Ask a CPA

Simply stated, an S Corporation is taxed in the same manner as a partnership and is not taxed at the federal level. The income or losses and expenses flow through to the shareholders. A "C" Corporation pays tax on its profits and when the owner shareholders take profits from the corporation, the distributions take the form of taxable dividends. In effect, this is a double taxation of profits. There are advantages and disadvantages to both S Corporations and Regular C Corporations. Speak to your local CPA about the tax strategies of selecting the type of entity for your business.

Simply stated, a S Corporation is taxed in the same manner as a partnership and is not taxed at the federal level. The income or losses and expenses flow through to the shareholders. A "C" Corporation pays tax on its profits, and if the owner shareholders take profits from the corporation, the distributions take the form of taxable dividends. In effect, this is a double taxation of profits. There are advantages and disadvantages to both S Corporations and Regular C Corporations. Speak to your local CPA about the tax strategies of selecting the type of entity for your business.

No. A Trust must use a calender tax year.

When inventories are used in a business, the Accrual method of accounting must be used for purchases and sales.

There is no gain or loss recognition on a trade-in of an automobile used in your business. Generally, the basis of the new auto is the adjusted basis (cost minus prior depreciation) of the old car plus any additional payments.

The best source document to use is a calendar diary. Enter the odometer readings at the beginning and at the end of each trip. Enter any actual auto expenses incured on the trip. At the end of the year you may be able to optimize between the higher of the actual or mileage rate expenses. Enter the names of the company or the people you met with. Enter the business purpose of the trip. Enter any meal or entertainment and other miscellaneous expenses incurred in addition to using your car.

Deductions for business gifts to customers or clients are limited to $25 per recipient, per year. Keep receipts for all gifts you give for business purposes. These receipts will help you to prove your deductions if you are ever audited. Track your business gifts throughout the year so you don't have to go through all of your receipts individually at tax time. You should record who the gift was given to, what that person's relationship is to your business and how much the gift cost.

Sporting event tickets are considered an entertainment expense, if you accompany them. The deduction for a business gift is limited to $25 per person per year.
Generally, the amount allowable as a deduction for meals and entertainment expenses is limited to 50% of such expenses.

The address is www.sba.gov

The address is www.irs.gov