The Blog

Quarterly Estimated Taxes & The Self-Employed

Everyone’s talking about entrepreneurship or starting a side-hustle or new business these days. With the potential for believed freedom, flexible hours, personal goal achievement, and no more bosses, who can blame them? Having done diligent research would direct future small-business creators to see the needs placed on them through the IRS.   However, for as popular as self-employment is the ideas behind quarterly estimated taxes aren’t as understood as they ought to be. After all, if you’re supposed to be paying these taxes, there are gonna be penalties if you don’t comply. Follow our bullet points below to learn more about these important taxes for small business owners. What are quarterly estimated taxes? As most people are employees of someone other than her or himself, they … Continue reading

Back Taxes Can Now Affect Your Vacation Options

While much effort has been put forward by CPA Firms like Professional Tax Resolution to warn of the potential dangers of fraud regarding the IRS’s new use of private debt collection agencies, there has been little discussion of another provision introduced at the same time through the FAST Act. Much more out of the control of individual taxpayers, this provision sees the State Department teaming up with the IRS to revoke or suspend passports due to unpaid and unresolved taxes. Earlier this year, the IRS provided insight into how the program will effect those with outstanding taxes. Section 32101 of the FAST Act allows the Secretary of Treasury to provide the Secretary of State with a list of “seriously delinquent taxpayers.” This list will acted upon with denial, … Continue reading

Tax Code: Reform Will Not Be Easy

The President and his team recently released a one-page document proposing major changes and deep cuts to the individual tax system. Released near the 100-day mark of his administration, the plan includes changes in rhetoric that betray some of what we’ve heard for the past months and during the campaign. Notably, the repeal of deductions of state and local taxes paid, could have a negative effect of high-tax states such as California, New York, and New Jersey. The standard deduction would only be applicable to charitable donations and mortgage payments. Tax rates have been proposed to drop to 35% from almost 40% in the top bracket, with lower brackets being set at 25% and 10%. Corporate taxes would be lowered to 15% from 35% with … Continue reading

Converting a California C-Corp to an S-Corp

As companies grow and change over the course of their lifetime, certain structures that were set up at the beginning of the venture may grow obsolete and need to be changed. Legal forms of organization that were once appropriate and helpful to the business may come to work against it. There’s an importance in noting that in most cases where tax and business considerations allow, it is possible to convert a company’s organization to better suit current and emerging goals. Can You Convert a California Corporation to Other Entity Forms? Generally, domestic stock corporations can convert into other official California business entities. California limited liability company (LLC), limited partnership (LP) or general partnership (GP) can convert into a California or foreign other business entity. Provided … Continue reading

Bill Gates Proposes Tax on Labor Replacing Tech

Is it possible to cover the loss of income tax to governments local and federal and in between? During 2016’s Presidential race, there was no discussion of automation. As opposed to globalization, which dominated large segments of the debates. The true driver of job loss between 2000 and 2010 was in fact the rise of the robot with greater than 80% of losses jobs attributed to it. The questions include the determination of effective tax rates, the future of human capital, and the potentials of a Universal Basic Income proposed and championed by Elon Musk and other futurists. For all his “techno-optimism” Gates still believes that the tax will only slow the tide of machines taking over as a preferred source of labor. In discussing … Continue reading

Net Operating Loss Deduction in the News

Net Operating Loss Deduction in the News A net operating loss occurs when the allowable business tax deductions for any given tax year exceeds gross income for that year, thus generating a negative taxable income. Beginning with the Revenue Act of 1918, tax law has allowed for the carryover of such losses, making them a valuable tax planning tool for reducing taxable income in any year where a profit is generated. The federal carryback and carryforward periods, which have fluctuated over the years, are currently set at two and 20 years, respectively. Many states also permit the carryover of a net operating loss although the allowable the time periods and rules governing the deduction vary considerably from state to state. At the present time, the … Continue reading

Tax Penalties to Increase in 2017

Tax Penalties Set to Increase in 2017 According to the annual Bloomberg BNA report of projected tax rates, tax penalties are set to increase in 2017. The projected tax penalty increases will be applied pretty much across the board. They include penalties such as the Failure to File Penalty and the Failure to Pay Penalty imposed on individual and business taxpayers as well as significant increases in penalty assessments for tax preparers. Although the adjustments represent the expected annual increases due to inflation, they are also a result of the heightened focus by the IRS on collecting back taxes as well as tightening up the regulations governing tax preparation. The Failure to File Penalty is one of those sharply affected by the 2017 tax penalty … Continue reading

Two Candidates – Two Different Tax Plans

  Two Candidates – Two Different Tax Plans Although both Donald Trump and HillaryClinton seem to agree on certain points such as making the country’s tax structure more attractive to business, ending the carried interest tax break and expanding the tax deduction for childcare, they differ on how to best accomplish these tasks. Their tax plans deviate from one another on other important issues as well. These include individual income tax brackets, capital gains tax rates and the estate tax, among other things. Clinton’s tax plan includes many of president Obama’s current tax proposals while Trump’s strategy has adopted many of the line items suggested in the tax reform agenda set forth by congressional Republicans. The following is a comparison of some of the important … Continue reading

IRS Targets International Businesses

IRS Targets International Businesses Over the last few years, the IRS has faced many dramatic cutbacks which have caused them to decrease their services and drastically reduce the actual number of IRS employees. However, in spite of the downsizing, the agency is determined to collect the money they are owed, especially that owed by larger taxpayers. They have responded to slashes in the number of staff members by focusing most of their efforts and resources on going after the big guns while sweeping up any other delinquent IRS taxpayers they can find along the way. Using this creative approach, they hope to recover a large portion of the millions and billions of dollars that are dishonestly and fraudulently withheld from the IRS. One of the changes recently announced by the IRS … Continue reading

What Happens If You Can’t Pay Your Taxes?

What Happens If You Can’t Pay Your Taxes? What happens if you owe tax money to the IRS and you cannot afford to pay it? Most importantly, do not ignore the IRS. They have a lot of information on you and are not going to forget about the money that is owed. To prevent the IRS from initiating aggressive collection techniques such as freezing your bank accounts and garnishing your wages, it best to contact them promptly. A tax problem will not go away. On the contrary, it will only compound and increase over time until it is resolved. There are several options available for resolving a tax debt. Some of these options can be initiated directly with the IRS. However, if your tax problem is complicated, it may be in … Continue reading

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