A moonlighting policy (also known as an outside employment policy) safeguards employers from potential conflicts of interest without needlessly limiting employees’ rights and options for working additional jobs. Employees working second jobs doesn’t typically concern employers, but in some cases, it can impact the employee’s shift availability, work productivity, and professional behavior. That’s why it’s…
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Cost of Debt Formula & Calculator: Estimate Your Interest Payments
Cost of debt is a figure that shows how much you’ll pay for borrowing funds. It can be calculated as either an annual pre-tax percentage or an annual after-tax figure by using your company’s tax rate. The pre-tax figure can be calculated by taking the sum of your annual interest payments and dividing that number…
What Is Qualified Improvement Property & How Does It Work?
Qualified Improvement Property (QIP) is an asset classification for certain property improvements made to the interior of a nonresidential real estate building. The improvements must be installed after the taxpayer placed the building in service and have a 15-year tax life. QIP can be depreciated using both bonus and section 179 depreciation—these methods allow taxpayers…
How Mortgage Loan-level Pricing Adjustments (LLPAs) Work
A mortgage loan-level pricing adjustment (LLPA) is an adjustment to the costs involved with getting a home loan. LLPAs are usually based on the characteristics of a loan—such as the loan amount, property type, down payment amount, credit score, and occupancy type. The amount of the adjustment can vary based on the loan program and…
Best Commercial Real Estate Loan Rates
Getting the best commercial real estate loan rate will depend on your qualifications as a borrower and the loan type you’re looking to get to finance your real estate investment. Rates will vary depending on the lender and loan details, so it’s best to consider several options. Commercial real estate loans can be obtained from…
What Are Nondeductible Business Expenses?
Examples of nondeductible business expenses include business gifts over $25, business entertainment, and half of the cost of business meals.
From personal experience, I can attest that the IRS is fairly vigilant about disallowing expenses that do not meet the criteria for deduction. Deductible business expenses must be both ordinary and necessary. This means that deductible expenses should be customary for the industry in which the business operates, and the expenses should be useful. Expenses…
What Is a Chart of Accounts & a Sample Numbering System?
A chart of accounts is one list of all of your company’s accounts. Similar to a filing cabinet for your company’s accounting system, it’s used to organize transactions into groups. In a chart of accounts, you’ll typically find an account number, account name, description, account balance, and account category. Account categories include assets, liabilities, equity,…
What Is a Tax Credit vs Deduction? Difference & Calculation
Federal tax credits and deductions both reduce tax owed, but each provides tax savings in a different way. Tax deductions reduce the income subject to tax. Tax credits reduce the tax owed on the income and, in some instances, may result in a refund even when no tax is owed. Determining Your Marginal Tax Rate…