Ask a CPA

Deductions and Write-Offs

Mileage

Asked Wednesday, September 03, 2025 by Heather

Hi! My company either pay for gas when I travel for site visits or mileage reimbursements. They said if I do the gas option I can claim my mileage on my taxes and get more money back verses having the company pay for my mileage. Which is better

Tax Forms

Gift tax on donor and receiver

Asked Friday, August 29, 2025 by Tianxue

If a donor writes me a $900,000 check and I deposit it into my personal bank account, do neither of us need to pay taxes? Does only the donor need to file a Form 709 with the IRS because the amount is below the $13.99 million lifetime exemption, so it won’t trigger any tax for the donor? Also, since this money is not considered income for the recipient, does that mean the receiver doesn’t need to report or pay taxes on it? Additionally, for a gift of this nature, is it better to have written doc

Retirement

How to fix an excess contribution to a SEP IRA

Asked Thursday, August 28, 2025 by Lisa

In '25, I contributed too much to my personal SEP IRA for '24. I had part of the excess recharacterized as a trad. IRA contrib for '25 and am using a form to withdraw the remaining excess. All seems clear except I have to choose a correction method- IRC404(h) or EPCRS. Which do I choose? What happens if I choose incorrectly? Will there be other documents or forms required later depending on my choice? (I filed for an extension for '24 taxes. I will not have any self-employment income in '25.)

Personal Taxes

Receiving income as Contracted status

Asked Wednesday, August 27, 2025 by Chris

I have contracted with a company for services and am receiving an income. I need to find out my tax liability for this income. Does it become part of my other income and reported with my income taxes? Do I owe quarterly taxes on it? It is not my only source of income. I am over 72 years old.

Bookkeeping & Write-up

Due To Due From

Asked Tuesday, August 26, 2025 by Theo

Hello, I have 2 companies with frequent inter-company transactions ranging from payments to vendors to xfers to cover payroll. Company A has both a Due to and Due From accnt for Company B and vice versa. I have been told that this is unnecessary and that I only need a Due To account and am able to record all transactions between the two companies under the Due To. Is this correct?

CPA Answer:

Business Formation

Is there a tax efficient single member patent holding company structure?

Asked Monday, August 25, 2025 by Earl

I am creating a patent holding co. responsible for monetizing my patents. I plan to create a single member LLC and assign the patents to the LLC. If the LLC sells the patents or enters an exclusive license, I will be able to take advantage of capital gains tax rates. But the more likely scenario is a non-exclusive license with a lump sum royalty taxed at ordinary income tax rates (37%) plus SE tax, etc. Is there a better structure that will let me keep more of the royalties?

Tax Forms

Non-resident Tax

Asked Tuesday, August 19, 2025 by Koyo

I am a non-resident LLC owner with my agency residing in Wyoming. I would like to hire CPA for the following documents: Form 5472, Pro Forma Form 1120, and W-8BEN-E (to file for U.S.–Japan tax treaty). I would like to know how much hiring one would cost; does it depend on the person? Since I am non-resident, I am wondering how I can best find the person. Thank you very much for your support and looking forward to hearing back. Best, Koyo Asakawa

Deductions and Write-Offs

New Car Deduction

Asked Tuesday, August 12, 2025 by Mary Sue

Hello, I was wondering if I can deduct a portion of the cost of a new car purchase under section 179 if I have a sole proprietorship and will be using the car 60% of the time for business meetings, site visits, and client meetings?

Investment and Finance

Interest income from a CD - Cash or Accrual accounting?

Asked Tuesday, August 12, 2025 by San

If I open a standard 1 year bank CD on 8/20/2025, and it matures on 8/19/2026, with interest paid *only* at maturity. The bank however compunds the interest monthly and "credits" it to the balance every month. But I will not actually receive any interest in hand until maturity. Contract is clear - if I close the CD on 5/8/2026, zero interest will be paid, and I'll only get principal back. So is income tax due on 4 mths of interest "credited" in 2025? Or is all 12 mth of interest taxed in 2026?

Business Formation

LLC, Corporation, or SCorp

Asked Friday, August 08, 2025 by Eric

Im running a small home business. I make crafts to sell on etsy and am making about 15K per year in additional income. My question is at this volume, does it make any sense to form an LLC, Corporation, or Scorp for my side hussle?