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When to Turn a Hobby into a Business

  • 22 August 2017
  • Author: Alexander Carr
  • Number of views: 14
  • 0 Comments
When to Turn a Hobby into a Business

Hobbies are a great distraction from the hustle and bustle of work. Over time, some of us become so good at our hobbies that they start providing income for us. How many cupcake bakers, woodworkers, photographers, and other hobbyists do you know who have found an extra source of income doing what they love? 

Are Corporation Profits Double (or Even Triple) Taxed?

  • 15 August 2017
  • Author: Alexander Carr
  • Number of views: 80
  • 0 Comments
Are Corporation Profits Double (or Even Triple) Taxed?

All too often, the answer to the question, “Are corporation profits double taxed?” is a resounding YES. But double taxation doesn’t need to be a fact of life for corporate business owners if they know how to navigate around it within the boundaries of the IRS.

How the IRS Weighs “Reasonable” Versus “Reckless” When Payroll Taxes Go Missing

How the IRS Weighs “Reasonable” Versus “Reckless” When Payroll Taxes Go Missing

At face value, it seems the IRS has a very low barrier to personally penalize a member of business management when payroll taxes withheld from employee paychecks (called trust fund money) aren’t submitted to the IRS. Time after time, the IRS seems to win these cases. What it really comes down to is whether the stakeholder knowingly and recklessly disregarded the risk of non-payment. It’s why a Seinfeld icon and soup mogul was recently on the hook for back taxes (read that story here) and why tax practitioners rarely seem optimistic when the IRS claims a trust fund penalty is due. However, a recent case shows there is light at the end of the tunnel and that light is called “reasonable belief.”

Boston Bruins Just ICED THE IRS IN TAX COURT!

Boston Bruins Just ICED THE IRS IN TAX COURT!
The Boston Bruins professional hockey team just won a huge victory, only it wasn’t on the ice rink. Instead, it was in Tax Court. In a recent surprise ruling (see  Jacobs v. IRS, 148 T.C. No. 24

), the Tax Court ruled that the owners of the team  may deduct the entire cost of away game pregame meals as a qualifying de minimis fringe benefit.

Why “Pleading the Fifth” Doesn’t Work in Tax Cases

Why “Pleading the Fifth” Doesn’t Work in Tax Cases
From corporate leadership to government officials, it seems invoking the Fifth Amendment and declining to provide information during legal proceedings has

become popular. But if you assume the tactic can be used as a defense for not filing taxes, think again.

Now’s the Time to Fix Rollover Mistakes

Now’s the Time to Fix Rollover Mistakes
If you filed an extension on last year’s income tax return and haven’t finalized yet, you have a unique opportunity to undo some of the decisions you made when it comes to your retirement savings. You can no longer make contributions or fulfill your required minimum distributions (if you’re 70½ or older), but you can make other changes

Monitoring Adjusted Gross Income (AGI) to Minimize Taxes

Monitoring Adjusted Gross Income (AGI) to Minimize Taxes
For most business owners, determining income from one year to the next can be tricky. Interest, dividends, alimony, pensions and annuities, rental property income, royalties, income from the sale of assets and business income can all raise your annual gross income and, therefore, your taxes. That’s why it’s important to monitor your Adjusted Gross Income (AGI). AGI is gross income minus certain “above the line” deductions (retirement account contributions, self-employed health insurance

and domestic production activities, just to name a few) and it can lower your tax liability. Your AGI is a primary figure on which other deductions are computed.

No Soup for You! Seinfeld Icon in Serious Payroll Tax Trouble

No Soup for You! Seinfeld Icon in Serious Payroll Tax Trouble
Remember the “Soup Nazi” from the Seinfeld television show? Thanks to its popularity on the show, that small soup shop turned into Soupman, Inc. and its CFO, Robert N. Bertrand, was recently indicted on 20 counts of failure to pay both payroll and federal income taxes. You could

say he’s in very hot…soup? His story is a cautionary tale of what can happen when you fail to pay or try to avoid (using “independent contractors” who are actually employees or paying non-reported “wages”) payroll taxes.

Clearing the PATH for Business Property Tax Breaks

Clearing the PATH for Business Property Tax Breaks
While President Trump’s new administration works vigorously to unravel many of the programs put in place by President Obama, the Protecting Americans from Tax Hikes (PATH) Act of 2015 remains intact. In fact, the IRS only recently released guidance for those interested in taking advantage of laws like Section 179 for real estate improvements (see Revenue Procedure 2017-33).

Embarrassing Celebrity Tax Mistakes

Embarrassing Celebrity Tax Mistakes

Celebrities can certainly make mistakes with their money. Two of the most common mistakes that involve the IRS are tax evasion and poor estate planning. One is a failure to assume responsibility and hope the IRS doesn’t notice while the other is based more on ignorance of what can truly happen to your assets (and how much can be lost to the IRS) after you’re gone. Marilyn Monroe, Willie Nelson, Wesley Snipes and others have fallen victim to these mistakes and they (or their families) have paid the price. 

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