C. Understand deductions, record-keeping, and common mistakes to avoid.
Learn about penalties for late filing or payment for businesses, including failure-to-file fees, late payment charges, and exceptions for reasonable cause.
Yes, you can file an extension for your business tax return using Form 7004. Learn how to request an extension, payment requirements, and deadlines by business type.
Learn the tax forms required for LLCs, S Corps, C Corps, and Sole Proprietors. Ensure compliance with federal filing requirements for your business entity.
Determine your business entity’s filing status and tax obligations. Learn about default classifications, Form 8832 elections, and filing requirements for LLCs, corporations, and more.
Generally, the tax code requires taxpayers to pay federal income taxes as they earn income. To the extent these taxes are not withheld, a taxpayer must pay estimated income tax on a quarterly basis.