Choosing a Business Entity
Posted on October 2nd, 2020
When you decide to start a business, one of the most important decisions you’ll need to make is choosing a business entity. It’s a decision that impacts many things—from the amount of taxes you pay to how much paperwork you have to deal with and what type of personal liability you face, and with the passage of the Tax Cuts and Jobs Act of 2017, it’s more important than ever to choose the business entity that benefits your business.
Tags: Business Entity, Self-Employment, Small Business
Ask Bob: Should My Business Be an S Corporation? 6 Myths and Facts
Posted on September 25th, 2020
CPA Robert Russo Breaks Down the Question: Should My Business Be an S Corp?
Ever since the Tax Cuts and Jobs Act was signed into law in late 2017, the team at Robert P. Russo, CPA has been getting questions about which business entity will allow them to best take advantage of the law. One question that keeps coming up is: should my business be an S corp? We get this question from LLCs and sole proprietorships – even employees wondering if now’s the time to launch that startup.
The answer to “should my business be an S corp”? It depends. There are benefits to becoming an S corporation (taking a distribution of dividends exempt from self-employment tax). But there are also pitfalls – if you don’t follow S corp requirements (take too large a distribution, and you could hear from the IRS).
Tags: Business Entity, Self-Employment, Small Business
Tax Tips for Workers in the Gig Economy
Posted on September 2nd, 2020
The gig economy, also called sharing or access economy, is defined by activities where taxpayers earn income providing on-demand work, services, or goods. This type of work is often carried out via digital platforms such as an app or website. There are many types of sharing economy businesses including two of the most popular ones: ride-sharing, Uber and Lyft, for example, home rentals such as Airbnb, and TaskRabbit. Read More…
Tags: Gig Economy, Real Estate, Self-Employment
4 Tax-Saving Provisions for S Corporations Under COVID-19
Posted on May 7th, 2020
To help your small business, Congress created a lot of new tax-saving provisions due to the COVID-19 pandemic.
Many of my clients own and operate S corporations and expect the tax law to treat them differently, as it does with their health insurance deduction.
Perhaps you, too, would like us to help clarify which of the COVID-19 tax benefits the S corporation owner can use to put cash in his or her pocket. Here’s a list as of 5/6/2020. Read More…
Tags: Business Entity, Coronavirus, COVID-19, Loans, Self-Employment
Self-Employment COVID-19 Relief and Tax Benefits
Posted on May 6th, 2020
If you are in business for yourself—say, as a corporation or self-employed—payroll taxes and self-employment taxes are likely two of your biggest tax burdens.
Here’s some possible good news: Congress decided to give you significant relief from these taxes due to the COVID-19 pandemic. We’ll tell you what relief options are available and whether or not you qualify. Read More…
Tags: Coronavirus, COVID-19, Deductions, Self-Employment, Tax Credits, Tax Tips
Don’t Miss Out! 7 Tips to Ensure Your Business Earns the 20% QBI Tax Deduction
Posted on December 17th, 2018
What is the 20% QBI Tax Deduction?
In the tax world – and at Robert P. Russo, CPA – everyone is talking about QBI. QBI stands for qualified business income, and it’s the key to unlocking a very nice 20% QBI tax deduction for certain business owners. Read More…
Tags: 2018 Tax Law, Accounting, Deductions, Self-Employment
Tax Benefits of S-Corporations — 2018 Tax Law
Posted on July 6th, 2018
As a small business owner, figuring out which form of business structure to use when you started was one of the most important decisions you had to make; however, it’s always a good idea to periodically revisit that decision as your business grows. For example, as a sole proprietor, you must pay a self-employment tax rate of 15% in addition to your individual tax rate; however, if you were to revise your business structure to become a corporation and elect S-Corporation status you could take advantage of a lower tax rate. Read More…
Tags: 2018 Tax Law, Entrepreneur, Self-Employment
The Home Office Deduction: What’s New — July 2018
Posted on July 5th, 2018
Self-employed taxpayers who use their home for business may be able to deduct expenses for the business use of it. Qualified persons can claim the deduction whether they rent or own their home and can use the simplified option or the regular method to claim a deduction. Read More…
Tags: Deductions, Self-Employment
Self-Employed? Five Easy Ways to Lower your Tax Bill
Posted on April 30th, 2018
If you’re like most small business owners, you’re always looking for ways to lower your taxable income. Here are five ways to do just that.
1. Deducting the Cost of a Home Computer
If you purchased a computer and use it for work-related purposes, you can take advantage of the Section 179 expense election, which allows you to write off new equipment in the year it was purchased if it is used for business more than 50 percent of the time (subject to certain rules). Read More…
Tags: Expenses, Self-Employment
Need To File A Tax Extension? Don’t Wait.
Posted on April 2nd, 2018
If you’ve been procrastinating when it comes to preparing and filing your tax return this year you might be considering filing an extension. While obtaining a 6-month extension to file is relatively easy — and there are legitimate reasons for doing so — there are also some downsides. If you need more time to file your tax return this year, here’s what you need to know about filing an extension.
Tags: Late Filing, Self-Employment, Travel, Working Abroad
Understanding Estimated Tax Payments
Posted on April 1st, 2018
Estimated tax is the method used to pay tax on income that is not subject to withholding. This includes income from self-employment, interest, dividends, and rent, as well as gains from the sale of assets, prizes and awards. You also may have to pay estimated tax if the amount of income tax being withheld from your salary, pension, or other income is not enough.
FILING AND PAYING ESTIMATED TAXES
Both individuals and business owners may need to file and pay estimated taxes, which are paid quarterly. In 2018, the first estimated tax payment is due on April 17, the same day tax returns are due. If you do not pay enough by the due date of each payment period you may be charged a penalty even if you are due a refund when you file your tax return.
Tags: 2018 Tax Law, Entrepreneur, Late Filing, Record Keeping, Self-Employment
What Income is Taxable?
Posted on March 1st, 2018
Are you wondering if there’s a hard and fast rule about what income is taxable and what income is not taxable? The quick answer is that all income is taxable unless the law specifically excludes it. But as you might have guessed, there’s more to it than that.
Taxable income includes any money you receive, such as wages and tips, but it can also include non-cash income from property or services. For example, both parties in a barter exchange must include the fair market value of goods or services received as income on their tax return.
Nontaxable Income
Here are some types of income that are usually not taxable:
- Gifts and inheritances
- Child support payments
- Welfare benefits
- Damage awards for physical injury or sickness
- Cash rebates from a dealer or manufacturer for an item you buy
- Reimbursements for qualified adoption expenses
In addition, some types of income are not taxable except under certain conditions, including: Read More…
Tags: Bookkeeping, Self-Employment, Small Business, Withholding
Tips for Getting Paid on Time
Posted on March 1st, 2018
For many business owners, collecting on your accounts receivables can be challenging especially as more people switch from established collection procedures to online payment methods. The good news is that you can take positive action to improve collection rates, shorten the aging days of your accounts receivable, help your business improve its cash flow and tighten up its credit and collections policies. While some of the tips discussed here may not be suitable for every business most can serve as general guidelines to give your company more financial stability.
Define Your Policy. Define and stick to concrete credit guidelines. Your sales force should not sell to customers who are not credit-worthy, or who have become delinquent. You should also clearly delineate what leeway salespeople have to vary from these guidelines in attempting to attract customers.
You should have a system of controls for checking out a potential customer’s credit, and it should be used before an order is shipped. Further, there should be clear communication between the accounting department and the sales department as to current customers who become delinquent.
Clearly Explain Your Payment Policy. Invoices should contain clear written information about how much time customers have to pay, and what will happen if they exceed those limits.
Tags: Accounting, Bookkeeping, Cash Flow, Self-Employment, Small Business, Solopreneur
The Basics of Starting a Home-Based Business
Posted on January 25th, 2018
More than half of all businesses today are home-based. Every day, people are striking out and achieving economic and creative independence by turning their skills into dollars. Garages, basements, and attics are being transformed into the corporate headquarters of the newest entrepreneurs–home-based business people.
And, with technological advances in smartphones, tablets, and iPads as well as rising demand for “service-oriented” businesses, the opportunities seem to be endless.
Tags: Cash Flow, Self-Employment, Small Business, Solopreneur
Small Business: Be Alert to Identity Theft
Posted on January 10th, 2018
Small business identity theft is a big business for identity thieves. Just like individuals, businesses may have their identities stolen, and their sensitive information used to open credit card accounts or used to file fraudulent tax refunds for bogus refunds. As such, small business owners should be on guard against a growing wave of identity theft against employers.
Tags: Fraud Prevention, Self-Employment, Small Business