In the spring of 2017, the IRS will begin outsourcing the collection of not all, but some, overdue federal tax debts to private contractors. In early December of 2015, President Obama signed into law the Fixing America’s Surface Transportation Act, or “FAST Act.” The FAST Act provides funding for transportation project over the next ten years. Of course, any bill related to highways is likely to include provisions requiring the IRS to use private debt collection companies, which this bill, in fact, includes.
Law Gives Tax Breaks To Olympians and Paralympians
As fall of 2016 commenced, many Olympic and Paralympic athletes received good news as President Obama signed a bill which allowed these athletes an exemption from income taxes. The Joint Committee on Taxation’s cost analysis estimated that the bill would cost the government $3 million in lost tax revenue over the next 10 years, which is hardly significant. The bill is retroactive so that it applies to medals won during the Rio Olympics.
Many Americans took home gold, silver, and bronze medals from the Summer Olympics in Rio de Janeiro as 121 medals were won by American athletes. Members of the U.S. Olympic team were paid $25,000 for each gold medal, $15,000 for each silver medal and $10,000 for each bronze medal.
Unpaid Loans – Tax Consequences To Lenders And Borrowers
One redeemable quality about humans is that we tend to be more willing to loan money than borrowing it. No one really likes to borrow money, but if a friend is in need, many of us help as much as our financial means allow. When this occurs, it is important to understand that there are income tax consequences for both lenders and borrowers when interest is earned, paid or forgiven on a loan. This blog will address the tax consequences of unpaid loans.
Tax Treatment of Business Entities Part 5: S Corporations
Startup business owners must consider the legal and tax considerations associated with selecting a particular type of business structure. This is the fifth part of a series of blogs on the tax treatment of business entities. This final segment will address the tax treatment of S corporations.
S corporations are entities that elect to pass corporate income, losses, deductions, and credits through to their shareholders who report any flow-through income and losses on their personal tax returns and taxed at individual income tax rates, similar to a partnership. Thus, S corporations avoid double taxation on corporate income, unlike C corporations. However, S corporations are responsible for tax on some capital gains and passive income at the corporate level. The rules for Subchapter S corporations are found in Subchapter S of Chapter 1 of the Internal Revenue Code.
Tax Treatment of Business Entities Part 4: C Corporations
Startup business owners must consider the legal and tax considerations associated with selecting a particular type of business structure. This is the fourth part of a series of blogs on the tax treatment of business entities. This blog will address the tax treatment of corporations, often referred to for tax purposes as C corporations.
Like an individual person, a corporation may be taxed and held legally liable for its actions. Individual shareholders are generally not personally liable for the debts of a corporation. This is one of the primary reasons that corporations are formed. When one or more individuals form a C corporation, they create an entity with two separate types of taxpayers, the corporation, and the shareholders. As a separate tax-paying entity, a corporation files Form 1120 or 1120-A, U.S. Corporation Income Tax Return.
Tax Treatment of Business Entities Part 3: Partnership
Startup business owners must consider the legal and tax considerations associated with selecting a particular type of business structure. This is the third part of a series of blogs on the tax treatment of business entities. This blog will address the tax treatment of partnerships.
A partnership is an association of two or more persons who carry on a trade or business. Each partner shares in the profits and losses of the business enterprise, while contributing money, property, labor or skill to its operation.
Tax Treatment of Business Entities Part 2: LLCs
Startup business owners must consider the legal and tax considerations associated with selecting a particular type of business structure. This is the second part of a series of blogs on the tax treatment of business entities. This blog will address the tax treatment of limited liability companies (LLCs). LLCs are used by many business owners because, like corporations, their owners typically have limited personal liability for the debts and activities of the LLC. In contrast, some features of LLCs are similar to a partnership, such as pass-through or flow-through taxation.
Reminder: Employers Face New Jan. 31 W-2 Filing Deadline
REMINDER: Employers and small businesses have a new deadline, January 31, 2017, for filing Forms W-2. The acceleration of this deadline is the result of a new federal law aimed at helping the IRS detect and prevent refund fraud. For similar reasons, the new law also requires the IRS to hold refunds involving two key refundable tax credits until at least February 15, 2017. The January 31 deadline of past years for employers furnishing copies of Forms W-2 to their employees remains the same.
Tax Treatment of Business Entities Part 1: Introduction
When starting a business enterprise, one of the most significant and important decisions to make is the choice regarding the legal form to use in operating the business. The alternatives include sole proprietorship, partnership, corporation (C corporation), S corporation, and limited liability company (LLC). Startup business owners must consider the legal and tax considerations associated with selecting a particular type of business structure. This is the first part of a series of blogs on the tax treatment of business entities.
Is Income Of An LLC Member Subject To Self-Employment Tax?
Unlike corporations which are treated as separate tax entities, the IRS and the Tax Code treat LLCs as “pass-through” entities. Thus, an LLC or “Limited Liability Company” is a business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation. The IRS treats an LLC like a sole proprietorship or a partnership, depending on the number of members.