The Railsback Group, P.C.

05/19/2026

Certain “small businesses” may qualify for several valuable tax breaks. But different tax provisions use different size tests.

For instance, a gross receipts test is used to determine eligibility for cash accounting, simplified inventory rules, the completed contract method, relief from UNICAP requirements and exemption from the business interest deduction limitation. This threshold is adjusted for inflation. For 2026, your business may be eligible if its average annual gross receipts for the prior three-year period were $32 million or less.

Contact us to help evaluate your eligibility for these and other tax-saving opportunities based on your business’s structure and operations.

05/04/2026

Does your business own commercial real property? A closer look at your building costs could change how quickly you can deduct those expenses.

Business buildings generally have a 39-year depreciation period. A cost segregation study separates various building components, such as electrical systems and flooring. It then allows these components to be reclassified and deducted over a much shorter period, thereby deferring taxes and boosting cash flow. Recent tax law changes enhanced these benefits by increasing first-year depreciation write-offs.

Contact us to discuss whether this strategy is right for your business. We can determine reasonable cost allocations to help withstand IRS scrutiny.

05/04/2026

05/01/2025

Your business can set up a Sec. 127 educational assistance plan to give each eligible employee up to $5,250 a year, free from federal income tax and payroll tax. The plan must meet certain requirements. For example, it must be in writing, for the exclusive benefit of employees. The plan can’t discriminate in favor of highly compensated employees or their dependents who are employees. Also, you can’t offer employees the choice between tax-free educational assistance and other taxable compensation, like wages. You can provide the benefit to your own child if he or she is 21 or older, an employee of the business, not your dependent and not a more-than-5% owner. Contact us to learn more.

04/18/2025

With summer fast approaching, you might be considering hiring young people at your small business. If your children are also looking to earn some extra money, why not put them on the payroll? You may be able to turn your high-taxed income into tax-free or low-taxed income by shifting some business earnings to your child for services performed. To deduct the wages as a business expense, the work done must be legitimate and the child’s salary must be reasonable. You also may be able to achieve Social Security tax savings (if your business isn’t incorporated) and your child may even be able to make retirement plan contributions. Contact us if you have any questions.

04/11/2025

Some tax sins are worse than others. An example is not paying over income and employment taxes that have been withheld from employees’ paychecks. In these cases, the IRS can assess the trust fund recovery penalty, also called the 100% penalty, against any responsible person. It’s called the 100% penalty because the entire unpaid tax amount can be assessed personally against a responsible person or several persons. It could be a shareholder, director, officer, partner or employee of a business. To be hit with the penalty, the person must: 1) be responsible for collecting, accounting for, and paying over withheld federal income and payroll taxes, and 2) willfully fail to pay over those taxes.