CHASE LAW NAVIGATOR
TAX
One of the biggest burdens on businesses is taxes. Namely, how to pay less in tax. Tax strategy may be confusing and complex but a business owner needs to know it in and out, and/or employ a tax accountant and/or tax attorney to make sure the business stays compliant as the law continues to change.
FEDERAL TAX (INCOME AND DEDUCTIONS)
How is the federal tax rate determined for my business?
All businesses except partnerships must file an annual income tax return. Partnerships file an information return.
Can I deduct expenses for start up costs before I open up?
Business assets
Improvements
What is the best tax designation for my business and how do I elect for it?
Note that the type of business entity your business selects is not necessarily the same as the entity designation for tax purposes.
PAYROLL TAX
How do I account for business use of my personal vehicle or personal use of my business vehicle? Can I write off all expenses to a business vehicle or are there limitations?
If you are using an asset (either personal or business) for both personal and business uses, you are required to keep track of the amount of use for each, and bifurcate those uses for the purpose of tax reporting. Business expenses can be deducted, personal expenses cannot. If you do not keep good records and then you get audited, the IRS will not give you the benefit of the doubt and you will not be allowed to have the claimed deductions for items not properly and reliably recorded.
If I work from home, can I write off my house or home office as business expenses?
If you use part of your home for business, you may be able to deduct expenses for the business use of your home. The home office deduction is available for homeowners and renters, and applies to all types of homes. There are multiple methods for deducting such expenses that the IRS allows.
If my business pays personal expenses, can I write those expenses off?
Generally, you cannot deduct personal, living, or family expenses. However, if you have an expense for something that is used partly for business and partly for personal purposes, divide the total cost between the business and personal parts. You can deduct the business part.
PERSONAL USE OF BUSINESS ASSETS
How do I account for business use of my personal vehicle or personal use of my business vehicle? Can I write off all expenses to a business vehicle or are there limitations?
If you are using an asset (either personal or business) for both personal and business uses, you are required to keep track of the amount of use for each, and bifurcate those uses for the purpose of tax reporting. Business expenses can be deducted, personal expenses cannot. If you do not keep good records and then you get audited, the IRS will not give you the benefit of the doubt and you will not be allowed to have the claimed deductions for items not properly and reliably recorded.
If I work from home, can I write off my house or home office as business expenses?
If you use part of your home for business, you may be able to deduct expenses for the business use of your home. The home office deduction is available for homeowners and renters, and applies to all types of homes. There are multiple methods for deducting such expenses that the IRS allows.
If my business pays personal expenses, can I write those expenses off?
Generally, you cannot deduct personal, living, or family expenses. However, if you have an expense for something that is used partly for business and partly for personal purposes, divide the total cost between the business and personal parts. You can deduct the business part.
SALES TAX (STATE AND LOCAL)
How is the federal tax rate determined for my business?
All businesses except partnerships must file an annual income tax return. Partnerships file an information return.
Can I deduct expenses for start up costs before I open up?
Business assets
Improvements
What is the best tax designation for my business and how do I elect for it?
Note that the type of business entity your business selects is not necessarily the same as the entity designation for tax purposes.
TAX ENTITY REGISTRATIONS (FEDERAL AND STATE)
How do I account for business use of my personal vehicle or personal use of my business vehicle? Can I write off all expenses to a business vehicle or are there limitations?
If you are using an asset (either personal or business) for both personal and business uses, you are required to keep track of the amount of use for each, and bifurcate those uses for the purpose of tax reporting. Business expenses can be deducted, personal expenses cannot. If you do not keep good records and then you get audited, the IRS will not give you the benefit of the doubt and you will not be allowed to have the claimed deductions for items not properly and reliably recorded.
If I work from home, can I write off my house or home office as business expenses?
If you use part of your home for business, you may be able to deduct expenses for the business use of your home. The home office deduction is available for homeowners and renters, and applies to all types of homes. There are multiple methods for deducting such expenses that the IRS allows.
If my business pays personal expenses, can I write those expenses off?
Generally, you cannot deduct personal, living, or family expenses. However, if you have an expense for something that is used partly for business and partly for personal purposes, divide the total cost between the business and personal parts. You can deduct the business part.