What is a Gig? The Oxford dictionary defines a Gig as “a performance by musicians playing popular music or jazz in front of an audience; a similar performance by a comedian”. What is gig economy? But , nowadays, a gig is… Read More »How Gig Economy Worker Can Prevent Tax Penalties !
IRS fuel Mileage reimbursement calculator for the tax year 2020 helps a taxpayer to compute deduction allowable as per the standard mileage rate declared by IRS under mileage reimbursement policy, whichever is greater from the gross total income. You can read the announcement by IRS about the mileage reimbursement rate for the tax year 2020.Read More »2020 Mileage Reimbursement Calculator
The Internal Revenue Service issued Notice 2019-55 which elaborates new per diem rates 2019 effective from Oct. 1, 2019. These per diem rates are used for calculation of deductible business travel expense like lodging, meals and incidental expenses. Travel expenses… Read More »IRS Issues Per Diem Rates 2019 for deductible business travel expenses
The term “Hobby Loss Rule” is quite significant and basically states that the expenditure to pursue a recreational activity which is not recouped as the law allows deduction of expense only to the extent of income earned by the hobby or recreational activity. Internal Revenue Code (IRC) §183 provides the law to curb perceived loss deduction abuses by hobbyists. Simply put , while in case of a business activity , one gets deduction of all expenses/losses incurred even if there is no profit , the same benefit is not available if the activity is treated as hobby .In case of hobbies , the expenses related to the hobby are only deductible up to the amount of any income you earned from your hobby. This is termed as hobby loss rules . The hobby loss rules apply to individuals, S corporations, trusts, estates, and partnerships, but not to C corporations. Read More »What is Hobby Loss Rules ?
For small business , section 179 deduction is great !The Tax Cuts & Jobs Act has amended depreciation rule under section 179 of the Internal Revenue Code to allow the claim of $1,000,000 of depreciation from $ 5,00,000 allowed earlier.Even the bonus depreciation is now 100 percent. The TCJA has further increased the equipment purchase limits to $2.5 million.
What is IRC Section 179 ?
Section 179 deduction is basically claimed of depreciation in one year . Simply put, Internal Revenue Code allows a business person to claim 100 % of expense on certain types of capital expenditure i.e on buying assets for use in business. This is unlike other capital assets where the full depreciation is not allowed. So section 179 expense has a direct effect on lowering your business profit and consequently results in huge savings on tax payments.For example, if you buy a car for $ 50,000 for business purpose and immediately used, you can claim $ 50,000 as the deduction under section 179 by opting and attaching the form 4562 with your tax return.Read More »How Section 179 Deduction Saves a lot of Taxes!