What the IRS is Looking for in Corporate Jet Audits

The IRS' recent declaration of a rigorous enforcement against the utilization of corporate jets has attracted widespread attention, as the Biden administration persists in intensifying its examination of affluent individuals and major corporations with intricate tax arrangements. Zeinat Zughayer, a tax controversy manager at Baker Tilly, provided information on the driving force behind the recent wave of audits and the extent of their coverage. The IRS recently declared its intention to commence several audits targeting the apportionment of corporate aircraft usage between business and personal purposes by executives, partners, shareholders, and other individuals for tax-related matters. According to the IRS, the level of personal usage has an effect on the eligibility for specific company deductions. "Utilizing the company jet for personal travel usually leads to the...

Update on Depreciating Business Assets

The Tax Cuts and Jobs Act liberalized the rules for depreciating business assets. However, the amounts change every year due to inflation adjustments. And due to high inflation, the adjustments for 2023 were big. Here are the numbers that small business owners need to know. §179 deductions For qualifying assets placed in service in tax years beginning in 2023, the maximum §179 deduction is $1.16 million. But if your business puts in service more than $2.89 million of qualified assets, the maximum §179 deduction begins to be phased out. Eligible assets include depreciable personal property such as equipment, computer hardware and peripherals, vehicles and commercially available software. §179 deductions can also be claimed for real estate qualified improvement property (QIP), up to the maximum allowance of $1.16 million. QIP...

Best Practices for PPP Loan Forgiveness

Congratulations on receiving your Paycheck Protection Program (PPP) loan! We hope it provides much needed cash during these uncertain times. Now that you have the funds, here are some best practices for PPP loan forgiveness over the next 8 weeks to ensure maximum retention. Use the Funds for Forgivable Purposes Best practices for PPP loan forgiveness revolve largely on whether you use the money to pay forgivable expenses. These include: payroll costs (if you’re self-employed, these costs include the net profit amount from your business, as reported on your 2019 tax return), interest payments on mortgages incurred before 2/15/20, rent payments on leases dated before 2/15/20, and utility payments under service agreements dated before 2/15/20. However, according to the Small Business Administration (SBA), not more than 25% of...