Business Entity Selection and the Tax Consequences of Converting

For this post Brandon Rains, founder of the Rains Laws Firm and an expert on business formation espouses his observations about business structure changes and I address the income tax reporting requirements of those changes therein. Generally speaking there are five choices when it comes to business structure and income reporting requirements: Sole Proprietorship (IRS Form…

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Should you keep a spreadsheet on the differences between the AAA and retained earnings from year to year?

U.S. Business Taxpayers reporting income using IRS Form 1120S who like to drill down into the tax forms my team prepares usually tend to get a little freaky over the Accumulated Adjustment Account (AAA) reported on Schedule M-2, specifically why the entry doesn’t tie out to what their books and records show for retained earnings. Rightfully…

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IRS Form 1099-misc Due Date Approaching – Facts and Misconceptions

As many of us who hang our own shingle are painfully aware, IRS Form 1099-misc is due NEXT WEEK. YIKES! I’m still shaking off the holidays. The failure to timely file this ‘informational return’ has gone up this year. So you really do NOT want to miss this deadline, particularly if you are a contractor…

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Income 54: Nonresident Partners and Shareholders of Partnerships and S Corporations

The Colorado Department of Revenue has finally revised its guidelines in FYI Income 54 regarding people who do not live in Colorado but are partners and/or shareholders of partnerships and/or S corporations in Colorado, ensuring that pass-through entities pay Colorado income tax on their Colorado-source income. This #EnrolledAgent says #AboutTime! According to the revised guidelines, this requirement…

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Excess Depreciation Claimed – Now What?

Justin Fundalinski of Jim Saulnier & Associates, who I met while volunteering time for the betterment of the Financial Planning Association, asked me a procedural question about a fascinating situation he encountered regarding depreciation and disposition of residential rental real estate, causing pause. Tax questions that cause ME to pause are the spice of life. So…

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Colorado Year End Tax Update: Focus on USE TAX – 50 Points of Light

It is that time of year again where we work ourselves into a tizzy finishing off the year “strong” and simultaneously enduring another holiday season whilst purportedly planning for a new year. YIKES! With internet sales exploding it is a good idea to review each transaction you make to know if sales tax is being…

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Colorado Income Tax Planning Update: Form 104

The following items might seem new and/or different for Colorado taxpayers on the CO 104 Income Tax form, some are some are not. These points below basically represent some of the more persistent questions coming across my desk as part of year end tax planning. You must include the last 4 digits of your Colorado…

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21st Century Cures Act Signed by President Obama

President Obama signed the 21st Century Cures Act into law creating an option for small businesses to offer employees a health reimbursement arrangement (HRA) that is funded by the employer. Beginning January 1, 2017, the maximum employees can receive per year through the HRA is $4,950 for individuals who show they have individual coverage or…

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Prepare for the Tax Pendulum to Swing

One thing to be be thankful for this holiday season is that the tax ‘policies’ of President Elect Trump (PET) and our Republican friends in the 115th congress will keep tax accounts and bookkeepers gainfully employed well into the foreseeable future. In fact I am adding staff again, which ‘sounds’ great! Is is good for the US though…

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IRS Acceptance Agents No Longer Will be Situated Outside USA Borders

According to Sharon Bradley, Manager of the IRS’ ITIN Policy Section in the Atlanta, GA  Service Center, Section 203 of the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), Pub. L. 114-113, div. Q, enacted on December 18, 2015, modified Section 6109 of the Internal Revenue Code and resulted in significant changes to the Individual Taxpayer…

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