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Does Your Business Need to Charge Out of State Customers Sales Tax?

“Nexus” determines whether your business must collect and remit sales tax in another state.If you have nexus, you must collect.Nexus is a Latin word meaning connection.Sales tax nexus occurs when your business has some kind of connection to a state.Until this connection is established a state cannot require you to register and collect sales taxes.

So, what creates nexus?The answer to that question changed last year in a historic landmark case when the Supreme Court in South Dakota v. Wayfair overturned a 1992 court case Quill v. North Dakota. If you’re not familiar with this case then you need to keep reading, because it will have a huge impact on business owners.
What was the South Dakota v. Wayfair case all about? Before the Wayfair decision in June 2018, Quill served as the precedent for sales tax nexus. Under Quill, businesses had to have a physical presence (e.g., office, store, warehouse, employees, independent contractors, inventory storage, etc.) in the state before the state …

How to Deduct Home Office Expenses in an S Corporation

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A large number of small S corporations use the home office of one of the shareholders (or the sole shareholder) as their principal business office, which is used exclusively and regularly for corporation business.

The costs related to this home office can be handled for tax purposes in a number of different ways, but generally the easiest method and the one that results in the most favorable tax treatment for the corporation/shareholder is for the corporation to reimburse the shareholder under an accountable expense reimbursement plan. Under this arrangement, the corporation will reimburse the shareholder for the home office costs on a monthly or other agreed upon basis. The amount the corporation pays is a deductible business expense, and, because the reimbursement is under an accountable plan, the reimbursement is not included in the taxable income of the shareholder.

As an accountable expense reimbursement, the shareholder must keep track of the actual expenses of maintaining the o…

1099-Misc Filing Requirements and Penalties for 2018

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It’s a new year and that means 1099 season is here!  I hope you have been collecting those W-9 forms from people because the IRS is cracking down on 1099 reporting.   
If you don’t have W-9 forms signed and filled out, I suggest you start working on collecting those NOW...otherwise be prepared for possible penalties this year.

What’s New

Beginning last year, the IRS changed the deadline for filing government copies of 1099-Misc forms to January 31st.  In case you weren’t aware the OLD deadline for most was February 28th (March 31st if filing electronically).  That means 1099 preparers have one to two less months to get the information required to prepare these forms this year.
The IRS has always required the filing of 1099-Misc forms and there have always been penalties for not filing and filing late.  What’s new is that beginning last year the IRS started enforcing those penalties.  A few of our clients who self-prepare their 1099’s received large penalties for late filing last year; mos…

8 Scenarios on How the Tax Bill Will Affect You

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We have just seen the biggest tax overhaul in 30 years.  
The final version rewrites the tax code in dozens of ways, eliminating deductions, changing rates, and creating brand new benefits for certain taxpayers, such as business owners. 
With 479 pages of brand new tax law how can you know how the tax bill will affect you and your family?
How exactly would these changes affect me?
It depends on where you live, what you do and how big your family is. You're more likely to get a tax increase if you live in a high-tax state or lean heavily on deductions—such as unreimbursed employee expenses—that will be eliminated under the bill. 
To see how Americans fare across different incomes and circumstances, Bloomberg turned to Tim Steffen, director of advanced planning at Baird Private Wealth Management.
His eight scenarios examine only 2018 wage and pass through income from an S corp or partnership that you own and how taxes owed on those earnings would change when tax time comes around in 2019.…

How Does the New Tax Plan Affect Me?

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Many of you are asking where we stand on tax reform for next year and how will it affect your taxes.   Here is what we know right now… 2017 Tax Reform: Key differences between the Senate and House tax bills The Senate and the House have each passed their own version of the “Tax Cuts and Jobs Act.” The two versions of the bill have many similar provisions, but they also have a number of key differences that will have to be reconciled by the Conference Committee as the two bills are merged into a single piece of legislation. It is unclear at this point how these differences will be resolved.  There is a general inclination that the Senate's provisions carry slightly more weight since the Senate is subject to budgetary restraints as part of the reconciliation process and there is less flexibility to make changes to their bill. The House voted on December 4 to go to conference with the Senate to reconcile the two bills and the Senate is expected to name conferees later in the week. There …