Skip to main content

THURSDAY TAX TIDBITS

Why You Should Turn Your Business Into An S Corp!

 Are you thinking about starting your business or do you think your business couldn't be running any better? Whatever your business ownership position is, start thinking about turning your business into a corporation. An S Corp is a: "is a closely held corporation that makes a valid election to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code." Being an S Corp protects your personal liabilities from any business losses. There are more benefits to becoming an S Corp, such as tax and deductibility benefits. Here are some reasons why you should consider becoming an S Corp:
❖Save money on self-employment tax
❖W2 at year end
❖Deductibility of wages & payroll tax, employer portion
❖Rent expense paid to the shareholder 
❖Liability protection
❖Perpetual existence
❖Costs

 To understand how this applies, the table below demonstrates the accounting differences between a Sole Proprietorship and an S Corp:

Start growing your business and your success! If you have any doubts, at Cunningham's tax office we will offer you the best advice for you! We are open Monday through Friday from 9 AM to 5 PM; contact us by email or phone at: thetaxlady4u@gmail.com or 253.581.1461

Follow me!
Twitter: @thetaxlady4u
And ask me about PolkaDotPowerhouse!

Comments

Post a Comment

Popular posts from this blog

THURSDAY TAX TIDBITS

How to: Notice red flags and avoid scams! Summertime tends to be a period when thieves increase their scam attempts. They try to obtain peoples’ Social Security numbers, account information and passwords. To avoid these scams, remember these signs! The IRS and authorized private collection agencies will never: Call to demand immediate payment using a specific method such as a prepaid debit card, gift card or wire transfer. Normally, the IRS mails a bill and the payments are made payable to the U.S Treasury. Never make checks to other parties Threaten to immediately bring in the local police or other law-enforcement groups to have the taxpayer arrested for not paying Demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed Ask for credit/debit card numbers over the phone Use email, text messages, or social media to discuss personal tax issues, such as those involving bills or refunds If you believe yo...
Post a Comment
Read more
Public Service Announcement! The Internal Revenue Service today issued a warning about possible fake charity scams emerging due to Hurricane Harvey and encouraged taxpayers to seek out recognized charitable groups for their donations. While there has been an enormous wave of support across the country for the victims of Hurricane Harvey, people should be aware of criminals who look to take advantage of this generosity by impersonating charities to get money or private information from well-meaning taxpayers. Such fraudulent schemes may involve contact by telephone, social media, e-mail or in-person solicitations. Criminals often send emails that steer recipients to bogus websites that appear to be affiliated with legitimate charitable causes. These sites frequently mimic the sites of, or use names similar to, legitimate charities, or claim to be affiliated with legitimate charities in order to persuade people to send money or provide personal financial information that can be use...
Post a Comment
Read more

THURSDAY TAX TIDBITS

Tax Law Changes: Meals and Entertainment   Under the Trump Administration, the new tax Act creates stricter limits on the deductibility of business meals and entertainment expenses. As a business owner, you can still deduct your meals, but no longer entertainment. For example, if you take your team to a baseball game, you can write-off the hot dog, but not the game. Entertainment expenses incurred or paid after December 31, 2017 are nondeductible unless they fall under the specific exceptions in Code Section 274(e). One of those exceptions is for “expenses for recreation, social, or similar activities primarily for the benefit of the taxpayer’s employees, other than highly compensated employees”. (i.e. office holiday parties are still deductible). Business meals provided for the convenience of the employer are now only 50% deductible whereas before the Act they were fully deductible. After 2025, those meals will be nondeductible. These new rules should be kept in ...
Post a Comment
Read more