Business Tax

One of the most common questions we receive from S Corporation owners is, “Why do I need to file my corporate taxes before I file my individual taxes?”

It’s important for us to first define a subchapter S Corporation (S-Corp). An S-Corp is a “pass through” entity that is generally not subject to federal or state taxes. However, New York City does have an income tax for S-Corps because the city of New York does not recognize the S-Corp status and treats the S-Corp as a regular corporation. There are several other states that also do not recognize the S-Corp status.

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I would have to say that it really depends on what kind of property you own and what you intend to do with that property. There are many levels of New York City property taxes, and they all vary by industry and use. Below, I’ve provided some basic guidelines that cover the taxes, fees, and reporting obligations.

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Recently, the Internal Revenue Service (IRS) announced the new standard mileage rates to deduct vehicle expenses for the 2015 tax year.  The latest rules impact individuals using a vehicle for business, charity, or medical and moving purposes. With the exception of the costs related to business, the standard mileage rates all stayed the same or were slightly down from 2014 due to lower gas and oil costs.

What is the the standard mileage deduction rate for 2015?

For 2015, the standard mileage rate increases to $0.575 for business miles driven, up from $0.56 in 2014 (reference: Internal Revenue Notice 2014-114). While the IRS expects fuel prices to be lower in 2015, an annual study indicated higher fixed and variable costs for operating an automobile, including depreciation, insurance, repairs, tires, and maintenance.

The rate will be $0.23 per mile for medical or moving purposes, down $0.005 from 2014, and $0.14 per mile driven in service of charitable organizations. The medical and moving expenses are based on the lower expected price of oil, while the charitable rate is set by law.

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Many taxpayers often review tax planning strategies after the New Year. Before you say goodbye to 2014, there are several tax savings strategies that you may be able to implement now. If you wait until after December 31st, it will be too late.

Harvesting investment losses to offset capital gains

Investors can reduce their taxable income by realizing capital losses. After netting capital gains against losses, taxpayers can offset up to $3,000 of ordinary income and carry-forward the remaining amount for future years. Please note that the character of the investment as long-term versus short-term will impact the way in which gains and losses are netted.

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