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...
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...
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...
The tax law gives special treatment to certain kinds of income and allows special deductions for certain kinds of expenses. The AMT was designed to increase the tax bill of taxpayers who take undue advantage of these tax benefits to avoid significant tax liability....
Among other things, the IRS Explained that Voluntary Classification Settlement Program participation won’t trigger a federal audit and that IRS won’t share information about participants with the Department of Labor (DOL) or state agencies. Background....
Tax responsibilities of U.S. citizens and dual citizens living abroad The IRS has provided info to clarify the tax responsibilities of U.S. citizens and dual citizens living abroad in response to concerns from expatriates about penalties that might be levied on their...
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....
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...
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...
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...
