Forum Posts

thetaxmuse
Oct 30, 2019
In Sales Tax
As you may or may not have heard, states are implementing new changes to items that are considered sales-tax taxable in their state. Under the old rules, if you didn't have a physical presence (e.g. a retail store space, warehouse, sales people) in a state outside of your home state, you generally didn't need to worry about your sales tax obligations for out of state sales. You typically only had sales tax filing obligations in your "home" state even if you sold goods and products to other states. In Summer of 2018, that all changed with the infamous South Dakota v. Wayfair case. This case was the start the enactment of "economic nexus laws". Economic nexus laws means that each state can now enforce their state's sales tax rules and obligations on out-of-state sellers shipping goods into their state that meet the thresholds they've determined based on the amount and/or quantity of sales to that state. What does this mean for you? Well, if you have a high dollar value or quantity of sales to states outside your home state, you should be evaluating which other states you may have potential sales tax obligations. Remember, this doesn't change your sales tax obligations in your HOME state - you still have to comply with those sales tax obligations even if it doesn't meet the thresholds listed below - these threshold apply only to states in which you DON"T have a physical presence. Below are the Economic Nexus reporting thresholds by state. (Note: These laws are rapidly changing so check back periodically for updates)
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thetaxmuse
Oct 30, 2018
In Bookkeeping & Accounting
No photo😍
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thetaxmuse
Oct 05, 2018
In Personal Income Taxes
Did you know that there are so many tax saving opportunities when it comes to owning real estate? 🏡 You might have heard about the home gain exclusion where you won’t need to pay tax on any profits up to $250,000 ($500,000, if married) when you sell your home. If you own real estate investments (eg. rental properties), you may have heard about the 1031 exchange where you can avoid any current tax liability and defer gains on sales of your investment properties. Drop a note if you're interested in this topic!
How to exclude $250k/$500k from taxes on Home Sale content media
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thetaxmuse
Oct 05, 2018
In Personal Income Taxes
I've been receiving lots of baby news this year so not that it makes any sense for people to be having babies for the sake of taxes - but below are a couple tax breaks you’ll get once that little one joins our world👼🏻 So for all those hard working mamas and papas, don’t forget to make sure these child tax credits are claimed on your tax returns! 🍼 Tax credit up to $2,000 per child (under 17) - If your income is greater than $400k (or $200k for singles), the tax credit will be reduced 🍼Dependent care credit from $600 up to $1k per child - only eligible if you pay for someone to care for your child (nanny, child/day care) while you work or look for work.
Babies + Tax Deductions <3 content media
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thetaxmuse
Oct 05, 2018
In Business Taxes
The general rule is that most clothing is not tax deductible - even if it meets the "ordinary and necessary" business expense test. To be tax deductible, the clothing must be either protective clothing, uniform with customized logo/branding, or a costume that is NOT suitable for everyday wear. If you're a fashion blogger, the clothing you invest in for blog content is most likely not tax deductible since the clothing is reasonably assumed to be wearable by others (whether or not YOU actually wear it outside doesn't matter). If you create online webinars/videos, the clothing you buy to wear in front of the camera generally isn't tax deductible either (unless you're wearing some kind of "costume" or special clothing others wouldn't normally wear). Although the IRS places additional restrictions on the deductibility of clothing, you’ll be able to deduct the cost of clothing it meets the requirements mentioned above.
Can you deduct Clothing? content media
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thetaxmuse
Oct 05, 2018
In Business Taxes
Business entertainment expenses are no longer tax deductible - but there are exceptions to this rule! Even though the costs associated with entertaining clients and business associates are no longer tax deductible, entertainment expenses for the benefit of employees - such as recreational/social activities, holiday parties, summer socials, team bonding events - are still 100% tax deductible ✨Tip: When doing your bookkeeping, make sure to categorize your deductible and non-deductible entertainment expenses separately so that you get a tax deduction/write-off for the eligible entertainment expenses come tax time! Create an account for non-deductible entertainment (e.g. Business Entertainment) and another for deductible entertainment (e.g. Company/Employee Events)✨
Entertainment expenses not deductible - or is it? content media
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thetaxmuse
Oct 05, 2018
In Business Taxes
It’s becoming common practice to do giveaways and freebies to promote products. Don’t forget to track the cost of items you’re giving away as a Promotional Item expense or in a Marketing/Advertising expense account. Not only will you want to track the effectiveness of these promotional efforts, these are tax deductible expenses ✨Don’t record the item as a “Gift” - Business gifts are only tax deductible up to $25 per person per year! As long as the item given away is for promotional purposes to build out your brand and spread the word for your new product, it will be fully tax deductible and not subject to the $25 limit✨ Are you properly tracking your giveaways and freebies as Marketing/Promotional items?
How to track Giveaways & Freebies content media
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thetaxmuse
Oct 05, 2018
In et Cetera
Love coming to a space to see business owners work together, share ideas, chat about hot topics and for me, a great source of inspiration for tax topics relevant for the creative industry. Last time I joined a social working hour at KIS, the ladies were chatting about the inner workings of collaborations and affiliate marketing in the creative space. Many tax implications here 🤓 Adding this to my list of tax topics! Where do you find inspiration?
Inspiring spaces content media
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thetaxmuse
Oct 05, 2018
In Bookkeeping & Accounting
One of the most common questions I get: Is the cost of {fill in the blank} tax deductible? To answer this, you'll need to know the basics of what makes a tax deduction. ✨Like a PB&J where peanut better and jelly are BOTH a must, there are 2 basic "ingredients" in order for the expense to be tax deductible✨ 1) Ordinary - the expense must be common and accepted in your industry AND 2) Necessary - the expense must be helpful and appropriate in generating sales/income for your business 👍If the expense meets both these tests, it’s tax deductible! Note: Although that's the general rule, there are plenty of rule, restrictions and gray areas. The only way to know this is to keep your eyes/ears open, stay educated and updated - one way to do that is to keep exploring this forum!
The 2 ingredients required for a tax deduction = Ordinary + Necessary content media
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thetaxmuse
Oct 05, 2018
In Sales Tax
🛍Sales tax has been a pretty outdated system based primarily on old brick and mortar businesses..but not anymore - with more sales shifting online, it's now time for a major sales tax revamp! 💅🏻 States are scrambling to update their rules and systems in response to the recent federal ruling which gave States the authority to expand their collection of sales tax on out-of-state businesses selling in their state. It'll take time for States to sort this out on their end, so no need to panic. We're all keeping an eye out on this topic! These changes will impact you if you make sales to states outside of your own "home" state. What state do you operate your business from? What state, other than your own, do you sell most to? Leave a note below to let me know what states you'd like updates for!
Sales Tax Revamp - Still under major construction! content media
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thetaxmuse
Oct 05, 2018
In Sales Tax
Up until yesterday, States had the ability to collect sales tax only when a seller has “physical presence” or “physical operation” in that state. So, if you operate your business from CA, you would be required to collect CA sales tax from your customers on sales made in person at a physical store located in CA, and on online sales shipped to customers in CA. However, if a customer from Texas buys online and you ship that product to TX from CA, you weren't obligated to collect and remit TX sales tax since you had no physical or operational presence in that state. 📃Yesterday, the Supreme Court ruled that states can now have the ability to require eCommerce sellers to collect and remit sales tax regardless of the physical presence/operation rule ⚡️What this means is, you're probably going to need to start collecting sales tax from a lot more states AND there will be a lot more compliance work ahead⚡️ It'll take some time before the States figure out how they will to apply this new ruling, so follow this post to get updates on this!
Big changes are headed your way for online sellers content media
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thetaxmuse
Oct 05, 2018
In Business Taxes
For those lucky ones that get to mix business with pleasure, make sure your trip is primarily for business so that you can write off 100% of your transportation or airfare costs. To be primarily for business, the days you spend for business will need to be more than the personal vacation days - so you may want to strategically schedule those business meetings 📌Don’t forget the trip must be ordinary and necessary, not lavish or extravagant and make sure to keep records to substantiate the business travel expenses✨One way to prove to the IRS that your travel expenses are deductible is to make sure your business meetings or on location work projects are clearly recorded and scheduled in your calendar ✨There are different rules for traveling outside the U.S. Comment below if you’d like tax tips on overseas travel or any other travel related questions!
Travel / Mixing Business with Pleasure content media
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thetaxmuse
Oct 03, 2018
In Business Taxes
End of day meal to celebrate the Partnership/LLC/S Corp tax filing deadline🙆🏻‍♀️ Did you know that the tax deduction rules for business meals changed this year? All business meal expenses used to be 50% tax deductible. However, with the new tax laws effective 2018, business meals related to entertainment are no longer tax deductible.
Business Meals content media
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thetaxmuse
Oct 03, 2018
In Business Taxes
Love checking out new office work spaces and admiring brand new furnishings 😍 Did you know that big items you purchase for your business and are used for more than 1 year - including equipment, furniture and fixtures - are considered “assets”? This means these purchases should be “capitalized” and are generally not deductible in the year of purchase (they are depreciated/deducted over a fixed number of years instead). 💡For individual items than $2,500, there’s a tax election you can make to deduct the cost immediately, rather than having to treat the item as an “asset” ✨Bookkeeping Tip: If you’re often purchasing items used in your business, create a separate account to track purchases that are individually less than $2,500. This will help you at tax time when figuring out what you can deduct immediately vs what you need to report as an “asset”✨ 🙋🏻‍♀️Comment below or let me know if you’re interested in how to make the tax election - will provide more details on that when we get closer to tax time!
Office Spaces / Furniture / Equipment content media
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thetaxmuse

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