Tax problem solver

2023 Individual Tax Highlights The worst time to know about new tax laws is when it is too late to do anything about it. Here is a summary of the most impactful changes this year.

One way that construction companies can mitigate supply-chain problems is to maintain their own inventories. However, an inventory may complicate tax planning. Here are three big issues to consider: 1) Valuation; the value of inventory is a factor in the calculation of cost of goods sold, which helps determine taxable income. 2) Shrinkage; this is the loss of inventory because of damage, fraud, theft or other factors. The IRS expects businesses to track inventory shrinkage and adjust their records accordingly. 3) State and local taxes; states and municipalities may impose their own taxes on inventory, which usually fall under property taxes. Contact us for assistance and more information.

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, but the deduction is reduced by the amount by which your total start-up costs exceed $50,000. You can also deduct $5,000 of the organizational costs of creating a corporation or partnership. Contact us if you have tax questions about a start-up business.