Johnston, Martin & Montgomery LLP

There aren’t too many things businesses can do after a year ends to reduce tax liability for that year. But you might be able to pay employee bonuses for 2018 in 2019 and still deduct them on your 2018 tax return. To be eligible for this favorable tax treatment, you must be an accrual-basis taxpayer and the bonus liability must have been fixed by the end of the tax year, which requires passing the all-events test and may necessitate a bonus pool arrangement. If you’re a calendar-year company, you must pay the bonuses by March 15. Contact us to learn more. Read full article here: http://bit.ly/2BqkonF

Retirement plan contribution limits are indexed for inflation, and most have increased for 2019. So you may have opportunities to increase your retirement savings. Limits for 401(k)s, SIMPLEs and IRAs increase by $500, to $19,000, $13,000 and $6,000, respectively. Catch-up contributions (for taxpayers age 50 or older) remain unchanged, however. They’re $6,000, $3,000 and $1,000, respectively. Additional factors may affect how much you’re allowed to contribute. For more on how to make the most of tax-advantaged retirement-saving opportunities in 2019, contact us. Read full article here: http://bit.ly/2BtM9f4

The dawning of 2019 means the 2018 income tax filing season will soon be upon us. After year end, it’s generally too late to take action to reduce 2018 taxes. Business owners may, therefore, want to shift their focus to assessing whether they’ll likely owe taxes or get a refund when they file their returns this spring, so they can plan accordingly. With the biggest tax law changes in decades (under the TCJA) generally going into effect beginning in 2018, most businesses and their owners will be significantly impacted. Contact us for a refresher on the changes. Read full article here: http://bit.ly/2TGhEcL

The cash method of accounting offers greater tax-planning flexibility, allowing some businesses to defer taxable income. Under the TCJA, if your business’s average gross receipts for the previous three tax years are $25 million or less, you generally will now be eligible for the cash method for federal tax purposes, regardless of how your business is structured, your industry or whether you have inventories. Newly eligible businesses should determine whether the cash method would be advantageous and, if so, consider switching methods. Contact us to learn more. You can read full article here: http://bit.ly/2APpgCh

The TCJA didn’t change the research credit, but it has an impact on the credit. Previously, corporations subject to alternative minimum tax (AMT) couldn’t offset the research credit against AMT liability, which erased the credit’s current benefits. By eliminating corporate AMT, the TCJA removed this obstacle. Pass-through businesses can still claim the credit against AMT if their average gross receipts are $50 million or less. And qualifying start-ups without taxable income can still claim the credit against up to $250,000 in payroll taxes. Contact us for details and read full article here: http://bit.ly/2T0SjKg

May new year bring joy, happiness and prosperity to your doors!

It’s a great time of year for businesses to show their appreciation for employees and customers by giving them gifts or hosting holiday parties. Gifts to customers are generally deductible up to $25 per recipient per year. De minimis, noncash gifts to employees aren’t included in their taxable income yet are still deductible by you. Holiday parties are fully deductible provided they’re primarily for the benefit of non-highly-compensated employees and their families. If customers attend, parties may be partially deductible. You can read full article here: http://bit.ly/2ERsj0w Questions? Contact us.

Happy Holidays to our clients, friends and family!

The TCJA’s new deduction for owners of pass-through entities can be 20% of qualified business income. But a wage-based limit applies if an owner’s taxable income exceeds certain levels. Find out how the limit works: http://bit.ly/2rustlG

In late June, the U.S. Supreme Court expanded the ability of states to collect sales tax from out-of-state online retailers. If your business makes online sales to out-of-state customers, here’s what you need to know: http://bit.ly/2rtQv0j

The TCJA has narrowed the scope of who can claim the home office deduction. But certain business owners and self-employed taxpayers may still be eligible. You can read full article on our website: http://bit.ly/2PvogYo