DrillBits – Educational TidBits

If you’re a business owner with children, you may be missing out on a valuable—and IRS-approved—opportunity to shift taxable income to a lower tax bracket. By employing your child in your business, you can reduce your overall tax liability and teach them the value of earning money at the same time. Why It Works: Two…

Ah, the joys of combining business and pleasure—the ultimate two-for-one deal, right? Well, not exactly. While you can enjoy the benefits of mixing work with fun, it’s important to understand how the IRS distinguishes between business and personal travel. With some planning and recordkeeping, you can take advantage of valuable tax deductions without stepping outside…

For dental professionals considering a career shift, the choice between being an employee or a business owner comes with significant tax implications. While owning a practice or business can offer greater tax deductions, retirement savings opportunities, and financial flexibility, it also comes with additional responsibilities like self-employment taxes and operational costs. Understanding the tax advantages—such…

Real estate can be a powerful tool for building wealth while offering unique tax advantages. From depreciation deductions to rental income offsets, investing in rental properties can help reduce your tax burden and improve cash flow. However, the rules around real estate taxation can be complex, with depreciation schedules, passive loss limitations, and financing strategies…

When it comes to managing your business’s tax liability, understanding the difference between deductions and credits is key. While both can lower your tax bill, they work in distinct ways. Deductions reduce your taxable income, while credits offer a dollar-for-dollar reduction in taxes owed. However, the interplay between the two can sometimes limit the overall…

Dental embezzlement is a serious problem that affects thousands of practices across the United States and Canada each year. While it’s easy to assume that embezzlement is a rare occurrence, the reality is that many practice owners are unaware of the risks and signs, allowing the theft to continue unchecked. In fact, it’s estimated that…

Properly classifying workers as either independent contractors (1099) or employees (W-2) is a critical decision for businesses. While paying a worker as a contractor may seem easier, misclassification can lead to audits, penalties, and compliance issues with the IRS and state agencies. Employers often prefer 1099 workers to reduce payroll costs, while workers may favor…

When using a vehicle for business purposes, understanding the tax implications and deduction options is crucial. Whether the vehicle is personally owned or owned by the business, the IRS provides guidelines for deducting expenses, including mileage reimbursement and actual costs. However, vehicle tax rules are complex and frequently updated, making proper documentation essential. This article…

Starting a business is an exciting but complex endeavor, requiring careful planning and attention to legal and financial details. From choosing the right business structure to managing taxes and accounting, understanding the key steps can set you up for long-term success. This guide outlines the essential considerations for entity registration, financial management, and tax obligations…