How Gig Economy Worker Can Prevent Tax Penalties !

gig economy worker

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 not just music or jazz but all sorts of small jobs that a person or …

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2020 Mileage Reimbursement Calculator

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.

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IRS Issues Per Diem Rates 2019 for deductible business travel expenses

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 are among the most common business expense deductions and also most litigation prone . The …

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What is Hobby Loss Rules ?

What is Hobby Loss Rules

What is Hobby Loss RulesThe 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

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How Section 179 Deduction Saves a lot of Taxes!

Section 179 Deduction

Section 179 DeductionFor 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.

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2019 Standard Mileage Rates Announced !

2019 Mileage Rates

The Internal Revenue Service (IRS) has issued the 2019 standard mileage reimbursement rates. Beginning on January 1, 2019, the standard mileage rates for the use of a car, van, pickup or panel truck will be: 58 cents per mile for business miles driven (up from 54.5 cents in 2018) 20 cents per mile driven for …

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IRS Notice 2018-76-Five Conditions for Claiming Meal Deduction

There is good news for business onwers- IRS has just issued Notice 2018-76 that pertains to deductions for meals and entertainment. As you know , under the pre-TCJA law, businesses could deduct upto 50 percent of the amount of the entertainment expense under Code Section 274(n)(1) if the said entertainment expense was directly related to taxpayer’s trade or business. The expense on food & beverages was all part of “Entertainment Expenses”.However, The Tax Cut & Jobs Act (TCJA ) did not define  circumstances under which food and beverages might constitute entertainment . Thus , expense on meals  is not deductible, even if  that was indeed incurred entirely for the business purpose 

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