Although there are legitimate reasons for some Maine business entities to choose a partnership structure, partnership status may be undesirable for certain activities involving more than one co-owner. Here are some tax-related reasons to avoid partnership status for your business: Tax elections. If a partnership exists, certain tax elections must be made at the partnership level  Continue Reading »

The U.S. Supreme Court adjourned for its summer recess at the end of June. Here are five recent cases from its 2016 term that may be of interest to business owners and managers. 1. Advocate Health Care Network v. Stapleton (S. Ct. No. 16-74, June 5, 2017) Generally, employees are protected from unexpected losses in their retirement  Continue Reading »

Recently, it was ruled by the U.S. Tax Court that the Boston Bruins hockey team’s pregame meals to players and personnel at out-of-town hotels qualified as a de minimis fringe benefit under the Internal Revenue Code. Therefore, 100% of the cost of those meals could be deducted, and it wasn’t subject to the 50% tax  Continue Reading »

Starting up a small business in Maine and wondering about how tax deductions will be handled? It’s very important to remember that most expenses incurred before a business begins functioning cannot be deducted or amortized until the year when the business does become active. The Basics of Business Expenses Section 162 of the Internal Revenue  Continue Reading »

Do you know what to do if you discover an error on a previously filed individual tax return? For instance, you might have missed some tax-saving deductions and credits on your 2016 personal federal income tax return that you filed in February. Or you might have recently discovered that you failed to claim some legitimate tax  Continue Reading »

The IRS recently explained a simplified method for claiming the home office deduction that offers a time-saving option. However, many taxpayers who maintain a home office fare better tax-wise by deducting expenses under the regular method, and others may not be eligible to deduct any home office expenses. Here’s why. Regular and Exclusive Use There  Continue Reading »

You may be eligible for a research tax credit that can now be used to offset your federal payroll tax bill —if your small business engages in qualified research activities. The IRS recently issued guidance that explains how to take advantage of this election. This relatively new privilege allows research credits to benefit small businesses that may  Continue Reading »

In order to deduct an expense as a business expense, it must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your field of business, and a necessary expense is one that’s helpful and appropriate for your business. There are times when the IRS will challenge deductions claimed for  Continue Reading »

You may be considered part of the “sharing economy” (also known as the Gig or on-demand economy) in Maine if you provide car rides through a mobile app, rent out your spare room using an online platform or repair computers for local businesses on demand. Participation in this emerging method of distributing services can be a  Continue Reading »

You may be wondering whether the expense of a contingent-fee arrangement with your attorney is deductible for federal income tax purposes. Unfortunately, the guidance on this controversial issue isn’t favorable to taxpayers in most situations. The federal income tax treatment of contingent fees paid to an attorney out of a taxable non-business judgment or settlement  Continue Reading »