The Texas Comptroller of Public Accounts has announced that taxable entities will no longer use the federal Internal Revenue Code as it existed as of January 1, 2007 as a starting point to compute Texas franchise tax from amounts taken from federal tax returns. Beginning with the 2026 franchise tax report (due in 2027), Texas…
Internal Revenue Code Section 6050I generally imposes reporting requirements upon any person who is engaged in a trade or business and, in the course of such trade or business, receives more than $10,000 in cash in one transaction or two or more related transactions. These transactions are reported on IRS Form 8300, which collects identifying…
The Limited Liability Company (or LLC) is a popular form of organization for new businesses in the United States. LLCs generally provide the same personal liability protection as a corporation, but without the additional layer of taxation or burensome administrative requirements. These requirements, commonly referred to collectively as “the corporate formalities,” generally include naming a…
Equity based compensation such as options or restricted stock has grown tremendously in popularity in recent years. For startups and small businesses, equity can be a valuable and effective means of compensating key employees (and incentivizing retention) during early growth periods when cash flow is tight. We are frequently asked by clients to help determine…
At the end of 2020, Congress passed a new law that provides for additional relief related to the coronavirus (COVID-19) pandemic. This law, the Consolidated Appropriations Act, 2021 (CAA, 2021), includes a second draw of Paycheck Protection Program (PPP) loans (PPP Second Draw Loans). It also allows businesses to deduct ordinary and necessary expenses paid…
Think again. On December 11, 2020, the US Congress passed the Corporate Transparency Act by a veto-proof majority in both houses. The Act prohibits the formation of so-called “anonymous” companies by requiring corporations and limited liability companies to disclose their true owners (by name, date of birth, and identification number) to the Department of the…
This is a supplement to our post from last week. This installment summarizes changes that will affect business taxpayers. If you missed the post that describes changes that affect individual taxpayers, then you can find it here. By now, you’ve likely heard that major changes are coming to the tax code in 2018. As…
New veteran-owned businesses that meet certain criteria are entitled to an exemption from the franchise tax for up to five years after formation. Texas calls its tax on business revenue a “franchise tax.” The Texas franchise tax is a privilege tax imposed on each taxable entity formed or organized in Texas or organized out of…
Many companies book substantial development expenses either in early years or on an ongoing basis that qualify as Research Expenditures for purposes of the Code Section 41 credit for increasing research activities (often called the “Research Credit” or the “R&D Tax Credit”). The credit, which became permanent in 2015 after nearly thirty years of temporary…
With a new tax year starting in just a few weeks, now is the time to consider filing elections that will take effect for 2016 and beyond. One such measure with an early deadline is the election to be treated as a Sub-chapter S Corporation. The S Corp election may offer significant tax advantages over…
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