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Small Business

EIN Question

Asked Tuesday, September 21, 2021 by Teri O.

You both can be right. In my opinion, the answer depends how the practice purchase/sale is structured. If you are buying the assets of the practice, then you are right, you need to get a new EIN for your LLC that is buying the practice. On the other hand, if you are buying the seller’s LLC, then you can keep the same EIN that currently belongs to the seller.

Just to let you know, if you are investing the big bucks to purchase a practice, you need to have an attorney and a CPA in your corner, to look out for your best interests. If you don’t, you could easily find yourself in a situation where you are saving a few dollars by not paying professional fees, but you could be losing much, much more because you didn’t do things right or overlooked something.

As a certified public accountant (CPA), I am available to help on a consulting basis now and an ongoing basis going forward for taxes, bookkeeping, etc.

if you found this free advice helpful, please leave me a review, either through Google (search for Adam Dickreiter or by using the following link https://g.page/adam-dickreiter-cpa-pllc/review?gm) or through this website (CPAdirectory).

Answer Provided by: personimage Adam Dickreiter

Small Business

Inactive LLC Inquiry

Asked Friday, June 25, 2021 by Joel C.

As a CPA, I came across this website and joined just last week, and I just came across your question.

To provide a complete and accurate answer, one would need to know more details about your situation.

First, how many owners have there been for the LLC from 2017 to 2020? Second, if this a situation where the LLC is owned by a married couple? Third, did you ever make any election to determine how the LLC would be taxed for federal income tax purposes? Its classification (disregarded entity, partnership, C corporation, S corporation) for federal income tax purposes would determine whether or not you should have been filing separate federal income tax returns for this LLC.

Besides considering federal income tax returns, you would need to consider state income tax returns or annual reports (depending on the state in which the LLC was created, as you did not provide that detail). It is often the case that returns or reports need to be filed with a state each year, even if it was inactive and even if you are required to file a federal income tax return.

So, yes, there very well could be penalties involved for not filing. However, more needs to be known to make that determination.

Feel free to contact me if you wish to engage me to help you.

Answer Provided by: personimage Adam Dickreiter

Small Business

Selling Personal Stock to Fund Buisness?

Asked Thursday, June 17, 2021 by Joshua B.

As a CPA, I came across this website and joined just last week, and I just came across your question.

Unfortunately, no, you will not be able to avoid the tax on capital gains. As you know, as long as you own the stock, you don’t pay any tax on unrealized gains. When you sell stock, you realize gains and pay tax. There is not an exception to that rule, just because you’re using the proceeds to purchase assets for a business.

Trying to think outside the box, even if you could contribute the stock to a business of yours and manage to get tax-free treatment on the contribution of the stock to the business, you’d still run into the same problem when the business tried to sell the stock to get the money to purchase assets. In that case, the business would have to either pay tax itself (at its marginal tax rate) on the capital gains or pass the gains to you and you’d have to pay the tax (depending on how the business was structured for federal income tax purposes).

It’s great that you’re trying to be proactive and find a way to save taxes, but I don’t think it’s a go this time.

Even though you cannot avoid the tax on the capital gains, you should consider depreciation on the assets your purchase for the business. That might help offset some of the tax on your gains. Just a thought.

I wish you the best in your endeavors.

Answer Provided by: personimage Adam Dickreiter

Small Business

DBA or LLC

Asked Saturday, May 29, 2021 by Andrea B.

As a CPA, I came across this website and joined just last week, and I just came across your question.

If you are limiting your choices to either a dba or an LLC, then I would recommend an LLC, for three reasons.

First, an LLC gives you some legal liability protection if you are ever sued. A dba does not give you any legal liability protection.

Second, from a tax perspective, both a dba and an LLC would be taxed the same (for federal income tax purposes), assuming that you did not make any election to treat the LLC differently. However, having an LLC gives you the option to elect to treat the company as an S corporation. You don’t have that optionality with a dba. Keep in mind that making the S election for the LLC would require that you file a separate federal income tax return for the business each year. However, the tax savings that an S corporation election can afford could make it worthwhile, especially because it sounds like you intend to grow the business.

Finally, the LLC probably gives your business a little more legitimacy and professionalism, in the public’s eye.

Consider that you could choose the LLC and have the LLC get the dba – the best of both worlds. So you don’t necessarily have to treat this decision as one where you must choose one or the other.

I congratulate you on planning for the future. If you wish to engage me to help, please feel free to reach out to me.

Answer Provided by: personimage Adam Dickreiter

Small Business

S corp questiob

Asked Monday, March 15, 2021 by Anne S.

As a CPA, I came across this website and joined just last week, and I just came across your question.

Unfortunately, yes, you need to file a Form 1120S, which will include the Schedules K and K-1 for 2020. S corporations must file a return every year, whether or not there is any activity. Don’t forget about any state return, such as a state income tax return, franchise return, or annual report. Feel free to contact me if you wish to engage me to help.

Answer Provided by: personimage Adam Dickreiter

Minimum Wage

Arkansas

Asked Monday, December 30, 2013 by an anonymous user
For 2014, the minimum wage is $6.25.
Tax Question Answered By CPAdirectory
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Minimum Wage

Arizona

Asked Monday, December 30, 2013 by an anonymous user
For 2014, the minimum wage is $7.90.
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Minimum Wage

California

Asked Monday, December 30, 2013 by an anonymous user
For 2014, the minimum wage is $9.00.
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Minimum Wage

Colorado

Asked Monday, December 30, 2013 by an anonymous user
For 2014, the minimum wage is $8.00.
Tax Question Answered By CPAdirectory
Answer Provided by: CPAdirectory