One of the most important questions to ask yourself - are you really spending the right amount of time and getting the most from your CPA consultation?
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Here are few frequently asked questions relating to your tax refund.
Where can I check the status of my tax return?
It is very easy to check the status of your refund online via the IRS website. Please check the following link [Read More]
Below are few frequently asked questions relating to amended tax returns.
How long does it take to get a refund from an amended tax return?
As per IRS website, it may take up to 3 weeks for t...
[Read More]Below are few frequently asked questions about the premium tax credit reconciliation letter from IRS.
Why did I receive this letter?
The re...
[Read More]One of the most frequent questions we get from business owners at the time of company formation is 'How are LLCs taxed'?
This is a very interesting question as there is no single answer and may vary based on the tax classif...
[Read More]As a business owner, you are wearing different hats all through the year. And if you are like the vast majority, you probably think about the tax bill only end of the year or as it nears the tax filing deadline. This often as you know results in higher taxes and lesser options to invest in tax sa...
[Read More]Independent contractor or employee- which is the right classification?
As an employer, you are required to pay payroll taxes withheld from your employee paycheck in addition to the employer taxes. For independent contractors, you need to issue a 1099 form by Jan ...
[Read More]Many business owners may use part of their home as a business office. The following post has few key points that outline your eligibility to claim this business deduction on your tax return.
1) Regular and exclusive use: In general, the part of your home used fo...
[Read More]Yes, you will require EIN# for single member LLC. It's a unique identifier for your company similar to SSN # for individuals.
IRS has made it very easy to apply for an EIN number online. You cannot cancel the EIN once you have applied & have been approved. Therefore, you need to ensure...
[Read More]This is also one of the most frequently asked questions that we receive.
To make it easier for employers, IRS has provided guidelines via form SS8 regarding classification of employee vs Contractor.
If you do not classify this correctly, there is a high chance of receiving notice...
[Read More]You are not required to apply for a new EIN if only the ownership of the LLC or company has changed.
You need to apply for a new EIN if it was operating as a sole proprietor and now you are incorporating as an LLC or INC.
[Read More]It is 9.25%. California state tax 6%, Los Angeles county tax 0.25%, Special tax 3%. The sales tax rate in Redondo Beach CA is 98 % higher than other CA localities. For sales tax, we always prefer you provide a zip code.
** Based on a question asked on quora.
[Read More]Six tax tips on estimated tax payments
Estimated taxes must be paid as you receive or earn any income during the year. If you are an employee, your employer usually withholds your taxes based on the data provided in the form W4. If you are 1099 contractor or you are...
[Read More]Did you recently move to a new job? You may be eligible for moving expense deduction if you changed locations or moved into a new home. New home refers to the main home and not a vacation or seasonal home.
Eligible expenses may be claimed as a tax deduction if they pass three tests :
<... [Read More]f you are an employee, you can complete the form W4 and hand it over to your payroll department. Your employer will withhold taxes for you.
If you are self-employed or as a 1099 contractor, then you need to calculate your estimated taxes 1040-ES is the form.
Below blog article has l...
[Read More]Yes, US Citizens have to pay taxes on world wide income even if you are living abroad.
In this scenario, especially we highly recommend that you consult a CPA or a tax professional etc. Certainly not recommended for DIY even if you are generating minimum or no income. They usually have hig...
[Read More]If you are an employee, you can complete the form W4 and hand it over to your payroll department. Your employer will withhold taxes for you.
If you are self-employed or as a 1099 contractor, then you need to calculate your estimated taxes 1040-ES is the form.
We highly recommend con...
[Read More]As long as you are registered as LLC in California & LLC member, you are required to pay $800 franchise tax fees. There are no exceptions.
Sole proprietors do not pay LLC tax but it has many risks including personal assets may be liable to pay your business debts etc. Its not worth the...
[Read More]A sole proprietor pays quarterly taxes based on income generated for the quarter. End of the year, he or she needs to file a form Schedule C on the form 1040 for individuals.
There will be penalties assessed at the time of tax filing if taxes are not paid by these due dates.
The qua...
[Read More]There is no special tax rate for short term capital gains. They are taxed at the same rate as your ordinary income. Ordinary income tax rates range from 10% to 39.6%
If you can hold your hold your assets for more than a year, you will qualify for long term capital gains rate which are 0%,1...
[Read More]This is a very broad question and it depends on your business situation & entity type for US- S Corp, C Corp, partnership or sole proprietor.
If you are a C Corporation or S corporation, taxes are very complex so certainly consult a tax professional or CPA.
My response below is ...
[Read More]As long as you are registered as LLC in California & LLC member, you are required to pay $800 franchise tax fees. There are no exceptions.
Sole proprietors do not pay LLC tax but it has many risks including personal assets may be liable to pay your business debts etc. It's not worth th...
[Read More]As a small business owner, if you are a sole proprietor or a partnership ( Single Member LLC/Multi member LLC), you are required to estimate your quarterly share of income /expenses & remit a payment to IRS if there is a tax due.
If you elected S Corporation status for your small busin...
[Read More]As you are registered in Delaware as a C Corporation.Federal taxes - you will file form 1120.
State taxes - Delaware
In general, even though you are registered in Delaware, you are physically located in Illinois. Also, revenue is generated within Illinois. Therefore, most likely y...
[Read More]This is a very general question. There are various types federal, state, county taxes. They are all based on your industry, type of income generated and federal/state rules by jurisdiction. In addition, the taxation rules are based on the type of your tax classification
** Our ...
[Read More]IRS has provided clear guidelines via form SS8 regarding contractor vs employee relationship.
Overall there are various factors -behavioral, financial, the overall perception of employer worker relationship etc play a very important role in choosing the right classification.
Your co...
[Read More]Yes you will require an EIN number as a single member LLC. You will require this to open a bank account, various permits, and licenses, filing taxes, hiring employees.
EIN is the unique identification number similar to SSN for individuals. IRS has made it very easy to apply for an EIN # on...
[Read More]A simple answer to your question is its easy to start. You can be a business owner today with a small capital and start your business. Eg : You see so many consultants, freelancers, artists. Also, many are not aware of the advantages of incorporation. Therefore, many start out as sole proprietors...
[Read More]A short answer would be IRS has provided guidance on contractor vs. employee. You can also take a look at form SS8 from IRS. The classification of employee vs. contractor is based on various factors behavioral, financial, the relationship between both parties etc.
Also, employers end up pa...
[Read More]I would certainly not recommend DIY for S Corporation. There are few key items that a professional can handle very easily. Payroll accounting, owner employee compensation etc can get a bit complex.
If not handled correctly, you will receive notices from federal and state agencies which wil...
[Read More]At a high level, your CPA or business advisor should be able to walk you through some basic information on the choice of business structure and the tax implications. In addition to this, a basic course that outlines financial management would be a plus to the founders.
[Read More]My response is assuming you are a single member LLC taxed as a sole proprietor. If so, then as you are registered in CA you need to pay the franchise tax even if you did not generate any profit.
Regarding federal filing, many businesses at start-up phase generate losses. As long as you hav...
[Read More]As a real estate agent, you are considered self-employed by the IRS. This applies even if you are working for a real estate brokerage firm. As a self-employed sole proprietor, you are eligible to many business deductions that you incur in your real estate sales activities. In order to claim the...
[Read More]Yes, you are required to pay self-employment tax. It is better to discuss with CPA or tax professional if you have multiple sources of income and complex tax situation.
** Our response to a question asked on quora.
[Read More]As long as your LLC was an active legal entity, you will be required to pay the $800 annual franchise fee for that financial year.
Once you close your LLC & federal tax filings, then you will no longer be sent notices.
Usually, most states will not issue clearance to close a com...
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According to California revenue and tax code, you are considered doing business in California if you are actively engaged in transactions with a profit objective or financial gain.
While there are many conditions to qualify under this, I am highlighting few which may be more rele...
[Read More]As an entrepreneur, you are busy managing various key functions of your business. If you are like most entrepreneurs, you are thinking about taxes only around the tax filing deadline.
Around tax time you may soon find out that either you are paying too much in taxes or that you withheld t...
[Read More]For real estate property sale, you can exclude up to $250,000 of gain ($500,000 if you are married jointly) on the sale of your home. In order to qualify for this exclusion, you need to meet the eligibility test.
The eligibility test is as follows :
W4 form is used by the employer to withhold taxes from an employee paycheck. This is based on the information provided by the employee via the W4 form. There is one important note as many employees miss out & find out only at the time of tax filing.
If you have any major life event lik...
[Read More]No, you cannot deduct it as there are no losses allowed on personal property like a car, personal residential property.
However, there are special rules that may apply if it was partially used as a rental property. There are also several other rules that apply to a rental real
estat...
[Read More]Usually, if you are on F1 OPT(Optional practical training) the employer issues a W2. The student then files form 1040 NR along with form 8843.
In your question, the complete facts have not been presented so it is unclear why an employer would issue a 1099-MISC without withholding taxes. [Read More]
Montana has $70 as filing fees and $20 annual fees for LLC. So, costs are lower compared to few of the other states like IL or MA
Is there any reason why you are opening LLC only in Montana?
Delaware and Nevada are more popular for online businesses. However, if you open LLC in thes...
[Read More]In every state, as a seller, you are required to collect sales tax from a customer based on the nexus rules by state.
If you are a reseller, then you need to complete a reseller certificate and hand it over to your supplier. This is so he does not charge sales tax on your purchases.
It's always best to outsource your accounting, payroll, and taxation needs to a company that specializes in these services.
This will allow you to focus on your core business.
** Based on our response to a question asked on Quora.
[Read More]Hi
Your marital status on last day of the financial year determines the filing status.
Below is some general information.
Hi
There is no difference as far as taxation is concerned. Just from a business perspective, LLCs these days are very popular due to the simplicity and ease of formation. In addition, the number of compliances and annual state forms/fees are lower as compared to corporation.
Other t...
[Read More]In general, first determine if you are a resident alien or non-resident alien.
If you are a non-resident alien, you will need to file form 1040 NR and report your business income. This applies if your business income is directly connected to US Source income.
In order to determine i...
[Read More]It depends on the context which is not provided here. I would recommend that if your tax situation is complex, you should schedule time with a CPA or tax professional.
In general, it is usually
Hi
It depends. There are specific tax rules regarding this deduction and I would highly recommend you discuss with your tax professional.
If this is not your regular place of work and your business miles are significantly higher than your regular place of work, you may be able to ta...
[Read More]There are no tricks. A better way to rephrase may be tax planning strategies.
There are no standard solutions and often times they may be not be appropriate based on your tax situation and your living expenses etc.
However, in general 401k, Roth and Traditional IRA, Health Savings a...
[Read More]Hi
Agree to the answer by David Himes. You do not receive the tax deductions. A better way to rephrase may be you are eligible to claim certain tax deduct...
[Read More]Once you form a corporation, it is not necessary to hire employees or take a salary because you are a C Corporation.
It is a business decision & it depends on various factors.
Profit-generating years, ensure you take a reasonable salary and promptly pay federal & state taxes...
[Read More]As we are approaching the end of the year and close to the holiday season, many business owners and individuals donate money, gifts or other tangible items to charitable organizations. One of the very frequently asked questions are:
It depends on various factors-
As a busy technology professional, you are busy serving other departments within your company or your clients with their technology problems. While many of you may be already aware of few of these deductions, there are many who have less information on what can and cannot be deducted. So, in orde...
[Read More]iPhone X and iPhone 8 are going to be the most popular items on sale during the upcoming holiday season. One of the questions we do receive at the time of tax filing relates to phone upgrades and tax deductions. This article provides useful tax tips regarding your eligibility.
There are ...
[Read More]For Business owners: You can deduct as many business gifts as you like. The amount of deduction is limited to $25 per gift recipient per year. So if you gift to six different people, the total business tax deduction would be $150.
Year-end tax planning checklist for individual taxpayers
Year- end tax planning tips for high income earners
1) Accelerate deductions: Accelerate deductions in December to take the deduction in the current year. However, be aware of the items that may be subject to Alternate M...
[Read More]Below are few major highlights for Corporations/ Businesses.
Below are the tax deadlines for businesses and individual tax filers.
Form 2018 Filing Due Date (Tax Year 2017)
Form W-2 (electronic or mail) January 31s...
[Read More]For Businesses & Corporations
As a business owner, you may be hiring independent contractors for your business. If you have paid any amount greater than $600 during the calendar year, you may be required to file a FORM 1099-MISC with IRS. A copy is sent to the contract...
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It’s the time of the year when many of you are searching for a tax professional to help file your taxes. It is extremely important to choose your tax professional wisely.
As a taxpayer, you are responsible for all the information on the tax returns. S...
[Read More]Stock brokers, lenders and employers will start sending you the tax forms and statements by January 31st. The Internal revenue service (IRS) gives companies time until January 31st to mail out these statements. Many currently send it out electronically instead of postal mail. The following are th...
[Read More]Tax credits help reduce the amount of tax you owe. A refundable tax credit allows you to reduce your overall tax liability and it can also result in a refund.
The new tax law suspends the moving expenses deduction for tax years beginning after December 31, 2017 and goes through January 1, 2026. During this timeframe, there is no deduction allowed for use of an automobi...
[Read More]Employee vs Contractor – which is the right classification?
As a business owner, you may require hiring an expert to help you with various projects. Many employers classify employees as contractors that t...
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