If you operate your small business as a sole proprietorship, you may have thought about forming an LLC to protect your assets. Like corporate shareholders, LLC owners (or members) generally aren’t liable for the debts of the business except to the extent of their investments. So their personal assets are protected from the entity’s creditors. Plus, partnership earnings aren’t subject to an entity-level tax. Instead, they “flow through” to the […]
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If you’re age 50 or older, you can probably make extra catch-up contributions to your tax-favored retirement account(s). It is worth the trouble? Yes! Eligible taxpayers can make extra catch-up contributions of up to $1,000 annually to a traditional or Roth IRA. If you’ll be 50 or older as of Dec. 31, 2023, you can make a catch-up contribution for 2023 by April 15, 2024. However, there are income limits […]
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If you own an unincorporated small business, you know your self-employment (SE) tax bills are high. In 2023, SE tax is imposed at a rate of 15.3% on the first $160,200 of net SE income. This includes 12.4% for Social Security tax and 2.9% for Medicare tax. Above $160,200, Medicare tax continues at a 2.9% rate on all income before increasing to 3.8% at higher income levels due to the […]
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Government officials saw a large increase in the number of new businesses launched during the COVID-19 pandemic. And the U.S. Census Bureau reports that business applications are still increasing slightly (up 0.4% from April 2023 to May 2023). Entrepreneurs often don’t know that many start-up expenses can’t be currently deducted. Some likely have to be amortized over time. You might be able to elect to deduct up to $5,000 currently, […]
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The recent heat wave may have you thinking about making your home more energy efficient. Thanks to a 2022 law, you may be able to benefit from a residential energy tax credit to help defray the cost of energy improvements made on or after Jan. 1, 2023. The credit equals 30% of certain expenses to a home located in the U.S., including: qualified energy efficiency improvements installed during the year, […]
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