business - Linkenheimer LLP CPAs & Advisors

Traveling for Business Again? What Can You Deduct?

As we continue to come out of the COVID-19 pandemic, you may be traveling again for business. Under tax law, there are a number of rules for deducting the cost of your out-of-town business travel within the United States. These rules apply if the business conducted out of town reasonably requires an overnight stay.

Note that under the Tax Cuts and Jobs Act, employees can’t deduct their unreimbursed travel expenses through 2025 on their own tax returns. That’s because unreimbursed employee business expenses are “miscellaneous itemized deductions” that aren’t deductible through 2025.

However, self-employed individuals can continue to deduct business expenses, including away-from-home travel expenses.

Here are some of the rules that come into play.

Transportation and meals

The actual costs of travel (for example, plane fare and cabs to the airport) are deductible for out-of-town business trips. You’re also allowed to deduct the cost of meals and lodging. […]

By Linkenheimer LLP|2021-06-30T23:01:37+00:00June 30th, 2021|business, deduction, deductions|0 Comments

The Restaurant Revitalization Fund is Now Live

The COVID-19 pandemic has affected various industries in very different ways. Widespread lockdowns and discouraged movement have led to increased profitability for some manufacturers and many big-box retailers. The restaurant industry, however, has had a much harder go of it — especially smaller, privately owned businesses in economically challenged areas.

In response, the Small Business Administration (SBA) has launched the Restaurant Revitalization Fund (RRF). It was established under the American Rescue Plan Act (ARPA) signed into law in March. The RRF went live for applications on May 3, and the SBA is strongly urging interested, eligible businesses to apply as soon as possible.

Who’s eligible?

Funds are available for restaurants, of course, but also many other similar types of businesses. Food stands, trucks and carts can apply, as well as bars, saloons, lounges and taverns. Catering companies may also file an RRF application.

In addition, the program is available to snack and nonalcoholic beverage bars, as well as “licensed facilities or premises of a beverage alcohol producer where the public may taste, sample, or purchase products,” according to the SBA.

For some restaurant-like businesses, on-site sales to the public must comprise at least 33% of gross receipts. […]

By Linkenheimer LLP|2021-05-05T15:31:54+00:00May 5th, 2021|restaurant, sba|0 Comments

Apply for Restaurant Grants Starting Monday, May 3

The SBA will allow potential applicants to register and open up accounts to apply for revitalization grants starting April 30, 2021, at 9:00 a.m. EDT. Actual applications may be submitted starting Monday May 3, 2021, at noon EDT. The online application will remain open to any eligible establishment until all of the $25 billion of available funds is exhausted.

For the first 21 days that the program is open, the SBA will prioritize funding applications from businesses owned and controlled by women, veterans, and socially and economically disadvantaged individuals. However, all eligible applicants should submit applications as soon as the online application portal opens. Following the 21 days, all eligible applications will be funded on a first-come, first-served basis.

In preparation, the SBA recommends qualifying applicants familiarize themselves with the application process in advance to ensure a smooth and efficient application experience, specifically by:

Registering for an account in advance at restaurants.sba.gov starting Friday, April 30, 2021, at 9 a.m. EDT.
Reviewing the official guidance, including program guide, frequently asked questions, and application sample.
Preparing the required documentation.
Working with a point-of-sale vendor or visiting restaurants.sba.gov to submit an application when the application portal opens. [Note: […]

By Linkenheimer LLP|2021-04-29T15:25:29+00:00April 28th, 2021|business, restaurant, sba|0 Comments

Claiming the Business Energy Credit for Using Alternative Energy

Are you wondering whether alternative energy technologies can help you manage energy costs in your business? If so, there’s a valuable federal income tax benefit (the business energy credit) that applies to the acquisition of many types of alternative energy property.

The credit is intended primarily for business users of alternative energy (other energy tax breaks apply if you use alternative energy in your home or produce energy for sale).

Eligible property

The business energy credit equals 30% of the basis of the following:

Equipment, the construction of which begins before 2024, that uses solar energy to generate electricity for heating and cooling structures, for hot water, or heat used in industrial or commercial processes (except for swimming pools). If construction began in 2020, the credit rate is 26%, reduced to 22% for construction beginning in calendar year 2023; and, unless the property is placed in service before 2026, the credit rate is 10%.
Equipment, the construction of which begins before 2024, using solar energy to illuminate a structure’s inside using fiber-optic distributed sunlight. If construction began in 2020, the credit rate is 26%, reduced to 22% for construction beginning in 2023; and, unless the […]

By Linkenheimer LLP|2021-04-27T16:32:23+00:00April 27th, 2021|business, tax credit|0 Comments

Know the Ins and Outs of “Reasonable Compensation” for a Corporate Business Owner

Owners of incorporated businesses know that there’s a tax advantage to taking money out of a C corporation as compensation rather than as dividends. The reason: A corporation can deduct the salaries and bonuses that it pays executives, but not dividend payments. Thus, if funds are paid as dividends, they’re taxed twice, once to the corporation and once to the recipient. Money paid out as compensation is only taxed once — to the employee who receives it.

However, there are limits to how much money you can take out of the corporation this way. Under tax law, compensation can be deducted only to the extent that it’s reasonable. Any unreasonable portion isn’t deductible and, if paid to a shareholder, may be taxed as if it were a dividend. Keep in mind that the IRS is generally more interested in unreasonable compensation payments made to someone “related” to a corporation, such as a shareholder-employee or a member of a shareholder’s family.

Determining reasonable compensation

There’s no easy way to determine what’s reasonable. In an audit, the IRS examines the amount that similar companies would pay for comparable services under similar circumstances. Factors that are taken into […]

By Linkenheimer LLP|2021-04-21T17:12:17+00:00April 21st, 2021|business, irs|0 Comments