Imagine one of your employees falls asleep at the wheel while driving a company vehicle. He causes a serious accident in a populated area. Not only are vehicles and property damaged, but there were several serious injuries. Yikes! As a Limited Liability Corporation (LLC), your entire business is at risk and can be held responsible
In a cash flow statement, the cash position at the end of the month represents the amount of cash that the company has on hand, at that moment in time. This cash position is a sign of financial strength and liquidity of the company, representing the ability of the company to meet their current liabilities.
“Is there a tax burden when moving a property from your name to an LLC/entity?” The answer to this question will depend on a number of factors, including local jurisdiction and the tax entity of the LLC (Partnership, S Corp, C Corp, etc.). Generally speaking, there is not an initial tax for the act of
Professional skills certification expenses are only deductible if they maintain or improve your skills or meet legal or employer requirements for you to maintain your current employment status or pay level. Accordingly, if you are pursuing your CFA or certifications in other professional skills in order to begin a new career or position, the costs will generally not
It’s important to draw a distinction between “Income Tax” and “Employment Tax”. Employees and Contractors are subject to the same income tax rates. However, employees pay half of their overall employment tax liability (7.65%), while their employer pays the other half, for a total of 15.3%. Self-employed individuals, or contractors, are both the “employee” and
Let’s say you owe $10,000 in school loans. You’ve paid $6, 000 dollars to the lender towards the balance, and the lender decides they are going to forgive the rest of the debt. Woohoo! However, the IRS says that forgiven debt is income. Accordingly, you indirectly received $4,000 of taxable income. You need form 1099
Filing for an S Corp or C Corp election is less about “How long?” and more about “Do I meet the requirements?” If filed correctly, you can convert your LLC to an S Corp or C Corp within the same tax year. Technically, you have two months and fifteen days from the first day of
The biggest difference between S Corporations and LLCs (partnerships) is the ability to minimize self-employment taxes as an S Corp. In an S Corp you are considered a shareholder and an employee, and therefore must include yourself on payroll. As an employee, you must pay yourself a “reasonable wage.” All wages paid in an S
“When dissolving an LLC, do you need to fill out IRS form 966?” The answer will be yes or no depending on how your entity is recognized for tax purposes. An LLC is not a recognized entity by the IRS. By default, a single-member LLC is organized for tax purposes as a sole proprietorship and
I like to think of myself as an anti-accountant. Instead of just dutifully checking boxes on tax to-do lists, I’m constantly peeking into the rest of my clients’ processes and actions and offering plenty of advice for how to achieve real financial certainty. For most of my clients, early on it can be a challenge
