The beginning of April has arrived and Mastanduno Law Group would like to check in and see if your taxes are ready to be sent or e-filed. Some last minute questions might emerge and we’re available to give you tax advice as the deadline approaches.
A client’s personal choices often have tax implications, particularly in the case of a small business when you want to make sure every expense is reported properly. For deductions, the IRS defines eligible business expenses as expenses that are “ordinary and necessary” in conducting your business. Ordinary refers to something that is commonly accepted in the trade while necessary means things are helpful and integral to running the business. However, these guidelines are not specific enough to apply to everything that contributes to the operation of your business.
It’s possible for business owners to misinterpret the criteria that allow business expenses to be eligible for tax deductions. Take a nonprofit organization for example: depending on the services that your organization provides, you may or may not be able to deduct certain items based on national or local law. Additionally, nonprofits are required to register with the IRS and must conform to special laws for businesses with tax-exempt status.
Circumstances can become more confusing if your personal home or vehicle is involved in running the business. Or perhaps you want to expand your business for some reason, even to physically attach a different kind of business to your current business. The idea might sound absurd, but in 2014, the Evergreen Aviation Museum in McMinnville wanted to add a waterpark to the museum in an effort to draw in more customers and expand their property tax exemptions. Unfortunately, the organization had to file for bankruptcy and sell the entertainment area because Oregon does not often give companies tax deals in exchange for new, nonexempt, expansions. This is an uncommon situation, but is nevertheless a danger of not fully considering the tax implications of your business choices.
Only a week remains so make a list of tax questions you would like to ask Mastanduno Law Group. And don’t forget to ask them to give you a bill that itemizes your tax consultation, because you can write off the legal fees for that too.