Archive for the ‘IRS’ Category

IRS Now Says No Payroll Taxes on Family Employment in a Single Member LLC

The IRS admits that its regulation that made the single-member LLC a corporation for payroll tax purposes is unfair to small business family employment.

To right this wrong, the IRS allows the single-member LLC to use the family employment rules to exempt FICA and Medicare taxes (for your children who are under age 18) retroactively to January 1, 2009. The regulation granting this change expires on or before October 31, 2014

You can amend your payroll tax returns.

It’s Not What You Earn, But What You Keep, After Taxes.™

Random line-by-line audits of small corporations will start soon!

IRS examiners will scrutinize the 2010 returns of about 2,500 corporations with assets of less than $250,000 to look for pockets on noncompliance by firms and their owners.

If you do not have a good way to keep your books, we can help.  We are Certified QuickBooks Pro Advisors and can setup and train you on QuickBooks or handle your bookkeeping needs for you.

It’s Not What You Earn, But What You Keep, After Taxes.™

Own a Business???  Watch out for IRS levy on employee wages.

An employer that ignored an IRS levy on wages of an employee’s overdue income taxes was found liable by a court for the tax plus a 50% penalty–OUCH.

It’s Not What You Earn, But What You Keep, After Taxes.™

S-Corp owners take low salaries so they can receive the bulk of the corporation’s profits as dividends, which are not subject to payroll taxes (Social Security & Medicare tax).  IRS and the courts balk at this practice.  In a recent case, a CPA (who should have known better) took a $24,000 salary in a year when his share of the S-Corp’s profits was around $200,000.  A district court agreed with the with the IRS that his pay was unreasonably low and ruled that the dividends are properly reclasified as salary and subject to payroll taxes.

It’s Not What You Earn, But What You Keep, After Taxes.™

In a Chief Counsel Memorandum (CCM), IRS has recommended that its Collection employee not access any IRS database to determine whether a taxpayer’s authorized representatives are in compliance with their own filing and payment obligations.

It’s Not What You Earn, But What You Keep, After Taxes.™

A new Govenment Accountability Office (GAO) report addresses S corporation noncompliance and makes specific suggestions for correcting the problem.  Noncompliance issues include misreporting of income and or expenses, mistakes in calculating shareholder basis, and failure to pay shareholder employees adequate wage compensation.

It’s Not What You Earn, But What You Keep, After Taxes.™

As of November 2009, the IRS was looking for over 107,000 taxpayers who have not received their refund checks for 2008 because the checks were returned as undeliverable.  If the taxpayer has moved without notifying the IRS or Post Office, the check will be returned to the IRS.  The IRS will mail out the refund check as soon as it receives an updated address.

If you did not receive an expected refund, you can check on its status by going to the “Where’s My Refund?” page at www.irs.gov or by calling 1-800-829-1954.  You can also go to my website at www.sboyarcpa.com and get the “Where’s My Refund” link on the Tax Resources page.

It’s Not What You Earn, But What You Keep, After Taxes.™

When you owe the IRS, they put big pressure on you to pay immediately or to set up a payment plan.  Watch out!  The fee to set up a plan is $105!  If you can pay your balance in three months or less, send what you can now, wait for the next bill, send more, then pay the balance with the third billing.  Save the $105.

If you will need more time, ask for a payment plan.  If you agree to have payment debited directly from a checking account, the cost to set up the plan drops to $52.

IRS charges interest, plus a “late payment” penalty on all balances.  Interest is currently 5%.  The penalty for paying late adds 6%, but is often cut in half for payment plans.

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It’s Not What You Earn, But What You Keep, After Taxes.™