Robert Flach announces his publication of a new newsletter for sole proprietors and single-member schedule C filers entitled, aptly enough, The Schedule C Letter: THE SCHEDULE C LETTER is a bi-weekly newsletter that provides tax planning and preparation advice, information, and resources for sole proprietors and one-person LLCs who report their business activity on IRS Schedule C.¹ I have [...]
Tags: Business advice · C Corporations · S Corporations · Self-Employed Taxpayers · Tax Tips
Frequent readers of this blog know that we have maintained - ad nauseum, I am sure, for some – that all small businesses should incorporate or operate as an LLC in part because they are less likely to undergo IRS scrutiny. Well, if you can believe the Government Accountability Office GAO), this may all be about to change. WebCPA [...]
Tags: C Corporations · IRS Audits · S Corporations · Self-Employed Taxpayers · Unfiled Returns
Every year the IRS publishes audit statistics showing that it audits S Corporation returns much less frequently than it audits sole proprietorship (schedule C) returns. Consequently, one of the factors business owners and their advisors have traditionally considered before choosing a form of business is the relative likelihood of IRS scrutiny of the business’s tax return. No surprises there, right? Well, not so fast. Last [...]
Tags: IRS Audits · S Corporations · Self-Employed Taxpayers
The National Association for the Self-Employed reports that the recently enacted Healthcare law will have an onerous record-keeping effect on small businesses: Many of the nation’s entrepreneurs are about to become more familiar with IRS Form 1099. According to a new law set to go into effect in 2012, business owners will be required to submit a [...]
Tags: Business Transactions · C Corporations · IRS procedure · S Corporations · Self-Employed Taxpayers
Because of the prolonged recession we expect to see many businesses report losses from their 2009 operations. Losses from S Corporations are deductible on a taxpayer’s Form 1040 only to the extent of the shareholder’s stock plus debt basis. Tax preparers should maintain the following two worksheets (courtesy Small Business Taxes and Management) for each of their [...]
Tags: Individual Taxation · S Corporations · Tax Tips
As a general rule, S corporations do not pay taxes, but rather their income is reported and taxed on the individual tax returns of their shareholders. However, a corporation that was originally formed as a C corporation is subject to a built-in gains tax on any appreciation in the value of its assets that arose prior to its conversion to [...]
Tags: S Corporations · Tax Tips
There’s been a lot of crazy talk lately among non-lawyer, non-CPA bloggers accusing lawyers and CPAs of advising their clients to incorporate merely to get additional fees. These bloggers offer no evidence to support their claims and merely assume that because lawyers and CPAs sometimes incorporate their clients for a fee that they are advising them to incorporate for [...]
Tags: LLC's · S Corporations · Tax Tips
