S Corporation Officer/Shareholder/Owner Compensation

Reasonable Compensation How the IRS and Tax Court Assess S Corporation Officer/Shareholder/Owner Compensation S corps are pass-through entities, whereby the IRS does not tax income at the corporate level, but allows income to flow through directly to S corp shareholders. The result is that income is only taxed once on shareholders’ personal tax returns, eliminating […]

Giving Tax Friendly Gifts

As I illustrate below, taxpayers can transfer substantial amounts free of gift taxes to their children or other donees through the proper use of this exclusion. The statutory exclusion amount ($10,000) is adjusted for inflation annually, using 1997 as the base year. The amount of the exclusion for 2017 is $14,000. The exclusion covers gifts […]

tax checklist

Checklist of things to do before the end of 2017.

There are many tax-saving steps that can be taken before the end of this year. Here is a list of the most important actions that should be taken no later than Dec. 31, 2017 to save taxes: … Realize losses on stock while substantially preserving investment position, … Convert investment income taxable at regular rates […]

The Telecommuting Tax Adventure

So you work at home, and communicate with your employer mainly by telephone, e-mail, fax, electronic data transfer, express mail services, etc., you should know about the strict rules that govern whether you can deduct your home office expenses. You may deduct your home office expenses if your home office is for the convenience of […]

Independent Contractor or Employee

The question of whether a worker is an independent contractor or employee for federal income and employment tax purposes is a complex one. It is intensely factual, and the stakes can be very high. If a worker is an employee, the company must withhold federal income and payroll taxes, pay the employer’s share of FICA […]

Keeping life insurance out of your estate

How to make sure the life insurance benefits your family will receive after your death and avoid the federal estate tax. Under the estate tax rules, insurance on your life will be included in your taxable estate if either:  Your estate is the beneficiary of the insurance proceeds, or  You possessed certain economic ownership rights (“incidents […]

real estate professional

How to qualify as a real estate professional

How to qualify as a real estate professional: 1. First, you must materially participate (see below) in a real estate business. The business of renting and leasing realty is a real estate business. 2. Second, more than 50% of the personal services you perform in all businesses during the year must be performed in real […]

Your Estate Plan – Business Disposition

Retirement is an event that often triggers one’s desire to review his estate plan. Even if you’re are not ready for a full-scale review, retirement may directly affect certain elements of your estate plan and require that those be looked at in light of the changed circumstances. Review existing arrangements for disposition of the business […]

Overview of Various Types of IRA’s

At one time, there was relatively little confusion about IRAs because there was only one type available. Now, however, IRAs have proliferated—there are o the “traditional” IRA, which may be funded with o deductible o and/or nondeductible contributions, o  Roth IRA, o SEP-IRA, o and SIMPLE IRA. Some of these IRAs have similar features, but […]

S Corps to reduce self-employment income

Using S corporations to reduce self-employment income o Income that you generate conducting your business as a sole proprietorship (or through a wholly-owned limited liability company (LLC)) is subject to both income tax and self-employment tax. The self-employment tax is imposed on 92.35% of self-employment income at a 12.4% rate for social security up to […]

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David DennisCertified CPA