Recent News

Inflation Enhances the 2023 Amounts for Health Savings Accounts

The IRS recently released guidance providing the 2023 inflation-adjusted amounts for Health Savings Accounts (HSAs). High inflation rates will result in next year’s amounts being increased more than they have been in recent years. HSA Basics An HSA is a trust created or organized exclusively for the purpose of paying the “qualified medical expenses” of an “account beneficiary.” An HSA can only be established for the benefit of an “eligible individual” who is covered under a “high deductible health plan.” In addition, a participant can’t be enrolled in Medicare or have other health coverage (exceptions include dental, vision, long-term care,...

Businesses May Receive Notices about Information Returns that Don’t Match IRS Records

The IRS has begun mailing notices to businesses, financial institutions and other payers that filed certain returns with information that doesn’t match the agency’s records. These CP2100 and CP2100A notices are sent by the IRS twice a year to payers who filed information returns that are missing a Taxpayer Identification Number (TIN), have an incorrect name or have a combination of both. Each notice has a list of persons who received payments from the business with identified TIN issues. If you receive one of these notices, you need to compare the accounts listed on the notice with your records and...

The Tax Mechanics Involved in the Sale of Trade or Business Property

What are the tax consequences of selling property used in your trade or business? There are many rules that can potentially apply to the sale of business property. Thus, to simplify discussion, let’s assume that the property you want to sell is land or depreciable property used in your business, and has been held by you for more than a year. (There are different rules for property held primarily for sale to customers in the ordinary course of business; intellectual property; low-income housing; property that involves farming or livestock; and other types of property.) General Rules Under the Internal Revenue...

Tax Considerations When Adding a New Partner at your Business

Adding a new partner in a partnership has several financial and legal implications. Let’s say you and your partners are planning to admit a new partner. The new partner will acquire a one-third interest in the partnership by making a cash contribution to it. Let’s further assume that your bases in your partnership interests are sufficient so that the decrease in your portions of the partnership’s liabilities because of the new partner’s entry won’t reduce your bases to zero. Not as Simple as it Seems Although the entry of a new partner appears to be a simple matter, it’s necessary...

AI for Small to Midsize Businesses Isn’t Going Away

Artificial intelligence (AI) has made great inroads into certain sectors of the U.S. economy. However, it hasn’t reached many small to midsize businesses (SMBs) in a major way … yet. In 2021, AI analysis firm Unsupervised published a survey of 520 SMB owners that found 48% of them still found AI too cost prohibitive. Forty percent said their businesses lacked the staff expertise to use it. But the survey also found that one in five owners were implementing some form of AI, and 20% of respondents already using AI believed it had increased their profitability. Defining the Term People sometimes...

Fully Deduct Business Meals This Year

The federal government is helping to pick up the tab for certain business meals. Under a provision that’s part of one of the COVID-19 relief laws, the usual deduction for 50% of the cost of business meals is doubled to 100% for food and beverages provided by restaurants in 2022 (and 2021). So, you can take a customer out for a business meal or order take-out for your team and temporarily write off the entire cost — including the tip, sales tax and any delivery charges. Basic Rules Despite eliminating deductions for business entertainment expenses in the Tax Cuts and...