As a business owner, you bear the responsibility of paying income tax whether your business is a sole proprietorship, a partnership, an LLC, or a corporation. Proper calculation and payment of your business taxes are essential for the financial health of your company and to ensure that you do not encounter any legal or tax liability issues in the future.
Business income taxes are extremely complex, especially in light of recent changes in tax legislation. Without the proper skills and an intimate knowledge of tax law, it is very easy to make a mistake that could prove costly for your company. Sarasota accountants Jo Ann M. Koontz and Marina Parkin can assist you in calculating your business income tax, taking advantage of the deductions available to you, and avoiding serious mistakes.
The Tax Cuts and Jobs Act have changed many of the old strategies for advising clients at year end. It is essential that you take advantage of the tax incentives and create a comprehensive tax plan that takes benefits into consideration. Koontz & Parkin, CPAs follow these changes closely and are ready to help you take advantage of these incentives and put a creative financial strategy in place for the future.
One of the biggest changes from the Tax Cuts and Jobs Act was the allowance of a 20 percent deduction of qualified business income from owners of sole proprietorships and passthrough entities. For 2019, those deduction begins to phaseout at $321,400 for joint filers, $160,700 for all others. Taxpayers in one of these specified areas may want to explore ways to defer income to 2020 if they are near the phase-out threshold.
The Tax Cuts and Jobs Act provided very generous depreciation and expensing limitations. Businesses may want to take advantage of the 100% first-year depreciation on machinery and equipment purchased during the year.
Under Internal Revenue Code Section 179, taxpayers in 2019 may expense as much as $1,020,000 of qualifying property reduced by the amount by which the property exceeds $2,550,000.
Business vehicles have always been eligible for tax deductions. However, new changes have been made with regard to depreciation reductions and lease inclusions. Vehicle expenses can be calculated using mileage costs or using actual expenses, such as lease payments, registration, maintenance, storage, repairs, oil changes, and tolls. The actual deductions taken will vary depending on the size and type of vehicle, whether it is a luxury car, and whether it is leased. Deciding whether to calculate costs based on mileage or actual expenses can be tricky. Koontz & Parkin, CPAs can help you make the right decision for your business.
Jo Ann M. Koontz and Marina Parkin offer a powerful combination of in-depth knowledge of tax regulations, a firm grasp of the business world, and years of experience representing tax clients. To schedule a consultation, call the Sarasota office of Koontz & Parkin, CPAs at 941.328.3993.