Tag Archives: IRS
An S Corporation Shareholder and an Officer or Employee? Avoid IRS Scrutiny with Reasonable Compensation
Work and play are pretty much the same thing, according to Mark Twain — just under different circumstances.
Work you get paid for. Or you should. And if you’re an S corporation shareholder who also works in the business (providing anything other than minimal services), the IRS will see that you do.
IRS rules require that you receive reasonable compensation for your work. Reasonable compensation in this context is wage income, not distributions or other nonwage payments. In other words, a reasonable (continue reading…)
Know How Long to Keep Those Digital or Paper Documents? Record Retention Guidelines for People, Businesses and Not-for-Profits
When it comes to saving things, there are really two kinds of people: Those who tend to save everything, forever. And those who throw it all away or delete it at the earliest possible moment — and sometimes before.
The same is often true for businesses and not-for-profit organizations. They can save too little or too much, for too long or not long enough.
So, when it comes to digital and paper records, which documents should you keep and for how long?
Although (continue reading…)
Posted in Closely Held + Family Business Practice, Distribution + Light Manufacturing Group, Emerging Businesses + Turnarounds, High Net Worth Practice, Hospitality, Restaurant + Lodging Group, Not-for-Profit Practice, Professional Practices Group, Real Estate Group, Retail Group, Tax Services, Technology Group, Uncategorized
Tagged Business Tax, Disaster Planning, Hardware/Software Systems, IRS, Operations, Personal Finances, Personal Tax
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Claiming a Small Business Health Care Tax Credit? Estimator Tool Can Help Determine If You’re Eligible and For How Much
Need help in providing your employees with health care?
You may be eligible for a federal small business health care credit through December 31, 2013.
For-profit and not-for-profit organizations must satisfy three requirements to be eligible: fewer than 25 full-time-equivalent employees, average wages of less than $50,000 and a qualifying arrangement for employee health insurance coverage.
If you’re a qualifying for-profit business, the maximum credit is 35 percent of your share of the premiums for your employees. If you’re a not-for-profit organization, you (continue reading…)
Posted in Closely Held + Family Business Practice, Distribution + Light Manufacturing Group, Emerging Businesses + Turnarounds, Hospitality, Restaurant + Lodging Group, Not-for-Profit Practice, Professional Practices Group, Real Estate Group, Retail Group, Tax Services, Technology Group
Tagged Business Tax, Compensation, IRS, Legislation, Tax Credits + Incentives
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Employee or Independent Contractor? The IRS Wants to Know
James has worked with a young technology company almost from its inception. Initially the company was one of many clients.
Gradually, James spent more and more time working there and less on projects for other clients. Eventually, he was on-site pretty much every day and only rarely accepted small consulting jobs he could complete evenings and weekends.
Is James still a self-employed consultant? Or, from the perspective of the IRS, has he actually become an employee of the company?
The distinction between an employee (continue reading…)
Posted in Accounting Services, Closely Held + Family Business Practice, Distribution + Light Manufacturing Group, Emerging Businesses + Turnarounds, Hospitality, Restaurant + Lodging Group, Not-for-Profit Practice, Professional Practices Group, Real Estate Group, Retail Group, Tax Services, Technology Group
Tagged Business Tax, Compensation, IRS, Operations, Startups
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Hiring a Qualified Veteran? IRS Extends Key Deadline for the Work Opportunity Tax Credit
For some time, for-profit business and not-for-profit organizations that hire qualified veterans and certain members of other targeted groups have been eligible for a federal Work Opportunity Tax Credit (WOTC).
However, the credit for veterans expired at the end of 2012 and for targeted non-veterans at the end of 2011.
The American Taxpayer Relief Act, signed into law in January of 2013, retroactively extended the WOTC through December 31, 2013 for veterans and targeted non-veterans.
Because of the retroactive nature of this extension, (continue reading…)
Posted in Closely Held + Family Business Practice, Distribution + Light Manufacturing Group, Emerging Businesses + Turnarounds, Hospitality, Restaurant + Lodging Group, Not-for-Profit Practice, Professional Practices Group, Real Estate Group, Retail Group, Tax Services, Technology Group
Tagged Business Tax, IRS, Legislation, Tax Credits + Incentives
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Are Your Fringe Benefits Taxable? What Partners, LLC Members and S Corporation Shareholders Need to Know
Health coverage. Meals. Life insurance. Parking fees and transit passes. Flexible spending accounts. Even employer-provided cell phones. Bet you’re getting some kind of employer-provided fringe benefits in addition to your salary.
But do you know which fringe benefit the IRS considers taxable? Which benefits are also subject to employment taxes? And how fringe benefits affect your estimated taxes?
It can be incredibly confusing under the best of circumstances—and it’s especially complicated for partners, as well as members of LLCs and certain shareholders in S corporations.
But unless (continue reading…)
Have a Home Office? IRS Announces an Optional, Simplified Approach for Claiming a Tax Deduction
The greatest ideas are often the simplest. And at least by this measure, the federal tax code is not exactly filled with great ideas.
According to the Internal Revenue Service, well over three million taxpayers claim a home office deduction each year. The annual recordkeeping required to calculate and support those deductions is estimated at 1.6 million hours.
There must be a simpler way.
And now there is. Beginning with tax year 2013 filings, you have an alternative to using the traditional more-than-forty-line-form (continue reading…)
Federal Tax Alert: January 31 is the Deadline for 2012 Tax-Free IRA Distributions to Charity
The newly enacted American Taxpayer Relief Act retroactively reinstated federal tax rules that allow certain IRA owners to make tax-free distributions from their IRAs to eligible charities.
If you have an IRA and are age 70½ or older, you can make tax-free distributions of up to $100,000 per year for 2012 and 2013. These distributions aren’t subject to charitable contribution limits since they aren’t included in your gross income or claimed as a deduction on your return. They do, however, count (continue reading…)
Posted in High Net Worth Practice, Not-for-Profit Practice, Tax Services
Tagged Business Tax, Estate + Gift, IRS, Personal Finances, Personal Tax, Philanthropy, Retirement Planning, Wealth Planning
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Federal Tax Alert: IRS Delays the Start of Tax Season
Retroactive changes to the tax rules for 2012—enacted as part of the American Taxpayer Relief Act—will delay the start of this year’s tax filing season while the IRS updates its tax forms and software.
The IRS announced plans to begin processing paper and electronic individual income tax returns on January 30—including those returns affected by the new Alternative Minimum Tax (AMT) patch and those that claim a deduction for state and local sales taxes, higher education tuition and fees, and educator (continue reading…)
Posted in Closely Held + Family Business Practice, High Net Worth Practice, Tax Services
Tagged AMT, Business Tax, Estate + Gift, IRS, Legislation, Personal Tax, Tax Credits + Incentives
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Providing Schedule K-1 Electronically? IRS Issues New Requirements Effective Now
It’s always tempting to save time and money, not to mention the planet, by reducing the use of paper documents and going electronic.
But it isn’t always simple.
If you’re thinking of going electronic with your Schedules K-1 this year—perhaps as email attachments or downloads from a portal or website—you should know about new IRS requirements for obtaining your partners’ consents and for required disclosures and processes.
The new requirements were issued by the IRS in Revenue Procedure 2012-17, effective February 13, 2012. They (continue reading…)
Posted in Closely Held + Family Business Practice, Distribution + Light Manufacturing Group, Emerging Businesses + Turnarounds, Hospitality, Restaurant + Lodging Group, Professional Practices Group, Real Estate Group, Retail Group, Tax Services
Tagged Business Tax, Hardware/Software Systems, IRS
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