Nonpassive income and losses are usually declarable and deductible in the year they are incurred. However, to take them the taxpayer must annually and actively participate for more than 500 hours in the business venture (100 hours if no one else in the business works more than that). Other income can also qualify, such as from investment portfolios and ..read more

is the accounting term that describes the expenses incurred to produce the goods or services a company sells. COGS is also a tax available to businesses, even online resellers who don’t have raw material or production costs. However, while shipping raw materials counts as a COGS expense, bubble wrap to deliver a widget to a customer doesn’t, so it’s important to learn the rules ..read more

Maybe. LLCs provide superior legal and financial protection for personal assets of company owners, who also can deduct 20% of their business income before their taxes are calculated. An LLC can choose to be taxed as a . Under the Tax Cuts and Jobs Act, there is especially beneficial tax treatment for S-Corp distributions. Check with a tax advisor to see which structure makes the most sense ..read more

Depreciation refers to how much of an ’s value is left over time due to usage or becoming obsolete. Businesses can recover the cost of an eligible asset by writing off the expense over its useful life.  There are five ways of calculating this under . The straight-line method is the simplest to calculate and most commonly used ..read more