Unanswered Tax Questions
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Scorp setup to receive sole prop payments
I have a sole proprietorship with several employees. In business for over 15 years...I want to significantly reduce the amount of self employment taxes that I pay on my profits. My EIN for the sole proprietorship is attached to many things, so for that reason amongst other reasons I do not want to form an S Corp to REPLACE my existing business...My question is am I able to form an S Corp as a separate entity as maybe a consulting company, and have the sole proprietorship pay that consulting company large fees equal to or close to what the sole proprietorship revenues are? I understand that on the S Corp side ill be required to draw a salary and pay payroll tax on the salary but no SE tax on the revenues ..is what I am proposing legal?
Asked Friday, April 21, 2023 by Troy O.Sign in to Answer
LLC query
I started an LLC, sole proprietorship last year. I want to inquire about if I can keep the LLC active. I have not conducted business in the past year and I have no active bank accounts linked to the company and have not gotten an EIN number yet, would I still need to file for taxes for the company. If so could you let me know what is required. Thank you
Asked Thursday, April 20, 2023 by Kendah A.Sign in to Answer
How to write off social purpose gifts made to individuals
We have an S-Corp and do a lot of social works, helping support widows, missionaries, low income people with medical bills, rent, etc. We consider ourselves a Social purpose company and our main purpose in making money is helping others. In doing that we have a VERY large (relative to our net income) number of gifts made. Often our amount given out is more than 50% of what would be otherwise our taxable income. But the vast majority of these gifts are NOT to registered non profits. How could we classify these kinds of things so as to be able to deduct them as expenses (Employee morale? They have a HUGE positive impact on that, but they often run as much or more than our total payroll.) while still not being a huge red flag likely to trigger many audits.
Asked Thursday, April 20, 2023 by John D.Sign in to Answer
Money
If a person filles how long will they have to pay what they owe
Asked Thursday, April 20, 2023 by Stewart J.Sign in to Answer
My dependent was already claimed
For the 2020 tax year my then girlfriend claimed my child before I could making my efiled return come back as rejected and leaving me stuck with the status of single rather than head of household. I still haven't filed the return because I don't know which status I can/should claim and I think I would owe money due to my income for that year and lack of any dependents. If my child's mother had already claimed our child and head of household status but we lived together for that year and we both paid for the expenses of our child, what status am I able to file as and how do I go about filing for that year without my taxes being rejected and without owing a lot of money? My income for that year was close to $48,000 and I went with the standard deduction.
Asked Thursday, April 20, 2023 by Jeramy A.Sign in to Answer
Unique business tax question - Can you help me?
I want to start a business at home. I want to sell t-shirts and hats. My unique selling proposition is that someone buys a hat or shirt from me and I'll donate 50% of the purchase price to a charity that relates to them. I have a full-time job in Oregon. I get a W2 each year. Last year I earned $120,000. My wife does not earn any income. We do not own a home. We have no other sources of income. My business model looks like this: I design a t-shirt or a hat. I price either item at $30. COGS = $8. As part of my sales process, I donate 50% of the $30 to a specific non-profit. $30 retail price $8 COGS $15 non-profit donation $7 profit I’ve been told that I can not write off 100% of the non-profit donation. Can I afford a 50% non-profit donation as part of my selling process and still cover the taxes and make a good living? Is there a formula I can use that will help me understand what selling 1,000 units a month looks like? 5,000 units a month? 10,000 units a month? And 20,000 units a month? Thank you for your help! Jason
Asked Thursday, April 20, 2023 by Jason D.Sign in to Answer
W9 or 1099 required?
Hi! I recently watched someone’s dogs, in my home, while they (the owners) were out of town. The total payment we agreed to (prior to the trip) for my service was over $600. Now, after the trip, at the time of pickup, they are insisting I issue them a w9, or that they give me a 1099. I’m confused because I thought 1099’s and w9’s were only issued in a situation where an individual works for a business (like a producer or a salesman for an insurance company?) but isn’t an employee. I do not work for them, I just watched their dogs when they went out of town. Am I mistaken? What should I do?
Asked Wednesday, April 19, 2023 by Michell B.Sign in to Answer
Shop Warranty Expenses
When a shop covers the parts and labor of a job for a customer due to a mistake, how is that properly entered? 1) the customer needs an invoice showing the parts and labor done. I entered the parts in bills under Warranty Expense and then put them on the invoice as 0qty so they end price would be 0 but they could see what the cost would have been. I entered labor on the invoice and then billed it out to Warranty Expense as well. Sales tax on labor. ____________________________________________________ Other option: I record the parts under Parts Purchased (COGS) like normal. Add them to the invoice like normal with sales tax. Then zero out the entire invoice to Warranty Expense. Which is the proper way to do this entry? Should we charge sales tax on the invoice since it is being covered by the shop and not actually a resale? The parts were purchased under resale tax exempt.
Asked Wednesday, April 19, 2023 by Skye P.Sign in to Answer
Do I need to file taxes I made under $10,000 and I am on disability
Asked Tuesday, April 18, 2023 by Amanda P.Sign in to Answer
1031 Exchange Vesting Requirement
I've owned an investment condo for 20 years and filed all taxes on it under my SSN. In 2015, I filed a quit claim deed (QCD) to change from individual to an LLC in an irrevocable trust. I want to do a 1031 Exchange this year but lender for "to-be-purchased" property will not fund an LLC in irrevocable trust. I will file QCD to change title back to individual name. Will this still be allowable under 1031 rules or trigger taxable event?
Asked Tuesday, April 18, 2023 by Ehren W.Sign in to Answer