The Benefits of Paying a Child on a W-2

A business owner hired his 15-year-old daughter to work in his single-member LLC business.  She is expected to be paid about $12,000 for the year.  What are the benefits of paying her on a W-2 A single-member LLC is a “disregarded entity” for federal tax purposes.  It is taxed as a sole proprietorship unless corporate … Read more

IRS Provides Some Welcome Relief and Increases the Standard Mileage Rate

When the IRS noticed that gas prices across the country went beyond, $5.00 a gallon, it took action.  Small businesses that use the standard mileage rate can now deduct 62.5 cents per business mile from July 1 through December 31, 2022.  This means additional 4 cents a mile from 58.5. The next question is:  what … Read more

Do Partner and LLC Members Need to Pay Self-Employment Taxes?

The outright answer to the question above is not always clear, even if millions of American businesses legally organize themselves as limited liability companies (LLCs), partnerships, or similar entities.  This article will try to provide the answer. What about General Partnerships? If two or more people own a business together and do not form another … Read more

How to get 100% deduction for business meals in 2021

IR-2021-79, April 8, 2021 WASHINGTON — The Treasury Department and the Internal Revenue Service today issued Notice 2021-25 PDF providing guidance under the Taxpayer Certainty and Disaster Relief Act of 2020. The Act added a temporary exception to the 50% limit on the amount that businesses may deduct for food or beverages. The temporary exception to the business … Read more

Considering a Low-Tax State? Consider more than just Federal Taxes

When choosing a new state, consider all applicable taxes and save taxes when moving. There may be different reasons why a person or family would uproot themselves from their homes and move to another state.  If the move is due to work and the company is giving a choice between two states, it is a … Read more

How to Maximize College Room and Board Expenses in a 529 Plan

Can 529 Plan funds be used to pay for OFF-CAMPUS Room & Board?  Here is your guide. A 529 plan is a tax-advantaged savings plan designed to encourage saving for future education costs. 529 plans, legally known as “qualified tuition plans,” are sponsored by states, state agencies, or educational institutions and are authorized by Section … Read more

A Payroll Tax Strategy for Children Under an S Corporation

Are corporation owners stuck with paying payroll taxes for their kids?  Or is there another way around it? Teaching children basic life skills is a must for every parent.  Business owners who employ their children get to teach their children about entrepreneurship, how to develop good work ethics, and even get child and the business … Read more

News and Update Alert

 — The IRS announced on Jan. 15, 2021  that the official federal e-file start date for tax year 2020 will be Feb. 12, 2021   All clients are encouraged to submit their documents to the client portal (Proconnect Link) as soon as possible. If you have not received your invitation to Link please use the CONTACT … Read more

Home Office Deduction the Smart Way!

Can a home office deduction claim be filed if some former personal assets are now used for business?  The answer is yes. The COVID-19 pandemic has changed the way people work.  Instead of being in a fancy corner office on top of a large skyscraper, people find themselves “WFH” or working from home and curious … Read more