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Simple Options for Retirement Savings Plans that can Benefit your Small Business
Simple Options for Retirement Savings Plans that can Benefit your Small Business 1275 750 smolinlupinco

If you’re considering creating a retirement plan for yourself and your employees but you’re concerned about the cost and administrative hurdles involved, take heart: there are some good options available to you. 

In this article, we’ll explore two types of plans that small business owners can use to get the ball rolling with retirement: Simplified Employee Penson (SEP) and Savings Incentive Match Plan for Employees (Simple).

A SEP is designed to be a viable alternative to “qualified” retirement plans and is geared toward small businesses. The relative ease of administration with this plan and your decision as an employer on whether or not to make annual contributions are two features of the plan that can be appealing to business owners. 

SEP setup can be easy for business owners

If your business doesn’t already have a qualified retirement plan, you can set up a SEP by using the IRS model SEP, Form 5305-SEP. When you adopt and implement this model SEP, which isn’t required to be filed with the IRS, you will satisfy the SEP requirements. 

This means that as the employer, you’ll get a current income tax deduction for the contributions you make on behalf of your employees. Employees won’t be taxed when contributions are made but will be taxed in the future when they receive distributions, typically at retirement. 

Depending on your requirements, an individually designed SEP might be a better choice for you than the model SEP.

When you set up a SEP for yourself and your employees, you’ll make deductible contributions to every employee’s IRA, known as a SEP-IRA, which are required to be approved by the IRS. The maximum amount of deductible contributions one can make to an employee’s SEP-IRA (and that the employee can exclude from income) is the lesser of either 25% of compensation or $66,000 for 2023. 

The deduction for your contributions to your employee’s SEP-IRA isn’t limited by the deduction ceiling that’s applicable to an individual’s contribution to a regular IRA. Your employees have control over their individual IRAs and IRA investments, on which the earnings are tax-free.

There are additional requirements that must be met in order to be eligible to set up a SEP: 

  • All regular employees must elect to participate in the program 
  • Contributions must not discriminate in favor of highly compensated employees

The requirements for creating a SEP are minor, though, compared to the administrative and bookkeeping burdens that come with traditional qualified pension and profit-sharing plans.

The detailed records that traditional plans are required to maintain in order to comply with complex nondiscrimination regulations are not not necessary with a SEP. Employers aren’t required to file annual reports with the IRS (which, in the case of a pension plan, could require the services of an actuary). Instead, all required recordkeeping can be handled by a trustee of the SEO-IRAs, usually a mutual fund or a bank.

Consider SIMPLE plans

Another viable option for businesses with fewer than 100 employees is a SIMPLE plan. With these plans, a “SIMPLE IRA” is established for each eligible employee. The employer makes matching contributions based on the contributions chosen by participating employees under a qualified salary reduction arrangement.

Like a SEP, a SIMPLE plan also comes with much less stringent requirements than traditional qualified retirement plans. 

Another option is for an employer to adopt a “simple” 401(k) plan, with features similar to a SIMPLE pan, which creates an automatic passage over the otherwise complex nondiscrimination test for 401(k) plans.

For 2023, SIMPLE deferrals are allowed up to $15,500 plus an additional $3,500 for catch-up contributions available to employees aged 50 and older.

Questions about retirement savings? Smolin can help.

If you’re looking for manageable options to help create retirement plans for yourself of your employees, contact Smolin today. Our knowledgeable team of accounts can help you decide which plan works best for you and walk you through the process.

New and Improved Accounting Rules for Common Control Leases
New and Improved Accounting Rules for Common Control Leases 1275 750 smolinlupinco

On March 27, 2023, the Financial Accounting Standards Board (FASB) published narrowly drawn amendments to the lease accounting rules. This updated guidance clarifies issues pertaining to rental agreements between businesses with the same owner.

Written vs. verbal leases

Accounting Standards Update (ASU) No. 2023-01, Leases (Topic 842) Common Control Arrangements, explains how related business entities controlled by the same owner determine whether a lease exists. 

This guidance settles questions about how to approach verbal common control leases and whether legal counsel is required to determine the terms and conditions of a lease. Specifically, it gives an optional practical expedient to private businesses and not-for-profit organizations that aren’t conduit bond obligors. (A practical expedient is an accounting workaround that enables a business to use a more straightforward route to end up with the same outcome.)

The practical expedient is only applicable for written leases. Under the updated guidance, a business electing to use the practical expedient must follow the written terms and conditions of a common control arrangement to determine whether a lease exists and how to account for it. 

With a verbal lease agreement, as is typically the case between private entities under common control, the company must document the existing unwritten terms of the agreement before applying these lease accounting rules.

The lessee isn’t required to determine whether written terms and conditions are enforceable when applying the practical expedient. Additionally, businesses can use the practical expedient on an arrangement-by-arrangement basis.

Leasehold improvements

The accounting rules for certain leasehold improvements have also changed for public and private organizations under ASU 2023-01. Examples of leasehold improvements include:

  • Installing carpet 
  • Painting
  • Building out the space for the lessee’s needs

For example, a salon might install new plumbing fixtures and sinks, a chemical manufacturer could require ventilation for its production process, and a neighborhood restaurant may create a rooftop garden to attract new customers.

Under these amendments, lessees must amortize leasehold improvements over the improvements’ useful lives to the common control group, regardless of lease terms.

When the lessee no longer controls the underlying asset, the transfer of those improvements must be accounted for with either net asset or equity. The improvements will remain subject to the impairment requirements of Accounting Standards Codification (ASC) Topic 360, Property, Plant and Equipment.

Guidance for implementation

ASU No. 2023-01 is an amendment to ASC Topic 842, Leases, which was issued in 2016. It went into effect for public entities in 2019 and for private entities in 2022. This standard requires the full effect of entities’ long-term lease obligations to be reported on the balance sheet.

Starting on December 15, 2023, the updated regulations will be implemented for this and subsequent fiscal years. If a company decides to adopt these modifications during an interim period, it must be done at the beginning of the fiscal year that includes that interim period. However, early adoption is allowed for both interim and financial statements that have yet to be issued. 

If your business opts to adopt ASU 2023-01 concurrently with the adoption of Topic 842, you should use the same transition approach as this standard. If your company chooses to adopt these rules in a subsequent period, it must do this prospectively or retrospectively.

Need help understanding these rules? Get in touch. 

If your company rents from a related party, we can help you report these arrangements in alignment with this updated guidance. The accounting professionals at Smolin Lupin know how to determine whether a common control lease exists and how to report improvements and other fixes made to rented property.

If You Inherit Property, You Can Benefit From a “Stepped-Up Basis”
If You Inherit Property, You Can Benefit From a “Stepped-Up Basis” 1275 750 smolinlupinco

One of the most common questions for people planning their estates or inheriting assets is: What is the “cost” (or “basis”) a person gets in property that is inherited from someone else? This vital area is often overlooked when families start planning for the future.

According to the fair market value basis rules (otherwise known as the “step-up” and “step-down” rules), an heir can receive a basis in inherited assets equal to their date-of-death value. For example, if your uncle bought shares in an oil stock in 1942 for $500 and the stock was worth $5 million at the time of his death, the basis would be stepped up to $5 million for your uncle’s heirs, which means that the gain on the stock would escape income taxation forever.

Fair market value basis rules apply to any inherited property that can be included in the gross estate of the deceased individual, whether or not a federal estate tax return was filed. The rules apply even to property inherited from foreign individuals not subject to U.S. estate tax. 

Fair market value basis rules also apply to the inherited portion of the property jointly owned by the inheriting taxpayer and the deceased, but not to the portion of the jointly held property that the inheriting taxpayer owned prior to their inheritance. They don’t apply to reinvestments of estate assets on the part of fiduciaries. 

Lifetime gifting

It’s important to understand the fair market value basis rules so that you can avoid paying more tax than you’re legally required to.

For example, in the previous scenario, if your uncle instead decided to make a gift of the stock during his lifetime (rather than passing it down to his heirs when he died), the “step-up” in basis (from $500 to $5 million) would be lost.

Property acquired as a gift that has increased in value is subject to the “carryover” basis rules. This means that the person who received the gift takes the same basis the donor had in it ($500 in this example), plus a portion of any gift tax the donor pays on the gift. 

If someone dies owning property that has declined in value, a “step-down” occurs. In this case, the basis is lowered to the date-of-death value. Sound financial planning can help avoid this loss of basis, and it’s important to note that giving away the property before death won’t preserve the basis. 

Why is that? Because when a property that has gone down in value is given as a gift, the person who receives the gift must use the date of gift value as the basis for determining their loss on a later sale. An excellent strategy for handling a property that has declined in value is for the owner to sell it before death so they may enjoy the tax benefits of the loss. 

Have questions? Smolin can help

We’ve covered the basic rules here, but other rules and limits may apply. For example, in certain cases, a deceased person’s executor may be able to make an alternate valuation election, and gifts made just before a person died may be included in the gross estate for tax purposes. 

If you’re wondering how you can benefit from a “stepped-up basis” or need guidance with planning your estate, contact the knowledgeable professionals at Smolin. We’re ready to guide you through complicated tax laws to ensure you miss out on possible savings for your estate or inheritance.

Tax Rules for Donating Artwork to Charity
Tax Rules for Donating Artwork to Charity 1275 750 smolinlupinco

If you’re an art collector, you may be curious about the tax breaks that come with donating a work of art to charity. You should be aware that many different tax rules come into play when making these kinds of contributions.

Basic rules

A deduction for a donation of art can be reduced if the charity you donated to uses the art for a purpose or function that’s unrelated to the reason for its qualification as a tax-exempt organization. The reduction will be equal to the amount of capital gain you would have received if you sold the property instead of donating it.

Example: You bought a sculpture six years ago for $10,000, and it’s now worth $20,000. You contribute it to a charitable foundation. Your deduction is limited to $10,000 because the foundation’s use of the sculpture is unrelated to its charitable function, and you would have had a $10,000 long-term capital gain if you had sold it.

But what if you donated the sculpture to an art museum? In this instance, your deduction would be $20,000.

Substantiation requirements

There are substantiation rules that apply when you donate a work of art to charity. First, if you claim a deduction of less than $250, you’re required to obtain and keep a receipt from the charity, and you must keep records for any item you contributed.

If you claim a deduction of at least $250, but not more than $500, you’re required to obtain an acknowledgment of your contribution from the group you donated it to. The acknowledgment must state whether the organization gave you any goods or services in exchange for your donation and include a description with a good-faith estimate of the value. 

If you claim a deduction of more than $500, but less than $5,000, you’ll need to maintain records that include information about how and when you obtained the artwork and its cost basis in addition to getting an acknowledgment. You are also required to complete an IRS form and attach it to your tax return.

If the claimed value of the property you donated is more than $5,000, you must have an appraisal of the property in addition to the acknowledgment. Your appraisal must be completed by a qualified appraiser no more than 60 days before the date of the contribution and meet other requirements. You must include information about these donations on the IRS form you send with your tax return. 

If the total of your deduction is more than $20,000, you must attach a copy of the signed appraisal, and the IRS may require you to include a photograph. If the item has been appraised at $50,000 or more, you can request that the IRS issue a “Statement of Value,” which can be used to substantiate the value of your donation.

Percentage limitations

Additionally, your tax deduction may be limited to 20%, 30%, 50%, or 60% of your contribution base, which is typically your adjusted gross income. Percentages vary depending on the year in which the contribution is made, the type of organization, and whether the deduction was required to be reduced based on the unrelated use rule described above. The amount not deductible because of a ceiling may be deductible in the next year under carryover rules.

Partial interest gifts 

Sometimes donors make gifts of partial interests in artwork. For instance, a donor may contribute a 50% interest in a piece of artwork to a museum, with the agreement that the museum will exhibit it for six months of the year, and the donor will retain possession of it for the following six months. There are special requirements that apply to these donation agreements.

Make sure you get the most from your donations with Smolin

If you’re unsure of how to claim deductions for artwork you may have donated this tax year, or if you have further questions about how these deductions work, contact us for more information. 

Give Your Trusts New Life by Decanting Them
Give Your Trusts New Life by Decanting Them 1275 750 smolinlupinco

Creating flexibility within your estate plan using different strategies is worth considering when planning for the future. Because life circumstances can change over time (especially those involving tax laws and family situations), it’s important to use techniques to provide greater flexibility for your trustees. One such method is decanting a trust.

What is decanting?

Decanting usually refers to pouring wine or another liquid from one container into another. In estate planning terms, it means “pouring” assets from one trust into another with modified terms. 

The idea behind decanting is that if a trustee has discretionary power to distribute trust assets among that trust’s beneficiaries, they also have the ability to distribute those assets into another trust.

Depending on the language of the trust and the provisions of applicable state law, decanting may enable the trustee to:

  • Change the number of trustees or alter their powers
  • Add or enhance spendthrift language to protect the trust assets from creditors’ claims
  • Move funds to a special needs trust for a disabled beneficiary
  • Correct errors or clarify trust language
  • Move the trust to a state with more favorable tax or asset protection laws
  • Take advantage of new tax laws
  • Remove beneficiaries

In contrast to assets transferred at death, assets transferred to a trust to receive a stepped-up basis, so they can subject beneficiaries to capital gains tax on any appreciation in value. A potential solution to this problem is decanting.

Decanting can authorize a trustee to confer a general power of appointment over the assets to the trust’s grantor, causing the assets to be included in the grantor’s estate, and therefore, eligible for a stepped-up basis.

Stay compliant with your state’s laws

Many states have decanting statutes, and in some states, decanting is authorized by common law. No matter the situation, it’s essential to understand your state’s requirements. For example, in certain states, the trustee is required to notify the beneficiaries or even obtain their consent to decant a trust. Even if decanting is permitted, there may be limitations on its uses. 

Some states, for example, bar the use of decanting to remove beneficiaries or add a power of appointment, and most states won’t allow the addition of a new beneficiary. If your state doesn’t allow decanting, or if its decanting laws don’t allow you to achieve your goals, it may be possible to move the trust to a state whose laws are more aligned with your needs.

Be aware of tax implications

One of the risks associated with decanting is uncertainty over its tax implications. 

For example, a beneficiary’s interest is reduced. Have they made a taxable gift? Does it depend on whether the beneficiary has consented to decanting? If the trust language allows decanting, is the trust required to be treated as a grantor trust? Does such language jeopardize the trust’s eligibility for marital deduction? Does the distribution of assets from one trust to another trigger capital gains or other income tax consequences to the trust or its beneficiaries?

Create more flexibility in your trust with Smolin

If you want to create more flexibility with an irrevocable trust or have any questions about the tax implications of your situation, contact us for more information. 

Understanding Deferred Taxes
Understanding Deferred Taxes 1275 750 smolinlupinco

Navigating deferred taxes can be a confusing process, and the accounting rules for reporting deferred taxes can sometimes seem arbitrary and nonsensical when viewed through the lens of real-world economics. Here’s a brief article to help simplify this complex subject.

What are deferred taxes?

Companies are required to pay income tax on taxable income as defined by the IRS. On their Generally Accepted Accounting Principles (GAAP) financial statements, however, companies record income tax expense based on accounting “pretax net income.” 

In any particular year, your taxable income (for federal income tax purposes) and pretax income (as reported on a GAAP income statement) may differ substantially. Depreciation expense is typically the reason for this temporary difference.

The IRS allows companies to use accelerated depreciation methods to lower taxes that are paid in the early years of an asset’s useful life. Many companies may also choose to claim Section 179 deductions and bonus depreciation for the year an asset is put into service. 

An alternative route that many companies take for GAAP reporting purposes is to use straight-line depreciation. At the beginning of an asset’s useful life, this typically causes taxable income to be dramatically lower than GAAP pretax income. That said, as the asset gets older, this temporary depreciation expense is reversed. 

Understanding differing depreciation methods

Using differing depreciation methods for tax and accounting purposes causes a company to report deferred tax liabilities. In simple terms, this means that by claiming higher depreciation expense for tax purposes than for accounting purposes, the company has momentarily reduced its tax bill but must make up the difference in later tax years. 

Deferred tax assets can come from other sources like operation loss carryforwards, tax credit carryforwards, and capital loss carryforwards.

How should deferred taxes be reported on financials?

When a company’s pretax and taxable incomes differ, it is required to record deferred taxes on its balance sheet. 

This can go one of two ways. If a company pays the IRS more tax than an income statement reflects, it records a deferred tax asset for the future benefit the company is entitled to receive. If the opposite occurs and the company pays less tax, it must record a deferred tax for the additional amount it will owe in the future.

Like other liabilities and assets, deferred taxes are classified as either current or long-term. 

No matter their classification, though, deferred taxes are recorded at their cash value (that is, with no consideration of the time value of money). Deferred taxes are also based on current income tax rates. The company can revise its balance sheet, in which case change flows through to the income statement if tax rates change.

Unlike deferred tax liabilities which are recorded at their full amount, deferred tax assets are offset by a valuation allowance that reflects the potential of an asset expiring before the company can utilize it. Determining the amount of deferred tax valuation allowance to log is at the discretion of management is highly subjective. It’s important to note that all changes to this allowance will flow through to the company’s income statement.

Today, or later on down the line?

For financial statement users, it’s critical not to lose sight of deferred taxes. A company with significant deferred tax assets may be able to reduce its tax bill in the future and save much-needed cash on hand by claiming deferred tax breaks. 

On the other hand, a company with considerable deferred tax liabilities will have already taken advantage of tax breaks and may need additional cash on hand to pay the IRS in future tax years.

Questions? Smolin can help 

Still unsure of how deferred taxes might affect your business? If you would like to discuss any of these issues or gain a better understanding of tax rules for businesses, our CPAs can help. Contact us to get started. 

NJBIZ Leaders in Finance Paul Fried

Paul Fried Selected as an NJBIZ Leader in Finance
Paul Fried Selected as an NJBIZ Leader in Finance 1200 628 smolinlupinco

Smolin is pleased to announce that Paul Fried, CEO-elect, has been selected as an NJBIZ Leader in Finance. NJBIZ Leaders in Finance recognizes financial executives whose passion and energy help drive their company’s success. Honorees are selected ​​because of their professional and civic engagement and their innovative contributions to their fields. They will be recognized at a ceremony on April 25, 2023. 

“Paul has been an instrumental team member at Smolin since he joined our family” shares Ted Dudek, Managing Member of the Firm. “His work for clients over the years has been impactful at all levels. His contributions to both Smolin and our community make him well-deserving of this honor.”

As a New Jersey Certified Public Accountant with over 40 years of industry experience, Fried has a long history at Smolin. He works with clients in the construction, real estate, manufacturing, distribution, and professional services industries and advises on tax matters, forensic accounting, and mergers and acquisitions.  

Paul currently serves on Smolin’s Executive, Merger and Acquisition, Finance, Strategic Planning, and Wealth Management committees. Fried is also a member of the American Institute of Certified Public Accountants and the New Jersey Society of Certified Public Accounts. 

About NJBIZ Leaders in Finance awards

NJBIZ Leaders in Finance is conferred by NJBIZ, a publication of Bridge Tower Media. A description of the selection methodology is available here. 

Following an open nomination period, honorees are chosen by a panel of independent judges with experience in the financial field. The award categories include banking, corporate, investment, and professional. Selections are based on the nominees’ involvement in their industries and communities, their professional achievements, and innovative ideas. 

About Smolin 

Since 1947, Smolin has been committed to providing industry-leading professional financial and accounting services uniquely designed to meet the needs of each and every client. Smolin’s attention to the needs of each client has helped them become the successful and respected

state income tax nexus

State Income Tax Nexus: What You Need to Know
State Income Tax Nexus: What You Need to Know 956 562 smolinlupinco

Supreme Court precedent once prohibited states from collecting sales tax from out-of-state businesses lacking an in-state physical presence, no matter how much the company made in sales—but this has recently changed. 

With the United States Supreme Court decision in South Dakota v. Wayfair, Inc., individuals and businesses that sell products out of state are liable to pay the states where they sell their products taxes if they reach a certain income threshold for their sales.

If you are selling products out of state, you may be liable to pay taxes on those sales even if the amount of money you received for them is relatively small. 

Which activities of an out-of-state seller constitute Income Tax Nexus? 

There is some amount of protection for those who sell products out of state, as federal law protects those who sell physical items out of state from taxation if they meet the following criteria: 

  1. The only activity within the state is soliciting sales of tangible personal property 
  2. Sales are approved by the home office outside of the customer’s state
  3. The tangible personal property is shipped to the customer from outside of the state

Need assistance? Contact us. 

If you’re unsure whether or not you need to pay taxes on your out-of-state sales, Smolin can help. Let us walk you through the process so you don’t have to second guess anything this tax season.

Smolin Lupin 75th Anniversary

Smolin, Lupin & Co., LLC Celebrates 75 Years of Excellence
Smolin, Lupin & Co., LLC Celebrates 75 Years of Excellence 1600 837 smolinlupinco

Smolin Lupin, an Independent Member of the BDO Alliance USA and one of the NJBIZ Top 20 Public Accounting Firms in New Jersey, is celebrating 75 years of excellent accounting services helping clients achieve success. 

Since 1947, Smolin Lupin has been dedicated to developing long-lasting client relationships by providing professional financial and accounting services uniquely designed to meet the needs of each and every client. 

Smolin is known for helping clients and businesses grow through quality tax, accounting, and advisory services. Smolin helps clients meet their financial goals, and their innovative tax and accounting services have helped countless businesses grow and thrive in the always-changing market. 

“We’re proud of the past 75 years of Smolin, and we thank our incredible team, loyal clients, and the adaptability of the business as a whole,” says Smolin Member of the Firm and member of Smolin’s Executive Committee Henry Rinder.

Smolin’s roots take them back to Newark, New Jersey, servicing a core clientele of private, closely held businesses and professional firms. They helped grow what used to be small businesses and start-ups into medium-sized firms and large corporations. 

As they helped their clients grow, they continued to grow themselves, evolving into a full-service accounting firm with offices in Fairfield, Red Bank and Spring Lake Heights, New Jersey, and Juno Beach, Florida.

With their continued growth—and exceptional personnel—Smolin now offers a complete menu of traditional services from tax planning and preparation, audits and assurance, to specialized services, which include litigation support, forensic accounting, business consulting, estate planning, business valuations and much more. They’ve expanded to serve clients in various industries including (but not limited to) professional services, healthcare, hospitality, non-profit organizations, real estate development, and technology. 

But one thing has remained constant in Smolin’s 75 years of business: their commitment to offering clients the knowledge and expertise to help their businesses grow and thrive. Through their many years of experience and active service with their clients, Smolin’s team brings expertise to advise clients on key issues regarding their respective industries. 

“I’m excited about the future of our organization, and seeing the next levels of what’s to come—and how the future will help Smolin grow into even higher levels of excellence,” says Ted Dudek, Smolin President and Managing Member of the Firm. 

Which Vehicles Are the Most Tax-Friendly for Business Owners?
Which Vehicles Are the Most Tax-Friendly for Business Owners? 850 500 smolinlupinco

If your business is preparing to replace a vehicle or buy a new one, you should know that a heavy SUV might provide a more substantial tax break this year than what you’d receive from a smaller vehicle. 

The reason? Larger business vehicles are depreciated differently on your tax returns than smaller ones. 

Depreciation guidelines

Compared to other depreciable assets, business vehicles are subject to more restrictive tax depreciation rules. 

Depreciation deductions are automatically capped under “luxury auto” rules. If a taxpayer decides to use Section 179 of the Internal Revenue Code to expense all or part of the cost of a vehicle, these caps can apply here as well, allowing an asset to be written off in the year it’s placed into service. Included in these rules are smaller trucks and vans built on truck chassis. 

For most vehicles that are subject to these caps and begin service in 2023, the expensing deductions or maximum depreciation are as follows:

  • First tax year in recovery period – $22,200
  • Second tax year – $19,500
  • Third tax year – $11,700
  • Every subsequent year – $9,960

Typically, this extends the number of years it takes to depreciate the business vehicle completely. 

Caps on deductions

Caps on expensing deductions and annual depreciation for passenger vehicles don’t apply to trucks or vans that weigh more than 6,000 pounds. This rule also includes large SUVs, which can sometimes cost over $50,000, so from a tax timing perspective, you may be better off replacing your business vehicle with a heavy SUV to avoid the restrictions on smaller cars.

In most instances, you’ll have the ability to write off a substantive amount of the cost of a heavy SUV that’s used for business purposes by taking advantage of the bonus and regular depreciation beginning from the year you put the vehicle into service. Bonus depreciation is currently available at 80% but will be reduced to zero over the coming years.

If you opt to expense all or part of the cost of a heavy SUV using Section 179, it’s essential to be aware that as of 2023, an inflation-adjusted limit of $28,900 (up from $27,000 in 2022) applies separately from the caps listed above. 

Please note that for all assets you elect to expense in a year, there’s an aggregate dollar limit that applies. Once you’ve completed the expensing election, you’ll need to depreciate the rest of the cost under the standard rules without regard to annual caps. 

It’s also important to be aware that the tax benefits listed above are subject to adjustment for non-business use. Additionally, the vehicle won’t be eligible for expensing if the business use of the SUV doesn’t exceed 50% of total use, meaning it would be required to be depreciated on a straight-line method over a period of six tax years.  

Trust your tax questions to Smolin

If you have questions or would like assistance with your tax return, the CPAs at Smolin can help. Contact us for more information about how to get the most tax write-offs from your company vehicle this tax season.

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