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Reduce Tax with an S Corporation
Do you conduct your business as a sole proprietorship or as a wholly owned limited liability company (LLC)? If so, you’re subject to both income tax and self-employment tax. There may be a way to reduce tax with an S corporation. Self-employment tax basics The self-employment tax is imposed on 92.35% of self-employment income at [...]
When is Married Filing Separate Better?
Married couples often wonder whether they should file joint or separate tax returns. When is married filing separate betrter? The answer depends on your individual tax situation. It generally depends on which filing status results in the lowest tax. But keep in mind that, if you and your spouse file a joint return, each of [...]
Tax Aspects of Selling Mutual Fund Shares
Perhaps you’re an investor in mutual funds or you’re interested in putting some money into them. You’re not alone. The Investment Company Institute estimates that 56.2 million households owned mutual funds in mid-2017. But despite their popularity, the tax rules involved in selling mutual fund shares can be complex. Selling mutual fund shares: tax basics [...]
Downside to High Employment Rates
(This is Blog Post #798)
Going Into Business for Yourself
When you make the decision of going into business for yourself, you'll find that many people who launch small businesses start out as sole proprietors. Here are nine tax rules and considerations involved in operating as that entity. 1. You may qualify for the pass-through deduction. To the extent your business generates qualified business income, [...]
Don’t Approve That Office Supply Invoice Yet
When Dan received a large shipment of highlighter markers, he was confused. He didn’t remember ordering them — and he was the company’s sole office supplies buyer. Yet when he received an invoice for the markers a week later, he approved it for payment. After all, employees were already using the highlighters. Dan fell for a [...]
Guidance on PPP Loan Calculations for Self-Employed Individuals
The Small Business Administration (SBA), in consultation with the Department of the Treasury, has issued guidance to assist businesses in calculating their payroll costs for purposes of determining the amount of a Paycheck Protection Program (PPP) loan businesses can apply for. Borrowers and lenders may rely on the guidance provided in this document as SBA’s interpretation [...]
Eligible IRA Withdrawals Now Penalty-Free
(This is Blog Post #794)
Economic Impact Payment FAQs
Millions of eligible Americans have already received their Economic Impact Payments (EIPs) via direct deposit or paper checks, according to the IRS. Others are still waiting. The payments are part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Here are some answers to Economic Impact Payment FAQs. Who’s eligible to get an EIP? [...]
Employment Tax Deposit Deferral FAQs
On its website, IRS has issued FAQs on the deferral of the deposit and payment of the employer's share of Social Security taxes and self-employed individuals to defer payment of certain self-employment taxes that is provided by the Coronavirus, Aid, Relief and Economic Security Act (CARES Act). These employment tax deposit deferral FAQs will be updated [...]
CARES Act’s Impact on Excess Business Losses
Back in Blog Post #778 on 4/1/20, I summarized the Coronavirus Aid, Relief, and Economic Security (CARES) Act tax provisions. That post included a brief discussion of the CARES Act’s impact on excess business losses. Here is more about the deferral of, and changes to the limit on, excess business losses. Deferral of the excess [...]
Get My Payment Application Debuts on IRS.gov
As appearing in e-News for Tax Professionals: Issue Number 2020-16 Working with the Treasury Department, the new Get My Payment application, allowing taxpayers to check on their Economic Impact Payments, debuted on the IRS website. The application will answer common questions as an initial round of more than 80 million Economic Impact Payments hits recipients’ [...]
IRS Announces More COVID-19 Relief and Details
In the midst of the Coronavirus (COVID-19) pandemic, Americans are focusing on their health and financial well-being. To help with the impact facing many people, the government has provided a range of relief. Here are some new announcements made by the IRS. More deadlines extended As you probably know, the IRS postponed the due dates [...]
Seniors Face a Double Threat with COVID-19
Seniors face a double threat with the coronavirus (COVID-19) pandemic. The elderly are considered the most vulnerable population for medical complications associated with the virus. They’re also prime targets for COVID-19 scams. If you’re a senior — or have elderly relatives and friends — read and share the following information. Everyone a potential victim There’s [...]
Employment Tax Deposit Relief via COVID-19 Tax Credits
The IRS has issued guidance providing employment tax deposit relief for employers that are entitled to the refundable tax credits provided under two laws passed in response to the Coronavirus (COVID-19) pandemic. The two laws are the Families First Coronavirus Response Act, which was signed on March 18, 2020, and the Coronavirus Aid, Relief, and Economic [...]
Disclaimer
This blog is designed to provide competent and reliable information regarding the subject matter covered. However, it is being provided with the understanding that the blogmaster is not engaged in rendering investment advice. Laws and practices often vary from state to state and if investment assistance is required, the services of a licensed investment professional should be sought. The blogmaster resolutely encourages the reader/viewer to do their own research and due diligence before acting on any information contained herein. As such, Roger Rossmeisl specifically disclaims any liability that is incurred from the use or application of the contents of this blog. It should also be noted that the views contained in this blog are not necessarily representative of the opinions/beliefs of the other owners, management and/or employees of Kho & Patel CPAs.
