Blog Archives

IRS Proposes Elimination of Automatic Filing Extensions for W-2 Forms

I tend to harbor deep resentment whenever the IRS proposes more restrictions on job creating taxpayers. After all WE are the backbone of the US economy and our government agencies absolutely must focus on mitigating obstacles for hard working entrepreneurs in their

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Posted in Employment Tax, FICA, Payroll Tax Problems, Small Business, W-2

Why to Revoke An S Election and How to Do It – Internal Revenue Code Section 1362(d); Reg § 1.1362­6(a)

Many entrepreneurs get caught up in selecting the "most appropriate business structure" - particularly people planning to conquer the moon right out of the gate. If this is you beware as business structure is a determination that is best driven out

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Posted in Employment Tax, Entity Classification, Paying Taxes, Payroll Tax Problems, Penalty, Small Business, Social Security, Social Security Tax, Sole Proprietor, Start up costs, Sub-chapter S, Tax Abuse, Tax Guidance & Preparation, Tax Problems & Requests

LLC Income is INDEED Subject to Self Employment Tax: IRS Chief Counsel Advice 201436049

In 1997, the IRS issued proposed regulations governing when the distributive share of partnership income for Limited Liability Company (LLC) members was to be included in self-employment income. It basically advised that an LLC member would be treated as a

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Posted in Employment Tax, Entity Classification, Limited Partnership, LLC, Material Participation, Passive Activity, Payroll Tax Problems, Small Business, Social Security Tax, Taxable Income, Uncategorized

IRS Form 1099-misc Filing Requirements Defined as per IRC 6041

I was talking with a taxpayer the other day who registered as an LLC with Colorado Secretary of State. She developed an intriguing business model that is doing remarkably well according to the financial statement. As part of a tax

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Posted in Business Expense, Business Income, Cash, Cash Transaction, Employee Business Expense, Employment Tax, Entity Classification, FICA, Income, Independent Contractor, Payroll Tax Problems

Can You Establish a SEP Plan if you are a Sole Proprietor? What if that Sole Proprietorship Had Historically Passive Income?

Regardless of their nature or topic matter, off beat questions are one of the spices of life. When it comes to the realm of taxation generally speaking the answers frequently distill down to - it depends. These two questions were

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Posted in Business Expense, Deductible Expense, Employee Business Expense, Employment Tax, Partnership, Passive Activity, Payroll Tax Problems, Self Employ, Sole Proprietor, Sub-chapter S, Tax Deductible Expenses, Unemployment

Worker Classification & the Colorado Department of Labor & Employment

The Perturbing New Treatment of Patents Under the Tax Cut & Jobs Act (TCJA)

Worker Classification & the Colorado Department of Labor & Employment This post is about my experiences as they pertain to the Colorado Employment Security Act of 2013.  First off let me start by saying that there are some really good hard

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Posted in Colorado Department of Labor & Employment, Employment Tax, FICA, Payroll Tax Problems, Small Business, Tax Guidance & Preparation, Tax Problems & Requests, Unemployment

Withholding Tax for Social Security Goes to 6.2% of Wages

Contrary to the manufactured 'news' dribbling out of the main stream media to sell advertising, last week the IRS published updated employer's withholding guidance clearly stating that employers are to now withhold Social Security tax at the rate of 6.2 percent of wages rather

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Posted in Employment Tax, FICA, Paying Taxes, Payroll Tax Problems, Self Employ, Small Business, Sole Proprietor, Sub-chapter S, Tax Guidance & Preparation, Tax Problems & Requests

The ‘Fiscal Cliff’ and Your Tax Obligations

Our esteemed President has proven to me to be extraordinarily disingenuous with his statements about the middle class and their purported tax obligations as pretty much everyone's taxes will go up in 2013 as a direct result of the cumulative

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Posted in Capital Gain, Charitable Contribution, Children, Earned Income Tax Credit, Education Expense, Estate Tax, Paying Taxes, Payroll Tax Problems, Self Employ, Small Business, Social Security Tax, Tax Filing Status, Tax Guidance & Preparation, Tax Preparer, Tax Problems & Requests, Tax Relief, Taxable Income

Service Fee v. Tip – IRS Guidance to Examiners

Business Entity Selection and the Tax Consequences of Converting

According to IRS administrative guidelines to its examiners concerning Rev. Rul. 2012-18, published in the 2012-26 Internal Revenue Bulletin, when performing a tip examination (aka audit), IRS examiners must ensure that service fees or charges are properly characterized as wages and

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Posted in Audit Technique Guide, Business Expense, Disallowed Expenses, Employment Tax, IRS Enforcement, IRS Examination, Payroll Tax Problems, Tax Guidance & Preparation, Tax Problems & Requests, Taxable Income, Uncertain Tax Position

US Treasury SS-8 Determination of Worker Status for Purposes of Federal Employment Tax

Business Entity Selection and the Tax Consequences of Converting

In my dealings with the US Treasury Department regarding worker classification disputes I have learned that although in reality there may be shades of gray distinguishing between what constitutes an employee and what constitutes an independent contractor the US Treasury

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Posted in Appeals & Audit Resolution, Audit Reconsideration, Business Expense, Employee Business Expense, Employment Tax, FICA, Payroll Tax Problems, Self Employ, Small Business, Sub-chapter S, Tax Guidance & Preparation, United States Treasury, Worker Classification
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