Generally a business can deduct normal business expenses such as rent, payroll, etc. However, the IRS is using an obscure section of the code passed during the Reagan Administration as part of the “War on Drugs” to deny normal business expenses to medical marijuana-related businesses. § 280E Expenditures in connection with the illegal sale of drugs – No deduction or credit … [Read more...] about The IRS Is Attacking the Medical Marijuana Business
New Credits for Hiring Veterans
Congress recently passed legislation that extends and expands the Work Opportunity Credit (WOTC) for hiring unemployed veterans. This effectively gave a one-year lease on life to the WOTC, but only with respect to qualified veterans who begin work for the employer beforeJanuary 1, 2013. For all other classifications, the credit ended at the close of 2011. Under the new law, … [Read more...] about New Credits for Hiring Veterans
Are You Required to File 1099s?
If you use independent contractors to perform services for your business and you pay them $600 or more for the year, you are required to issue them a Form 1099 after the end of the year to avoid facing the loss of the deduction for their labor and expenses and to avoid a monetary penalty. The 1099s for 2011 must be provided to the independent contractor no later thanJanuary 31, … [Read more...] about Are You Required to File 1099s?
Are You Liable for a Gift Tax Return?
Frequently, taxpayers think that gifts of cash, securities, or other assets they give to other individuals are tax-deductible and, in turn, the gift recipient sometimes thinks income tax must be paid on the gift received. Nothing is further from the truth. To fully understand the ramifications of gifting, one needs to realize that gift tax laws are related to estate tax … [Read more...] about Are You Liable for a Gift Tax Return?
2012 Standard Mileage Rates Announced
The Internal Revenue Service has issued the 2012 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes. Beginning onJanuary 1, 2012, the standard mileage rates for the use of a car (also vans, pickups, or panel trucks) will be: 55.5 cents per mile for business miles … [Read more...] about 2012 Standard Mileage Rates Announced