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How to convert an LLC to an S-Corporation
Converting a Limited Liability Company (LLC) to an S-Corporation (S-Corp) can offer several advantages for business owners, including tax savings. However, before you make any permanent changes, you’ll need a careful understanding of the legal and financial implications. In this article, we’ll explore the key aspects of converting an LLC to an S-Corp, including the […]
A guide to Form W-8BEN for U.S. employers with international contractors
Today’s interconnected world has opened the windows of the World Wide Web to allow businesses to collaborate with talent from across the globe. If you’re a U.S. employer engaging foreign contractors, you need to ensure the proper completion of Form W-8BEN: the Certificate of Foreign Status of Beneficial Owners for United States Tax Withholding and […]
Quick Cheat Sheet: Instructions for forms 1099-MISC and 1099-NEC 
Hiring independent contractors for your business can reduce paperwork and tax payments, but it does require using 1099 forms for reporting purposes. There are numerous 1099s to report different types of non-employment income to the IRS during the tax year. In this quick cheat sheet, we’ll break down the differences between Forms 1099-MISC and 1099-NEC […]
Is 1099-K income taxable? Here’s what you need to know 
Don’t forget: some big changes are coming for anyone earning more than $600 through a third-party settlement organization (TPSO). Whether you’ve generated income from Etsy, Airbnb, eBay, VRBO, Uber, or Amazon, you can soon expect to receive a Form 1099-K, which is also filed with the IRS. So, is 1099-K income taxable? And how will […]
What you need to know about the IRS penalty waiver on 2020 and 2021 tax returns
In a significant move aimed at alleviating the financial burden on taxpayers, the Internal Revenue Service (IRS) has announced a waiver of nearly $1 billion in late-payment penalties for millions of individuals, businesses, trusts, estates, and tax-exempt organizations that were not sent automated collection reminder notices during the pandemic. Understanding the tax relief measures The […]
Business Meals and Entertainment Expenses: What’s deductible?
If you’ve been going to town (literally) on business meals and entertainment expenses for the last two years, you may need to start second-guessing some of those starters as deduction percentages have decreased to pre-COVID levels for 2023.  The Consolidated Appropriations Act of 2021, signed by the President on December 27, 2020, made changes to […]
Don’t Miss Out on Tax Deductions in 2022 
All too often, we see people missing out on great tax-saving opportunities because they simply don’t know about them. And with tax laws changing every year, it’s not always easy to keep up with the latest tax deductions, credits, and exemptions.  Our list of frequently missed tax breaks may help you uncover money-saving opportunities this […]
Should you migrate to the Sunshine State?
“Join me in inviting @elonmusk to move @Twitter to the freest state in the nation! Florida would benefit the company as a whole—we have no state income tax and the perfect business climate. It’s time to book a one-way ticket,” said Florida CFO Jimmy Patronis in a tweet after it was announced that Elon Musk […]
More 2022 tax changes that may affect you
Last week’s blog covered some of the 2022 tax changes that may cause your tax situation to be quite different than it was in 2021. Here are some additional changes that may impact your return for the next filing season. Standard Mileage Rates Mileage Type  2021 2022 Standard mileage rate for business driving/mile 56¢ 58.5¢ […]
The 2022 Tax Changes You Need to Know
Although filing your 2021 tax return may still be top of mind, there’s no better time to start planning for the tax changes coming in 2022. Every year brings with it a long list of tax law changes that can affect your bottom line, so it’s important to familiarize yourself with what’s new and what’s […]
How Advance Child Tax Credit payments will affect your 2021 tax return
The advance monthly payments of the Child Tax Credit ended in 2021, and the IRS has begun sending out letters to taxpayers who received monthly payments that indicate how much each individual received, as well as the number of children on which the credit amount was based. The expanded child tax credit will not continue […]
Remember to Return Form 8879 to Your Tax Preparer
Why is it so important to get Form 8879 back to your tax preparer? If you have used a CPA firm or other tax preparer to file your taxes in the past decade, you’ve been required to complete a form authorizing the preparer to electronically submit your return on your behalf. Failing to submit that […]
Child Tax Credit Monthly Payments: Should you opt out?
The $1.9 trillion American Rescue Plan that passed earlier this year expanded the Child Tax Credit, an initiative aimed at putting money in the pockets of families. If you have children, expect to see a letter in your mailbox from the IRS soon regarding the schedule for advance payments of the Child Tax Credit. Here […]
Six ways to protect your identity during tax season
Whether you file your taxes yourself or work with a preparer, it’s absolutely critical to protect your personal information. Before you enter your Social Security number, review these 6 tips to help you protect your identity online. 1. Get an Identity Protection PIN from the IRS Starting January 2021, the IRS is expanding its Identity […]
Depreciation Recapture 101
The vast majority of businesses have depreciable assets: company property, buildings, equipment, vehicles, etc. Because they are used for business purposes, claiming depreciation of these assets helps to reduce the taxable income of the business. As is the case any time you wade into the murky waters of tax, the IRS is always on the […]
How to protect yourself from 12 common IRS scams
Scammers never let an opportunity go to waste, and the COVID-19 pandemic has introduced new ways for bad actors to prey on the vulnerable and scared in the form of IRS scams. Criminals are already attempting to steal money and personal information under the guise of coronavirus tax relief. The IRS recently released their “Dirty […]
Do you know who’s preparing your taxes?
When it comes to selecting someone to prepare your tax return, there are a lot of criteria to consider. Have you thought about whether the person offering to do your taxes is a legitimate tax preparer? Protect yourself from tax prep scams by knowing how the IRS evaluates tax preparers. The IRS has warned taxpayers […]
Will I owe tax when I trade in my business vehicle?
Prior to the Tax Cuts and Jobs Act (TCJA), taxpayers could exchange like-kind business property (such as trading in a business vehicle) and defer any gain until the property was ultimately sold. Property that was eligible for this tax-free exchange included both real and personal property. If you traded in a business vehicle in 2017 […]
IRS Alerts Taxpayers of Refund Scam
The IRS warns taxpayers of a new twist on an old scam. Criminals are depositing fraudulent tax refunds into individuals’ actual bank accounts, then attempting to reclaim the refund from the taxpayers. Here are the basic steps criminals follow to carry out this scam. The thief: Hacks tax preparers’ computers to steal taxpayer data. Uses […]
IRS Fails to Notify 458,658 Identity Theft Victims
The Internal Revenue Service failed to tell nearly half a million victims of identity theft last year their information was being used by others for employment purposes, according to a new report, which attributed the failure to a computer programming error.   The report, from the Treasury Inspector General for Tax Administration, found the programming […]
IRS Urges Taxpayers to Prepare for Hurricane Irma
After the devastation of Hurricane Harvey and with Hurricane Irma threatening parts of the U.S. and Caribbean, the IRS reminds taxpayers that the agency is here to help. Individuals, businesses and organizations  are encouraged to prepare for a variety of disaster and emergency situations in the following ways: Create Electronic Copies of Key Documents Taxpayers […]
Watch Out: The IRS is Bringing in Backup
IRS to Use Private Debt Collectors Okay, here’s the scoop: The IRS will begin turning over taxpayer accounts to four private debt collection companies. These firms will be able to keep up to 25% of what they collect. Now before you start to curse the IRS under your breath, know this: the IRS utilized private […]
Common IRS Audit Triggers
There is no shortage of ways a taxpayer can run afoul of federal tax reporting requirements and find themselves in an audit. After all, the Internal Revenue Code (Federal Tax Law) comprised almost 74,000 pages as of 2013 and is growing each year. Despite the overwhelming quantity of information in the Code, you, the taxpayer, are required […]
IRS Denies Pizza Deduction
In a recent tax court case, the IRS has successfully denied a “pizza deduction” for wages paid out in, well, pizza (Ross, TC Summ. Op. 2014-68).  In this case, a small business owner who prepared taxes and did business consulting had “hired” her kids to do small jobs around the office and paid them in pizza.  Rather than […]
Note To Service Industry: IRS Says Service Charges Are Not Tips!
The IRS has recently released an updated tax rule that differentiates between tips, which are voluntary payments to service personnel such as waiters, waitresses, bartenders, valet staff, etc. and service charges, such as those automatically applied to bills by restaurants for groups of certain sizes. Beginning January 2014, the IRS will treat any automatic gratuity as […]
Three Popular Scams
It seems that every year we field about a dozen phonecalls regarding phony notices, business solicitations and phishing emails sent to business owners.  These range from emails with fake Quickbooks update links to official looking letters in the mail with requests for banking and personal information.  We have plenty of experience helping clients sort through […]
What To Do If You Are Audited
Have you received a notice from the IRS telling you that your tax return has been selected for examination? Selection for examination means that you are being audited by the IRS.  Here’s what to do if you are audited. If your tax return is selected for examination by the IRS, you may receive the audit […]
Oregon Gives $2.1 Million To Scammer
When Krystle Reyes of Salem, OR filed her state tax return via Turbo-Tax, she decided to add a couple zeros to some key figures.  Reyes overstated her income by $3 million and requested a $2.1 million refund.  She got it. In the age of computers, you may be surprised to see that this scam was […]
More IRS Notices In The Mail
In the age of computers, there’s not much that gets by the IRS.  In fact, the IRS is seeking to automate as much as possible to bring relief to its agents.  While this is great for them, it can be a nightmare for filers.  The result has been a staggering number of computer generated IRS […]
IRS Efficiency Level Update
Every year the Taxpayer Advocate’s office releases the most pressing concerns involving the IRS from a taxpayer perspective. This year, with IRS efficiency at an all time low, the TAS (Taxpayer Advocate Service) has picked up on the pain many of us are feeling when dealing with the IRS. It all boils down to this: the […]
Woman Faces Life in Jail For Claiming Fake Dependents
In December of 2002, Norma Coronel gave birth to one child; but that’s not what her tax return says..  Coronel was indicted on 35 counts and arrested after claiming 19 children, 18 fake dependents on her tax return.  Unbelievable we know, but this type of activity happens everyday due to the earned income credit. She was caught […]
IRS surveys are coming to a mailbox near you!
About 20,000 individuals and 24,000 businesses have been randomly chosen and will soon get letters from the IRS.  Don’t panic, these are not collection letters.  These IRS surveys will help them update their estimates of what sort of burden they place on you.  They are looking to see how much time you spend on filling out IRS […]
Related Party Lending; Non-Profits Beware!
The IRS is increasing audit examinations of tax exempt organizations, specifically with regard to related party lending.  They are looking for disqualified transactions to disqualified people who are personally involved with the not for profit or tax-exempt organization.  This includes lending between the non-profit and any of its directors or staff, related party lending, especially […]
IRS Extends Wait Times
What’s the difference between a delinquent taxpayer and the IRS?  Delinquent taxes are due right away, but the IRS now has a 16 week waiting period to even process most amended returns or other claims for refund.  In addition to amended returns, paper filed returns are also subject to these extended wait times.  Certain credits, […]
IRS Notices increase: check twice before you pay!
E-filing can speed up the tax filing process, and that is really nice…sometimes.  When they process your return before they process your extension, that can cause some headaches in the form of IRS Notices.  Already we are starting to see late filing notices go out for corporate returns that we filed in the last half […]