If you’re the owner of an incorporated business, you know there’s a tax advantage to taking money out of a C corporation as compensation rather than as dividends. The reason: A corporation can deduct the salaries and bonuses that it pays executives, but not dividend payments. Therefore, if funds are paid as dividends, they’re taxed twice, once to the corporation and once to the recipient.
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Summer is around the corner so you may be thinking about hiring young people at your small business. At the same time, you may have children looking to earn extra spending money. You can save family income and payroll taxes by putting your child on the payroll. It’s a win-win!
Here are four tax advantages.
Let's say you have an unincorporated sideline activity that you think of as a business, including an activity involving horses. If you have a net loss (deductible expenses exceed revenue) on that activity and you think you can deduct that loss on your personal federal income tax return, think again!
If you or a loved one needs long-term care (LTC) services, there are insurance products that can help cover the cost. As an additional incentive, qualified LTC policies deliver some tax advantages.
In early March, Silicon Valley Bank (SVB) and Signature Bank unexpectedly collapsed. They became the second and third largest bank failures in U.S. history, respectively. The largest collapse involved Washington Mutual in 2008, precipitating the Great Recession. (See "Two Banks Collapse in One Week" at right.)
There's some sobering news amid other encouraging recent employment data that may take you by surprise in this tight labor market. After all, "now hiring" signs are everywhere, and some sources paint a picture of a historically strong jobs market.
Many people began working from home during the COVID-19 pandemic — and many still work from their home offices either all the time or on a hybrid basis. If you’re self-employed and run your business from home or perform certain functions there, you might be able to claim deductions for home office expenses against your business income.
The threat of a recession has persisted for over a year. With this uncertainty, many businesses may be considering layoffs. If you're seeing clues that your employer might slash jobs and you're worried about being on the firing line, it's smart to prepare. Here are five personal finance tips you can use … just in case.
1. Increase Savings