2022 Q4 tax calendar: Key deadlines for businesses and other employers
Here are some important 4th quarter tax-filing dates for businesses. OCT. 17: If you’re the owner or operator of a calendar-year C corp. which filed an extension, file a 2021 income tax return. OCT. 31: Report income tax withholding and FICA taxes for Q3 2022 (unless you’re eligible for a Nov. 10 deadline because you deposited on time and in full all of the associated taxes due). DEC. 15: If a calendar-year C corp., pay the fourth installment of 2022 estimated income taxes. Note: Certain deadlines may be postponed in federally declared disaster areas. We can provide more information about filing requirements and ensure you’re meeting all applicable deadlines.
Sometimes businesses need to show customers tough love
Every business needs customers or clients to survive. But to truly thrive, evaluate which customers support your company and which ones are dragging it down. There are many ways to do so. If your sales system tracks customer purchases, and your accounting system has good cost accounting or decision support capabilities, the process is simple. Companies that don’t track individual customers can still generally analyze customer segments or products. After you’ve assigned profitability levels to each customer or customer segment, sort them into an A group of optimal customers, a B group of acceptable ones, and a C group that aren’t profitable and you might want to let go. Contact us for help.
Seller-paid points: Can homeowners deduct them?
The National Association of Realtors reports that July 2022 existing home sales were down but prices were up nationwide, compared with 2021. If you’re a homebuyer, you may wonder if you can deduct mortgage points paid on your behalf by the seller. The answer is “yes,” subject to some important limits. For example, the rule allowing a deduction for seller-paid points doesn’t apply to points that are allocated to the part of a mortgage above $750,000 ($375,000 for married filing separately) for tax years 2018 through 2025 (above $1 million for tax years before 2018 and after 2025). It also doesn’t apply to points on a loan used to improve (rather than buy) a home and in other situations.
Want to see into the future? Delve deeper into forecasting
For a company to be truly successful, its ownership needs to attempt the impossible: see into the future. Forecasting key metrics can help keep your business on solid financial footing. Bear in mind that forecasting is generally more accurate in the short term. Depending on your goals, you’ll likely need to choose between: 1) quantitative methods, which rely on historical data, and 2) qualitative methods, which rely on expert opinions instead of company-specific info. Consider investing in forecasting software, which allows you to plug many additional variables into the equation. If your company maintains extensive inventory, be particularly diligent about forecasting. Contact us for help.
Is your income high enough to owe two extra taxes?
High-income taxpayers may face the 3.8% net investment income tax (NIIT). The NIIT applies, in addition to income tax, on your net investment income. It only affects taxpayers with adjusted gross income exceeding $250,000 for joint filers, $200,000 for single taxpayers and heads of household, and $125,000 for married individuals filing separately. The income that’s subject to the NIIT includes interest, dividends, annuities, royalties, rents and net gains from property sales. Wage income and income from an active trade or business isn’t included. However, passive business income is subject to the NIIT. Questions? Contact us to discuss this tax and how its impact may be reduced.
Year-end tax planning ideas for your small business
With Labor Day past us, it’s a good time to start thinking about making moves that may help lower your small business taxes for 2022 and 2023. A standard year-end approach is to defer income and accelerate deductions to minimize taxes, as well as to bunch deductible expenses into this year or next to maximize their tax value. Other ideas: Buy eligible equipment and place it in service by Dec. 31 to claim a Section 179 or 100% bonus depreciation deduction. Eligible businesses also may be able to defer income or accelerate deductions to keep income under certain thresholds to claim a qualified business income deduction. Contact us for year-end tax-saving strategies that work for your business.
Make marketing better with a brand audit
Your business brand is more than just a logo. It’s a distinctive combination of identifiers that represents who you are, what you do and how you operate. To assess the strength of their brands and improve marketing strategies, many companies conduct a brand audit. There are various ways to conduct one, but most audits have certain things in common. First, they rely on information already on hand or relatively easy to generate such as sales data, website analytics and social media interactions. They also usually involve surveying customers with various brand-related questions. A brand-focused employee survey can also be useful. Contact us for help assessing the costs of a brand audit.
The Inflation Reduction Act: what’s in it for you?
The Inflation Reduction Act (IRA), which was signed into law recently, contains, extends and modifies many climate and energy-related tax credits. For example, there’s a credit for a percentage of certain expenses for nonbusiness energy-saving property placed in service before Jan. 1, 2033. The credit is further increased for amounts spent for a home energy audit (up to $150). In addition, the IRA repeals the lifetime credit limitation, and instead limits the credit to $1,200 per taxpayer, per year. There are also annual limits for certain types of property. Contact us if you have questions about taking advantage of this or other tax credits in the IRA.
Inflation Reduction Act provisions of interest to small businesses
The new Inflation Reduction Act contains a provision that provides tax relief for small businesses. Under current law, qualified small businesses can elect to claim a portion of their research credit as a payroll tax credit against their employer Social Security tax liability, rather than against their income tax liability. A qualified small business can now claim up to $250,000 of its credit for increasing research activities as a payroll tax credit. Under the new law, qualified small businesses can apply an additional $250,000 in qualifying research expenses as a payroll credit against the employer share of Medicare. This provision takes effect for tax years beginning after Dec. 31, 2022.
Home sweet home: Do you qualify for office deductions?
If you’re a business owner working from home or an entrepreneur with a side gig, you may qualify for home office deductions. On the other hand, employees who work remotely can’t deduct home office expenses under current federal tax law. To qualify for a deduction, you must use part of your home regularly and exclusively as your principal place of business, or a place to meet with customers, clients or patients in the normal course of business. Typically, the business use percentage is determined by your home office’s square footage but there are other methods. We can address questions about the best way to compute home office deductions and the tax implications when you sell your home.