C Corporations – DougFreemanCPA.com

Corporate officers or shareholders: How should you treat expenses paid personally?

Business Deductions, C Corporations, Shareholder, Small Business, Small Business Tax Tips / Douglas Freeman

If you play a major role in a closely held corporation, you may sometimes spend money on corporate expenses personally. These costs may end up being nondeductible both by an officer and the corporation unless the correct steps are taken. This issue is more likely to happen with a financially troubled corporation. What can’t you […]

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4 ways corporate business owners can help ensure their compensation is “reasonable”

C Corporations, Compensation, Compensation and Benefits, Employees, Small Business, Small Business Owners, Stocks, Tax Return / Douglas Freeman

If you’re the owner of an incorporated business, you know there’s a tax advantage to taking money out of a C corporation as compensation rather than as dividends. The reason: A corporation can deduct the salaries and bonuses that it pays executives, but not dividend payments. Therefore, if funds are paid as dividends, they’re taxed

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Choosing a business entity? Here are the pros and cons of a C corporation

C Corporations, Compensation and Benefits, Employee Benefits, Federal Income Tax, Income Tax, Small Business, Small Business Owners / Douglas Freeman

If you’re launching a new business venture, you’re probably wondering which form of business is most suitable. Here is a summary of the major advantages and disadvantages of doing business as a C corporation. A C corporation allows the business to be treated and taxed as a separate entity from you as the principal owner.

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An S corporation could cut your self-employment tax

C Corporations, Corporations, Employment Tax, Federal Income Tax, Income Tax, Internal Revenue Service (IRS), S Corporation, Self Employment Tax / Douglas Freeman

If your business is organized as a sole proprietorship or as a wholly-owned limited liability company (LLC), you’re subject to both income tax and self-employment tax. There may be a way to cut your tax bill by conducting business as an S corporation. Fundamentals of self-employment tax. The self-employment tax is imposed on 92.35% of

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Know the ins and outs of “reasonable compensation” for a corporate business owner

C Corporations, Compensation, Small Business, Tax, Tax Planning / Douglas Freeman

Owners of incorporated businesses know that there’s a tax advantage to taking money out of a C corporation as compensation rather than as dividends. The reason: A corporation can deduct the salaries and bonuses that it pays executives, but not dividend payments. Thus, if funds are paid as dividends, they’re taxed twice, once to the

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The right entity choice: Should you convert from a C to an S corporation?

Business Income Tax, C Corporations, Deductions, Employees, Income Tax, S Corporations, Shareholder, Small Business, Tax, Tax Planning / Douglas Freeman

The best choice of entity can affect your business in several ways, including the amount of your tax bill. In some cases, businesses decide to switch from one entity type to another. Although S corporations can provide substantial tax benefits over C corporations in some circumstances, there are potentially costly tax issues that you should

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Tax responsibilities if your business is closing amid the pandemic

Business Closing, C Corporations, Captial Gains, Employees, Form 1099-NEC, Partnerships, Small Business, Sole Proprietors / Douglas Freeman

Unfortunately, the COVID-19 pandemic has forced many businesses to shut down. If this is your situation, we’re here to assist you in any way we can, including taking care of the various tax obligations that must be met. Of course, a business must file a final income tax return and some other related forms for

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ESOPs offer businesses a variety of potential benefits

C Corporations, Employee Benefits, Employee Stock Ownership Plans, Employees, Retirement, S Corporation, Small Business, Tax, Tax Deduction, Tax Planning / Douglas Freeman

Wouldn’t it be great if your employees worked as if they owned the company? An employee stock ownership plan (ESOP) could make this a reality. Under an ESOP, employee participants take part ownership of the business through a retirement savings arrangement. Meanwhile, the business and its existing owner(s) can benefit from some tax breaks, an

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Some business owners can’t participate in their own companies’ HRAs

C Corporations, Employee Benefits, High Deductable Health Plan, HRA, HSA, Partnerships, S Corporation, Self Employed, Small Business, Sole Proprietors / Douglas Freeman

Many companies now offer Health Reimbursement Arrangements (HRAs) in conjunction with high-deductible health plans (HDHPs). HRAs offer some advantages over the perhaps better-known HDHP companion account, the Health Savings Account (HSA). If you’re considering adding an HRA, you might assume that, as a business owner, you can participate in the HRA. But this may not

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Beware the Ides of March — if you own a pass-through entity

2018 Tax Return, C Corporation, C Corporations, Federal Income Tax, Income Tax, Internal Revenue Service, Partnerships, Past-Through Entities, S Corporation, S Corporations, Tax, Tax Deadlines, Tax Deduction, Tax Planning / Douglas Freeman

Shakespeare’s words don’t apply just to Julius Caesar; they also apply to calendar-year partnerships, S corporations and limited liability companies (LLCs) treated as partnerships or S corporations for tax purposes. Why? The Ides of March, more commonly known as March 15, is the federal income tax filing deadline for these “pass-through” entities. Not-so-ancient history. Until

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