Small business owners who want to help employees pay for health insurance but cannot afford, or do not want to manage, a traditional group health plan may have two alternatives to consider: the Qualified Small Employer Health Reimbursement Arrangement, or QSEHRA, and the Individual Coverage Health Reimbursement Arrangement, or ICHRA. Both arrangements can allow employers to reimburse eligible employees for individual health insurance premiums and qualified medical expenses on

If your business carries debt—whether a line of credit, equipment loans, commercial real estate financing, or acquisition debt—you may be affected by the Section 163(j) limitation on the business interest expense deduction. Before 2018, interest on legitimate business debt was generally fully deductible. The Tax Cuts and Jobs Act capped that deduction for larger businesses and introduced a formula that limits deductible interest based on a percentage of a metric called Adjust

The Tax Cuts and Jobs Act introduced a limitation that surprises many business owners who have a large loss year: the excess business loss limitation under IRC §461(l). In plain English, this rule can stop you from using all of your business loss against other income in the current year. That does not mean the loss disappears. It means part of the deduction may be delayed and carried forward. This is one of the reasons tax planning across years matters. A loss year is not jus

Pass-through losses from an S-Corp or partnership flow through to your personal return on Schedule K-1. But a K-1 loss doesn't automatically translate into a deduction. Multiple limitation systems — including basis, at-risk, and passive activity loss rules — can block or defer that deduction, sometimes for years. Understanding how these work prevents surprises on your return and helps you plan around them. Basis Limitations In an S-Corp or partnership, your ability to deduct

If you're self-employed and paying for your own health insurance, you may be entitled to deduct 100% of your premiums without itemizing. It's one of the few above-the-line deductions that directly reduces your adjusted gross income, which can ripple through your entire return—affecting other calculations on the return, including QBI in some cases, eligibility for certain credits, and ultimately your tax bill. Many business owners either miss this entirely or set it up incorre

Starting a business often means losing money before making it. The IRS actually accounts for this. The Net Operating Loss (NOL) rules allow you to offset future profitable years with losses from less profitable ones—which is one of the reasons tax planning across years matters more than looking at any single year in isolation. What Is an NOL? A Net Operating Loss can occur when allowable deductions exceed income for the year, after the NOL rules make specific adjustments. Not

S-Corp owners often pay for business expenses out of pocket—mileage, home office, phone, supplies—and then either forget to reimburse themselves or run expenses through the S-Corp account in ways that create tax problems. An accountable plan solves this. It's not complicated, but getting it wrong costs money, and most S-Corp owners either don't have one at all or have one that doesn't actually work. Why This Matters for S-Corp Owners Specifically Unlike a sole proprietor, an

Making the S-Corp election is theoretically straightforward: file Form 2553, get confirmation, done. In practice, Form 2553 has a surprising number of failure points, and many business owners don't discover the problem until they're mid-audit or trying to prepare returns years after the fact. Here's where the election goes wrong. Missing the Filing Deadline For a calendar-year entity, the S-Corp election is generally due no more than 2 months and 15 days after the beginning o

Retirement planning is one of the few areas where the tax code is genuinely trying to help you. As a self-employed business owner, you have access to retirement vehicles that allow you to contribute significantly more than a traditional employee—and, in many cases, deduct contributions within IRS limits. The three most common options for small business owners are the SEP-IRA, the Solo 401(k), and the SIMPLE IRA. Each one fits a different situation. SEP-IRA (Simplified Employe

Closed sign Closed sign Closing a business isn't just a business decision—it's a tax event. The IRS has specific expectations for what needs to happen when you shut down operations, and skipping these steps creates problems that follow you long after the doors close. Most owners focus on the operational side and never think through the tax side until it's too late. Filing Final Returns Every entity type has a required final return process. For a sole proprietor filing on Sche

The Section 199A qualified business income deduction is now permanent. For pass-through business owners — sole proprietors, S-corps, partnerships — it's worth up to 20% of qualified business income. It's one of the most valuable deductions available to small business owners. It's also one of the most commonly miscalculated. Let's put a number on what a planning error here actually costs over time. How the Deduction Works (Briefly) QBI is the net income from a qualified trade

If you're in a partnership — or an LLC taxed as a partnership — there's a number you're supposed to be tracking every year. It's called your outside basis. Most partners have no idea what it is. And the IRS doesn't track it for you. The consequences of ignoring basis don't always show up immediately. They accumulate quietly over years, and then they surface at exactly the worst time: when you sell your interest, when you receive a large distribution, or when the partnership g

Most business owners interact with their tax professional once a year: hand over the documents, get the return filed, pay the bill. That model works fine if your tax situation is stable, simple, and doesn't change much. But for a lot of small business owners, that's not what's happening. A tax advisory retainer is a different kind of engagement — one structured around ongoing access, proactive planning, and year-round oversight rather than a single annual transaction. What It

Running an S-corp isn't just a tax strategy — it's a compliance structure. And compliance structures require maintenance. Most S-corp owners do two things consistently: run payroll and file the return. That's not enough. Here are seven things that should happen every year inside an S-corp, and why each one matters. 1. Document Your Reasonable Compensation Basis The IRS expects S-corp owners who perform services for the company to pay themselves a reasonable salary before taki

Most small business owners treat taxes like a one-time event. File the return, pay what you owe, move on. Then January hits and they're scrambling — missing records, making rushed decisions, and handing their tax preparer a mess to sort out in six weeks. The business owners who have the easiest tax seasons aren't more organized by nature. They made better decisions in May. The Window That Opens After Filing Once your return is filed, you have roughly eight months before thing

The state and local tax (SALT) deduction has been one of the most debated provisions in tax law since the TCJA capped it at $10,000 in 2018. The One Big Beautiful Bill Act raised that cap to $40,400 for 2026, with income-based phase-downs for higher earners. For small business owners — especially those in states with income tax — this changes the math on itemizing, entity structure, and pass-through entity tax elections. What Changed Under the TCJA, the SALT deduction for ind

heavy duty bulldozer heavy duty bulldozer When you buy equipment, a vehicle, or technology for your business, you generally can’t deduct the full cost in the year you purchased it. Depreciation spreads the deduction over the asset’s useful life. But Section 179 and bonus depreciation let you accelerate that deduction — sometimes taking the entire cost in year one. Knowing when to use each method is a significant tax planning lever. Section 179: Full Expensing in Year One Sect

Setting a reasonable salary for S-Corporation owners is one of the most critical tax issues these businesses face. Reasonable compensation is a recurring focus area in S-Corporation examinations because it directly affects employment tax reporting. Getting this wrong can lead to costly audits and penalties. This post breaks down what the IRS looks for, how to document your salary decisions, and why guessing a number can cause serious problems. IRS review of S-Corp salary docu

When tax season arrives, many small business owners face a crucial question: how does filing as a Schedule C sole proprietor differ from filing as an S-Corporation? Understanding these differences can save time, reduce stress, and potentially lower your tax bill. This post breaks down what changes and what stays the same at tax time when you move from Schedule C to an S-Corp. The goal is to give you clear, practical information so you can make informed decisions based on fact