Blog Archives

Confused About Your Settlement?

9/22/2016

Do you have a settlement coming in? Confused about how this will affect your tax situation this year? The rules regarding settlements can be a bit confusing. Read on and we will try to help clear it up for you.

Whether or not your settlement is deductible depends on why you are receiving a settlement in the first place. If you are receiving a settlement to compensate for injury or illness, chances are you are in the clear. However, if you are receiving funds to cover lost wages or other benefits, you will be required to include your settlement in your gross income for the tax year. You should still be able to deduct your legal fees under IRC Sec. 62(a)(20) though.

We can help you navigate these tax laws. Call our office. We would be happy to help you make sense of your tax obligations!

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New Business Opportunity?

9/19/2016

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Thinking of starting a new business? Before you get ahead of yourself and start making purchases, read this.

In 2010 an airline pilot purchased a plane to start a side business. Even though she had done her research into what her rates could be and made a business plan, she never advertised nor did she have any clientele.

The Tax Court has ruled that if you intend to start a business, but don’t actually participate in any trade, you cannot deduct your expenses. Since she did not take that next step in that calendar year to go from planning to obtaining clients, she could not deduct the cost of the airplane.

What does this mean practically? If you are starting a new business, but won’t be able to make the next step toward gaining clientele until the next tax year, you should hold off on any large purchases.

Don’t go it alone! We specialize in small business. Let us help you start your new business off on the right foot. Call us to make an appointment today!

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Confused About Your Settlement?

New Business Opportunity?

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