Various Non-Taxable Gift Options

Sometimes using your own money and providing for others may cause to you pay taxes.  The IRS has placed limits on the amount of money you can outright gift to someone else before you may be liable to pay taxes on the gifted monies.  In this article, we will discuss a few ways in which your gifts to others may not be subject to taxes.

Offering Group-Term Life Insurance

There are many benefits that employers may offer their employees.  One benefit having advantages for both employers and employees is a group-term life insurance policy.
Some advantages that an employer-sponsored group-term life insurance plan may offer include:

Paying Employees for Travel Time

Do your employees spend time traveling during the normal work day?  Time spent traveling for business purposes is a business expense that your employees may be compensated for.  However, not all time spent traveling is reimbursable.  The time spent traveling to and from home to the workplace is considered personal commuting time which is not required to be reimbursed.  In this article we will take a look at different situations in which your employees may be compensated for.

Limitations on S-Corporation Losses and Deductions

Generally, S-corporations are not subject to income taxes.  Rather, the income and/or losses incurred each year are passed-through to the S-Corporation’s shareholder(s) on a pro rata basis, and reported on the shareholder(s) Individual Income Tax return.  One tax matter to keep in mind for S-Corporation shareholders is the possible limitations on deductibility of corporate losses flowing-through to the individual.  We will discuss some of the potential issues that may limit the amount of deductible losses.

Compensation of S-Corporation Shareholders

One benefit of S-corporations over other entity types is the employment tax advantages that may be derived when shareholders receive a portion of the profits in the form of a distribution (dividends) rather than as compensation.  The origin of this benefit began with Revenue Ruling 59-221, which stated that a shareholder’s share of undistributed taxable income does not constitute net earnings from self-employment.


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