Posted by sueharke on 11/1/13 10:53am Msg #490842
IRS rule that may affect you.
Anyone have a small business on this forum (silly question)? The according to the IRS under the new repair regs, taxpayer's need to have accounting procedures in place by 1/1/2014 if they want to take advantage of the de minimis safe harbor election.
To do so, just get a binder write some policies for your business. Here is a sample to meet the de minimis requirement. I didn't write it, but modified a good one I found elsewhere online. The same may be said for your credit limit policy for how large each companies A/R is before not doing any signing for that respective company/person.
Sample Procedure for Business Owners: It is the accounting procedure of {Name of Business} to expense, for book purposes, amounts paid for units of property with a useful life of 12 months or less; or a cost less than the amount specified under Income Tax Regulation 1.263(a)-1(f), currently $500. It is the accounting procedure of {Name of Business} to expense all incidental materials and supplies. We expense all non-incidental materials and supplies that are less than the amount specified under Income Tax Regulation 1.162-3(c), currently $200.
| Reply by Sha/CA on 11/1/13 11:24am Msg #490855
Organization takes a lot of time! Thank you, Sue. n/m
| Reply by MW/VA on 11/1/13 2:44pm Msg #490908
Ok, Sue. What is "safe harbor election". Is that about
taking the total cost of something like a computer in the year it was purchased? I've taken tax courses, too, but have no idea what you're referring to.
| Reply by sueharke on 11/1/13 4:59pm Msg #490942
Re: Ok, Sue. What is "safe harbor election". Is that about
Definition of 'Safe Harbor' 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated.
2. An accounting method that avoids legal or tax regulations and allows for a simpler method (usually) of determining a tax consequence than those methods described by the precise language of the tax code. (In other words, written in English, not tax law geek.)
A new example for 2013 is the options for the home office deduction. You can take $5 per sq ft up to 300 feet or $1,500. The other choice is to use the current method and hope the IRS does not agree and audits the deduction.
Also, taking the mileage deduction allowed by the IRS is another example.
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