Pit & Quarry, November 2017
TAXES Reasonable compensation The IRS can and will challenge salary amounts they deem to be unreasonable While the factors used by the IRS and the courts to determine reasonable compensation vary the IRS typically looks at training and experience duties and responsibilities time and effort devoted to the business and more The courts generally look at amounts paid by comparable businesses for similar services the use of a bonus formula and the importance of the role played by the compensated individual Carryovers and carryforwards Certain credits and deductions have limits that prevent them from being used in full in the current tax year but could be carried over to future years Think Capital losses General business credits Home office deductions Net operating losses Net operating losses NOLs or non capital losses occur when the aggregate business expenses exceed its income NOLs can be used to offset income in any given tax year as well as carried back three years or carried forward for up to seven years It may make more sense to carry any NOL back to recover income taxes already paid Or it can be carried forward to offset an anticipated larger tax bill down the line But remember the possibility of lower tax rates New deadlines In an attempt to stagger filing deadlines so tax returns of entities that pass through income and losses such as partnerships and S corporations tax returns are now due by March 15 as opposed to April 15 Regular C corporation tax returns are now due by April 15 as opposed to March 15 Form 1099 and W 2 deadlines The IRS is no longer granting automatic extensions for filing Form W 2 To stop the increase of identity theft lawmakers require employers to file Forms W 2 W 3 and 1099 MISC statements to the IRS and the Social Security Administration by Jan 31 2018 PROPOSED TAX RATES AND PASS THROUGH BUSINESSES Income from aggregate businesses such as partnerships S corporations and sole proprietorships claimed on individual tax returns that is passed through to the business owners is taxed at the owners individual tax rate These businesses already have the advantage of being exempt from the corporate tax on profits and taxes on dividends The proposed reductions in the federal tax rate are expected to significantly reduce the tax bills of aggregates businesses incorporated as regular C corporations However this reduction would give closely held businesses a significant reason to consider converting their pass through entities which are currently taxed at the owner level to regular corporations 360 Eastpark Dr Norwalk Ohio 44857 4196631048 Visit AlliedPBS com or email info@ AlliedPBS com Contact us for our Extensive Dealer Network PROUDLY MADE IN THE USA @ AlliedBooms REPAIR REBUILD REPLACE Choose from our expanded selection or send your specs and well fabricate custom parts TRUSTED SINCE 1974 For parts a custom design or an expert consultation call 8779261511 eccofab com 64 PIT QUARRY November 2017 pitandquarry com
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