Withholding taxes may seem like a nuisance but if you have "employees" then you are responsible by law to withhold several federal, state, and possibly local taxes. Please also keep in mind that prior to commencing operations and hiring "employees," you technically need an employer identification number which is commonly referred to as a "EIN." You can visit the IRS website which details the necessary steps to obtain a EIN. You will also need to rely on the employee's W-4 Form to accurately calculate withholding taxes. .

Many business owners that are in the process of purchasing or leasing a vehicle, get the idea of executing the transaction through the business. The thought that they have is, "Why not, I can probably claim a tax deduction." Although it may seem logical, being able to legally claim a tax deduction depends on exactly how the vehicle is used. .

This is an interesting situation since a teacher is not a traditional vendor selling a product or service but teaching a class. We'll analyze in further detail below but we would strongly advise the teacher to understand the reason for the request by their customer. .

Recently started a business and now wondering if you can receive distributions from your s-corporation tax free? Well, the good news is that it is tax-free BUT only to the extent that the distribution doesn't exceed your basis. We go through all of the details below. .

The 1099 vs. W2 topic can definitely be confusing to employers and thus leads to many tough tax questions. The most important thing as we point out later in this article is understanding whether or not the individuals being compensated for their work are considered by the IRS to be employees or independent contractors. .

This topic is often misunderstood and the penalty could be as high as getting audited. The amount a corporate officer is compensated (i.e. wages) is very important. .

Starting your own business can become overwhelming as each decision in the beginning is very important. One recent client came to us with this question, "How do I separate my personal information from my business information when opening up a new e-commerce business. Should I go with an LLC? .

Business owners that setup a single member LLC often have questions as to how much they should pay themselves in salary and dividends. The answer to the question depends on the type of LLC that is setup. Keep in mind that as a single member LLC your business can be classified as either a disregarded entity or corporation for tax purposes. .

So you recently launched an LLC by yourself and aren't sure how to report your federal taxes or what to do if the company doesn't take off? You aren't the first to have these concerns. In fact, this is actually a common concern for new single owner LLCs. .

If you recently launched a business and haven't gotten around to bookkeeping or have been in business for awhile but lack a proper bookkeeping system, you'll want to listen in to what we have to say. .