As published in the Winter Park/Maitland Observer, Thursday Jan. 3, 2012 Edition Offers... Read More »
Articles in category 'Self-Employed Taxpayers'
Advice to Would-Be Schedule C Filers: “DON’T”
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…
Read Full Article Categorized in: Business advice, C Corporations, S Corporations, Self-Employed Taxpayers, Tax TipsIRS to Pursue Non Filing Businesses
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…
Read Full Article Categorized in: C Corporations, IRS Audits, S Corporations, Self-Employed Taxpayers, Unfiled ReturnsMay Tax Advisors tell their Clients to Form S Corporations to Reduce Their Chances of Audit
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…
Read Full Article Categorized in: IRS Audits, S Corporations, Self-Employed TaxpayersRepeal the New 1099 Law
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…
Read Full Article Categorized in: Business Transactions, C Corporations, IRS Procedure, S Corporations, Self-Employed TaxpayersTax Court Update: An IRS Agent Fails to Corroborate her eBay Expenses
In a summary opinion issued yesterday the Tax Court held that an IRS revenue officer failed to substantiate expenses she claimed in her eBay business.¹ Below is an excerpt from the Court’s opinion in Orellana v. Commissioner, T.C. Summ. Op. 2010-51 (Apr. 20, 2010). The IRS agent/taxpayer’s admissions are stunning (emphasis added): Petitioner argues that she was…
Read Full Article Categorized in: Gross Income, Self-Employed Taxpayers, Tax CourtIRS Targets Schedule C Filers
We didn’t need it, but here is more evidence that self-employed individuals should incorporate or form an LLC. WebCPA reports that the IRS is intensifying it’s scrutiny of Schedule “C” filers (i.e. sole proprietorship): Estimates by the IRS show that $68 billion of the $345 billion tax gap in 2001 was due to the underreporting of income…
Read Full Article Categorized in: Self-Employed Taxpayers, Tax TipsEstimating Schedule “C” Expenses Using BizStats
Thursday, October 15th, is the last day taxpayers can file their 2008 individual income tax returns without incurring a late filing and late payment penalty. But what do you do if you don’t have all of the information necessary to complete your return? Many unincorporated, self-employed taxpayers fail to keep adequate books and records from which a business…
Read Full Article Categorized in: Deductible Expenses, News, Self-Employed TaxpayersHome Office? Is it a Good Idea?
In May I wrote a post titled 59 Tips for the Self Employed in which I suggested that new business owners not work from their homes so as to avoid distractions like the refrigerator, the T.V. and the bed. Many readers and most of my fellow tax bloggers disagreed with me. Now here comes Matthew Bandyk of U.S. News & World…
Read Full Article Categorized in: Self-Employed TaxpayersTax Advice, Legal Advice & Piercing the Corporate Veil
June Walker, an unenrolled tax preparer, writes a blog subtitled Tax & Financial Advisor to the self-employed since 1979. In a recent post she advises her business clients to commingle their business funds with their personal funds. You read that write right: She advises the commingling of funds. Listen: You need only one checking account.…
Read Full Article Categorized in: Self-Employed Taxpayers6 Tips for New Small Business Owners
California tax blogger Mitchell Port writes about the top six things the IRS wants you to know before starting a new business: I especially liked #4: Good records are necessary. Which record keeping system is suited to your business is up to you so long as it shows your income and expenses. Except in a few…
Read Full Article Categorized in: Self-Employed TaxpayersIRS Announces Special Tax Breaks for Small Business
The IRS has issued announced IR-2009-51 summarizing the tax breaks made available to small businesses and the self-employed under the American Recovery and Reinvestment Act (“ARRA”). Here’s the preamble: Small Business Week is May 17 to 23, and the Internal Revenue Service urges small businesses to act now and take advantage of tax-saving opportunities included in…
Read Full Article Categorized in: Announcements, Self-Employed Taxpayers59 Tips for the Self-Employed
Getting Started 1. Incorporate Don’t operate as a sole proprietorship 2. Hire a professional bookkeeper 3. Outsource your payroll 4. Buy an accounting software package 5. Attend local new business owner courses 6. Don’t hire your relatives 7. Think twice 8. Don’t start a business just because you have a cool sounding name for…
Read Full Article Categorized in: Self-Employed TaxpayersFamous Last Words From the Self-Employed Taxpayer With IRS Problems
The IRS estimates that more than 30,000,000 U.S. taxpayers have some sort of tax compliance or collection problem. The problems include unfiled tax returns, a pending federal tax liens, and failure to file information returns. But by far the most frequent and serious problem we see is the self-employed taxpayer who has failed to file his tax returns…
Read Full Article Categorized in: Self-Employed Taxpayers