Business

Is Your Business Closing? Here Are Your Final Tax Responsibilities

Businesses shut down for many reasons. Examples include an owner’s retirement, a lease expiration, staffing shortages, partner conflicts, and increased supply costs. If you’ve decided to close your business, you might need assistance with some steps in the process, including handling various tax obligations.

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4 Ways C Corporations Ensure “Reasonable” Compensation

If you own a C corporation, you know there’s a tax advantage to taking money out as compensation rather than as dividends. The reason: A corporation can deduct the salaries and bonuses that it pays executives, but it can’t deduct dividend payments. Therefore, 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 taxed only once to the recipient employee.

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Retirement Saving Options for Your Small Business

Consider some options if you’re looking for a retirement plan for yourself and your employees but are worried about the financial commitment and administrative burdens involved. One possibility is a Simplified Employee Pension (SEP).

This plan, which comes with relative ease of administration and the discretion to make or not make annual contributions, is especially attractive for small businesses.

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Hiring? How to Benefit from the Work Opportunity Tax Credit

If you’re a business owner or manager seeking to hire, you should be aware of the details of a valuable tax credit for hiring individuals from one or more targeted groups. Employers can qualify for the Work Opportunity Tax Credit (WOTC), which is worth as much as $2,400 for most eligible employees (higher or lower for certain employees). The credit is limited to eligible employees who begin work for an employer before January 1, 2026.

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Handling Large Cash Transactions

Large Cash Transaction Reporting A reminder for businesses: Within 15 days of a $10,000 transaction, you must use IRS Form 8300 to report the transactions. If you file electronically, forms are delivered to the Financial Crimes Enforcement Network. Paper forms are submitted …

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Deductions vs. Credits: What’s the Difference?

One of the most common misunderstandings about filing an income tax return is the difference between deductions and credits. Deductions reduce the amount of a taxpayer’s income before tax is calculated. For example, on your individual return, you can either take the standard deduction or itemize deductions if it will reduce your taxable income more. Credits, on the other hand, reduce the actual tax due, dollar-for-dollar, generally making them more valuable than deductions.

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Worker Classification: Employee vs. Contractor

If you hire someone for a long-term, full-time project or a series of projects that are likely to last for an extended period, you must pay special attention to the difference between independent contractors and employees.

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