SJ Accounting Services LLC.

09/01/2026

Is that maintenance cost a repair: or an improvement?

Under the tangible property regulations, the distinction matters:

Routine work that keeps a facility, piece of equipment, or vehicle in ordinary operating condition may generally qualify as a currently deductible repair under Section 162.

Costs that improve property, restore it after significant damage, or adapt it to a new or different use generally must be capitalized under Section 263(a) and depreciated over time.

The challenge is that the invoice description alone may not tell the full story. Replacing a component, upgrading capacity, or completing a larger project can lead to a different tax treatment than routine maintenance.

Disciplined bookkeeping helps. Keep clear descriptions, separate routine maintenance from larger projects, retain invoices, and maintain accurate fixed-asset records. This makes tax preparation more reliable and can reduce unexpected reclassification questions.

Tax treatment depends on the facts, applicable elections, and current regulations. This post is for educational purposes only and is not tax advice.

Have questions about how your business is categorizing facility, equipment, or vehicle costs? Visit www.sjaccountingcpa.com to learn more.

08/30/2026

Could a payroll mistake become your personal bill?

When taxes are withheld from employee paychecks, those funds are held for the government: not for business expenses. If withheld federal income, Social Security, or Medicare taxes are not properly collected, recorded, and paid, the IRS may assess the Trust Fund Recovery Penalty equal to 100% of the unpaid amount.

That can create personal liability for a responsible person: such as an owner, officer, or bookkeeper: with authority over payroll or tax deposits: when the failure is willful.

Disciplined bookkeeping helps reduce the risk:
• Confirm whether deposits are due monthly or semiweekly.
• Record payroll liabilities accurately.
• Reconcile payroll liability accounts regularly.
• Review bank activity to confirm deposits were made on time and for the correct amounts.
• Investigate differences promptly instead of allowing them to carry forward.

Good payroll records do more than support financial reporting. They help protect the business: and the people responsible for its payroll obligations.

For practical guidance on payroll records and bookkeeping, visit www.sjaccountingcpa.com.

This post provides general information only and is not tax, legal, or accounting advice.

08/28/2026

Could your home office pass the documentation test?

A dedicated space may qualify for a home-office deduction when it is used regularly and exclusively for business, subject to applicable tax rules. Eligibility and the deduction amount depend on your specific facts: including business use, workspace measurements, household expenses, and the method selected.

Good records help support the calculation. Consider maintaining:

A floor plan showing the office area and total home area
Dated photos showing the dedicated workspace
Utility, rent or mortgage, insurance, and repair records
A clear calculation of the business-use percentage
Notes supporting how the space is used for business activities

For business owners and high-net-worth individuals with business activity, documenting the facts as they occur is generally more reliable than reconstructing them at tax time. Keep records organized and review the approach with a qualified tax professional before claiming the deduction.

Visit www.sjaccountingcpa.com for more educational tax planning and preparation resources.

Educational disclaimer: This post is for general information only and is not tax, legal, or accounting advice. Rules and eligibility vary based on individual circumstances and may change. Consult a qualified professional about your situation.

08/27/2026

Your business may be reimbursing expenses the wrong way.

An accountable plan can help a business reimburse eligible employee and owner-business expenses without treating every reimbursement as taxable wages: when the rules are followed.

The details matter: expenses should have a clear business connection, be adequately documented, and be returned if an excess advance is not spent. Personal expenses should never be blended into business reimbursements.

For companies with $1M+ in revenue, clean reimbursement records can improve payroll reporting, support tax preparation, and make owner spending easier to review.

Curious whether your current process is creating avoidable tax and bookkeeping issues? Review it before year-end.

SJ Accounting Services LLC

Explore comprehensive financial solutions tailored to meet your needs with SJ Accounting Services LLC. As a leading provider of Virtual CFO, Virtual Controller, and professional accounting services, our New York-based firm, spearheaded by Sion Jajate, CPA, offers expert financial consulting, tax pla...

08/26/2026

Your partnership or LLC’s tax basis may be changing throughout the year: and the result may not be obvious from the bank balance.

An owner’s basis can generally increase with cash or property contributions, allocated taxable income, and certain increases in the owner’s share of partnership debt.

It can generally decrease with allocated losses and deductions, distributions, and certain reductions in partnership debt.

Why does this matter? Business losses are generally deductible only to the extent allowed under applicable basis and other tax rules, including at-risk and passive activity limitations. A distribution may also create taxable gain if it exceeds the owner’s basis, depending on the facts.

Accurate bookkeeping is the starting point, but a profit-and-loss statement alone may not show the full picture. Maintaining an annual basis schedule and reconciling it to contributions, K-1 activity, debt allocations, and distributions can help identify issues before filing.

Partnership agreements, debt terms, entity classification, and each owner’s individual situation matter. Basis should be reviewed with a tax professional rather than estimated from cash available.

If you own a partnership or LLC, consider adding an annual tax-basis review to your planning checklist. We’re here to help you prepare the records and questions for that conversation.

08/26/2026

Revenue can rise while project profit quietly disappears.

Without reliable job costing, businesses may not see which customers, contracts, or projects are actually producing strong margins.

A disciplined bookkeeping process should connect labor, materials, subcontractor costs, and overhead to the right job or department. Reviewing budget-to-actual results throughout the project: not only after completion: can help leadership spot overruns early and improve future pricing.

For B2B companies with $1M+ in revenue, accurate job-cost data supports better tax preparation, cleaner financial reporting, and more confident decisions about growth.

Are your books showing revenue: or real project profitability?

SJ Accounting Services LLC
www.sjaccountingcpa.com

08/25/2026

An extension gives you more time to file: not more time to pay.

That distinction can affect cash flow, penalties, and the accuracy of your tax plan.

A strong extension strategy starts before the original filing deadline. Estimate the balance due, review year-to-date books, identify missing information, and coordinate estimated payments with expected business income and personal tax obligations.

For high-growth businesses and high-net-worth individuals, waiting until the extension deadline can create a rushed filing and an unnecessary liquidity squeeze.

Use the extra filing time strategically: but don’t mistake it for a payment holiday.

SJ Accounting Services LLC

Explore comprehensive financial solutions tailored to meet your needs with SJ Accounting Services LLC. As a leading provider of Virtual CFO, Virtual Controller, and professional accounting services, our New York-based firm, spearheaded by Sion Jajate, CPA, offers expert financial consulting, tax pla...

08/21/2026

Buying a business? The purchase price is only the beginning.

In an asset acquisition, the total price is allocated among categories such as inventory, equipment, real estate, and intangible assets. This purchase price allocation can affect:

• The buyer’s tax basis
• Future depreciation and amortization deductions
• The seller’s taxable gain or loss
• How the transaction is recorded in the books

Section 197 intangibles may include customer relationships, trademarks, licenses, noncompete agreements, and goodwill. Qualifying Section 197 intangibles are generally amortized on a straight-line basis over 15 years, beginning in the month acquired. However, not every intangible asset qualifies, and special limitations may apply.

For a qualifying business asset acquisition, the buyer and seller generally report the allocation on Form 8594. The amounts should be supported by reasonable fair market value information and reported consistently on both tax returns.

Before signing the purchase agreement, review the proposed allocation with your tax professional. Early planning can help connect the deal documents, tax preparation, amortization schedule, and bookkeeping records.

Considering an acquisition? A careful allocation review is a practical place to start.

08/20/2026

Could a future business sale qualify for a significant capital-gain exclusion under Section 1202?

For qualifying C-corporation stock issued after September 27, 2010 and on or before July 4, 2025, eligible taxpayers who hold the stock for more than five years may potentially exclude up to 100% of the gain: generally limited to the greater of $10 million or 10 times their basis per issuer.

For stock issued after July 4, 2025, new rules generally provide a $15 million exclusion limit, a $75 million gross-assets test, and phased exclusions of 50% after 3 years, 75% after 4 years, and 100% after 5 years.

Eligibility is not automatic. The company must remain a domestic C corporation, meet the active business requirement, and use at least 80% of its assets in qualified business activities. A C-corporation conversion may also affect the stock’s issuance date, basis, and holding period.

Bookkeeping and tax-preparation records should clearly track the acquisition or issuance date, stock basis, ownership, holding period, C-corporation status, gross assets at issuance, active-business activity, and supporting documents for Form 8949 and Schedule D.

Section 1202 planning is highly fact-specific. Reviewing the records before a transaction: not after: can help identify gaps while there is still time to address them. Consider discussing your stock records and potential eligibility with a qualified tax professional.

08/19/2026

Selling commercial or investment real estate? A Section 1031 exchange may allow you to defer capital gains tax when proceeds are reinvested in qualifying like-kind property.

The timing is strict:
• Identify replacement property within 45 days of the sale.
• Complete the purchase within 180 days: or by the earlier tax-return due date, when applicable.
• Use a qualified intermediary to help maintain the exchange structure. Taking possession of the proceeds directly can jeopardize the tax treatment.

A 1031 exchange does not eliminate tax: it generally defers it. The property, transaction structure, financing, and reinvestment plan all matter.

For business owners and high-net-worth individuals, accurate bookkeeping is also essential. Your records should clearly track the original basis, sale proceeds, debt, closing costs, replacement-property costs, and related deadlines. Coordinating these records with your tax planning can help reduce surprises at filing time.

Considering a commercial or investment property sale? Start planning before the closing documents are signed. A qualified tax professional and intermediary can help you evaluate whether a Section 1031 exchange fits your situation.

Learn more at www.sjaccountingcpa.com.