Businesses can reimburse employees for eligible out-of-pocket, work-related expenses through either an accountable or a nonaccountable employee reimbursement plan. The key difference lies in how the payments are treated for tax purposes. In an accountable plan, employers can reimburse employees for business expenses without classifying the payment as taxable income. Conversely, under a nonaccountable plan, […]

The thought of tax time can be stressful until you realize you’re due a refund from the U.S. government. A refund can provide you with a cash windfall that can help you financially, but you need to plan how best to use this money. Tax refund stats The Internal Revenue Service reported that the average […]

There’s no single test that determines whether an activity is a hobby or a business, but the IRS considers several factors, including: Whether you intend to make a profit Whether you rely on the income Whether incurred losses are expected for a new business or are unusual Whether the activity is run in a businesslike […]

Both individual retirement accounts and 401(k) plans are designed to help people save for retirement. A 401(k) is offered by your employer. You contribute a portion of your paycheck each pay period, and the amount you can contribute depends on your plan’s specific rules and IRS limits. For 2025, you can contribute up to $23,500 […]

Working for someone else will not necessarily guarantee you a retirement plan, as the financial and administrative costs of providing a retirement program can be prohibitive for smaller employers. But if you are self-employed (whether full-time or part-time), there is no reason you cannot fund your own retirement and reap the tax benefits associated with […]

Before you can determine whether an individual providing services should be treated as an employee or an independent contractor, you must consider all the relevant facts regarding the degree of control you have over the worker and the amount of independence the worker has. These relevant facts fall into three main categories: behavioral control, financial […]

Choosing the right business format is a critical step in establishing your business venture. Each structure has unique features, from tax implications to liability protections, that can significantly impact your operations and goals. A sole proprietorship is the simplest and least expensive business structure to create and operate. As the owner, you report profits or […]

Business owners have to start writing checks even before they start selling their products or services. How are those expenses treated for tax purposes? When starting a business, owners should treat all eligible costs incurred before opening as capital expenditures that are part of their basis in the business. Generally, the business can recover the […]

For any renovation or repair to qualify for a tax deduction, the work must qualify under IRS rules as a home (or capital) improvement. Examples of projects that may qualify include new additions, new roofs, whole room renovations, new siding, new heating or air conditioning systems and certain interior renovations such as new floors. In […]

Maybe you see how an off-hours activity can become a profitable company. Or perhaps you have a spouse who brings in sufficient income to support both of you, and you’d like to spend your days at home painting (or photographing) animal portraits and then selling those portraits to their owners. Can you write off the […]