| Research and Experimental Costs in a Business |
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| Frequently, a business incurs costs for activities that are intended to provide information to help eliminate uncertainty about the development of a new product or the improvement of an existing product. Whether costs qualify as research and development costs depends exclusively on the nature of the activity to which the costs relate, not to the nature of the product being developed or to the level of technological advancement. More... |
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| Drilling and Exploration Costs |
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| The costs of developing oil, gas, or geothermal wells include wages, fuel, repairs, hauling, and supplies incident to and necessary for the preparation of the wells. A taxpayer who is developing these wells in the United States has the choice of treating the costs as capital expenditures and recovering them through depreciation or depletion or deducting the costs as current business expenses. If the costs of determining the existence, location, extent, or quality of any mineral deposit lead to the development of a mine, they are usually treated as capital expenditures and recovered through depletion as the mineral is removed from the ground. However, the taxpayer can choose to deduct exploration costs in the United States paid or incurred before the development stage began. This rule does not apply to oil, gas, or geothermal wells.
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| Exclusion of Meals Furnished by an Employer from Gross Income |
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| In general, the value of meals provided by or on behalf of an employer to an employee, the employee's spouse, or his or her dependents is not included in the employee's gross income if two conditions are met. First, the meals must be furnished on the premises of the employer, and second, the meals must be furnished for the convenience of the employer. The exclusion only applies to meals furnished by an employer and not to cash reimbursements for meals. More... |
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| Partnership Tax Year |
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| Generally, a partnership is required to use the same tax year as a majority of its owners. If one or more of the partners having the same tax year owns a majority interest in the business, the partnership must use the tax year of those partners. A majority interest is defined as an interest in more than half of the partnership's profits and capital. When the owners are individuals, their tax year is usually the calendar year. More... |
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| Employer-Provided Child Care Credit |
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| In order to encourage businesses to provide child care for their employees, Congress has recently created a tax incentive for those employers who make certain qualified child care expenditures. The amount of the credit allowable in a tax year is the sum of 25 percent of qualified child care expenditures plus 10 percent of qualified resources and referral expenditures. The credit is limited to a maximum of $150,000 for any tax year. More... |
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