QSubs: A Smart Strategy for S Corporations
If you operate your business as an S corporation, you likely enjoy its tax-saving benefits—especially on Social Security and Medicare taxes. But there’s another powerful advantage you may not have considered: forming a qualified subchapter S subsidiary (QSub). What Is a QSub and Why Consider It? A QSub is a wholly owned subsidiary of your […]
Avoid a Tax Headache: How to Fix a Mistaken 1099-NEC
Did you receive a Form 1099-NEC that overstates your income? You’re not alone—and it could mean you’re paying more taxes than you owe. This problem often arises at year-end. When a business issues a 1099-NEC based on what it paid rather than what you received. For example, if you were paid in January for the […]
Understanding Excess Business Loss Limits
As you plan for 2025, it’s crucial to understand how recent tax law changes may impact your ability to deduct business losses. One such provision, the excess business loss disallowance rule, could limit how much of your business loss you can deduct in a given year—and delay the tax benefits you expect. What Is the […]
How to Avoid Unwanted Partnership Tax Status
Suppose you’re involved in a real estate or investment venture with one or more other parties, perhaps co-owning property or collaborating on a business project. In that case, you might think you’re simply sharing ownership. But the IRS may see it differently. Without proper precautions, your arrangement could be classified as a partnership for federal […]
Protect Your Deductions with Digital Receipts
When it comes to IRS audits, one of the most common reasons taxpayers lose deductions is the lack of proper documentation. To fully protect your deductions, especially for business-related expenses such as meals, travel, vehicle use, and gifts, you need to keep receipts that document five key facts: the date, the amount, the place, the […]
How to Avoid Estimated Tax Penalties Using Strategic Withholding
If you’re making quarterly estimated tax payments, missing a deadline can be costly. The IRS currently charges a 7 percent penalty for underpayments—and since penalties aren’t deductible, the real cost can feel closer to 11 percent. But here’s our good news: strategic withholding can often help you avoid or erase those estimated tax penalties—even late […]
Tax Code – Defined Statutory Employees are Hybrid Self-Employed
When you hire a worker, one of the most important decisions you’ll make is classifying the worker as either an employee or an independent contractor for tax purposes. If you correctly classify a worker as an independent contractor, you’re not required to pay the employer’s share of Social Security and Medicare taxes or to withhold […]
How to Ask Your C or S Corporation for Travel Reimbursements
Here’s a short note on your payments of corporate expenses and the process for receiving travel reimbursement from your C or S corporation. Your Corporation Is a Separate Legal Entity As a business owner operating through a corporation, you need to remember that the corporation is a distinct legal entity separate from you. Ensuring proper […]
How to Deduct Disaster Losses on Taxes for Individuals
The federal tax law provides relief if a disaster—such as a fire, flood, or hurricane—damages your personal (non-business) property, including your home, belongings, and vehicle. You may be able to deduct these disaster losses from your taxable income, but the rules are complex and often restrictive. Recent changes to the law have expanded eligibility, allowing […]
Retirement Plan Options for a Single-Owned C or S Corporation
Because you operate your business as a solely owned corporation (C or S) with no employees, several excellent retirement plans are available to you that can provide significant tax deductions and help you build wealth for retirement. The options for single-owned corporation retirement are varied and can be tailored to your needs. Some of the […]