View Padgett President Roger Harris' congressional testimony on the impact of the Corporate Transparency Act and the BOI reporting requirements here.
Your 2024 guide to business meal and entertainment deductions
December 10th, 2024 | Uncategorized
The tax rules surrounding business-related meal and entertainment expenses have evolved over recent years, leaving many business owners unsure about what can be deducted. Here’s a simplified guide to help you navigate these rules for 2024. What’s Allowed Entertainment Costs The Tax Cuts and Jobs Act eliminated deductions for most entertainment expenses. For example, if you take a client out for a round of golf or a football game, those costs are not deductible. Food and Beverage Costs You can still deduct 50% of the cost of food and beverages when they’re related to your business or consumed during business-related entertainment. Food and Beverage Costs: What’s Included? Food and beverage expenses cover anything from meals to snacks, including sales tax, […]
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Self-Employment Tax: What You Need to Know
Running your own business is exciting, but it also comes with responsibilities—like managing your self-employment (SE) taxes. If you’re feeling overwhelmed by the numbers, here’s a quick breakdown of how SE taxes work and tips to manage them. What Is the Self-Employment Tax? SE tax covers Social Security and Medicare contributions for self-employed individuals, replacing the payroll taxes typically withheld from employees’ paychecks. Rate: It’s 15.3% of your net self-employment income. 12.4% goes to Social Security (up to a limit). 2.9% goes to Medicare (with no limit). 2024 Threshold: The 15.3% rate applies to your first $168,600 of net income. Anything above that only gets the 2.9% Medicare rate. How Do I Calculate My SE Tax? Here’s a quick formula: […]
Read More >>Business owners: Are you classifying cash flows correctly?
Accurate financial statements are essential for understanding your business’s financial health. But as your business grows, financial transactions can become more complex, and preparing these statements properly isn’t always straightforward. One area that often trips up business owners is the statement of cash flows. This report shows where your cash is coming from and where it’s going. Simple, right? Not always! Ensuring cash flows are classified correctly can be a challenge, especially when following U.S. Generally Accepted Accounting Principles (GAAP). Here’s a breakdown to help you make sense of it all: What Are the Three Types of Cash Flows? 1. Operating Activities This section shows the cash your business generates or uses during its normal operations. Think of it as […]
Read More >>Balancing Client Service with Risk Management: Tax Professionals Face New Challenges in BOI Reporting
FinCEN claims filling out the new Beneficial Ownership Information (BOI) reporting firm “only takes 10-15 minutes.” However, those minutes could translate into years of liability for tax practitioners. As the January 1, 2025, deadline looms for existing businesses to submit their initial BOI reports, practitioners grapple with a new layer of complexity. They must balance client service with increasing professional risks and compliance responsibilities. In a recent Federal Tax Updates podcast, hosts Roger Harris, EA and President at Padgett, and Annie Schwab, CPA and Franchisee Operations Manager at Padgett, discussed these complexities. Once a tax professional files as a “company applicant,” that designation—and its liabilities—persist indefinitely. Beneficial ownership changes must be reported within 30 days, which creates an ongoing compliance […]
Read More >>Featured Articles
Understanding IRAs: your retirement savings guide
With the recent passing of the SECURE 2.0 Act of 2022, you may have questions about the different types of Individual Retirement Accounts (IRAs) available. How do you choose what retirement plan is right for you? IRAs are a powerful tool for retirement savings. They are savings plans that come with tax advantages to help taxpayers build a retirement fund. Each type of IRA has its own set of regulations and deadlines. Here’s a quick overview of the most common kinds: Traditional IRA: Contributions to a traditional IRA may be tax deductible and earnings grow tax-deferred until distribution, which means you won’t pay taxes on your traditional IRA funds until you make a withdrawal. The contribution limit for 2022 is […]
Breaking Down the SECURE Act 2.0
Roger and Annie discuss the changes in the SECURE 2.0 Act of 2022 and how this impacts small business owners with regards to offering retirement plans to their employees. They also talk about recent changes in IRS regulations that could prove …
Latest Tax, Accounting & Financial Tips
Self-Employment Tax: What You Need to Know
Running your own business is exciting, but it also comes with responsibilities—like managing your self-employment (SE) taxes. If you’re feeling overwhelmed by the numbers, here’s a quick breakdown of how SE taxes work and tips to manage them. What Is the Self-Employment Tax? SE tax covers Social Security and Medicare contributions for self-employed individuals, replacing the payroll taxes typically withheld from employees’ paychecks. Rate: It’s 15.3% of your net self-employment income. 12.4% goes to Social Security (up to a limit). 2.9% goes to Medicare (with no limit). 2024 Threshold: The 15.3% rate applies to your first $168,600 of net income. Anything above that only gets the 2.9% Medicare rate. How Do I Calculate My SE Tax? Here’s a quick formula: […]
Business owners: Are you classifying cash flows correctly?
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Time for year-end tax planning for your small business
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