S Corporation – DougFreemanCPA.com

Corporate business owners: Is your salary reasonable in the eyes of the IRS?

C Corporation, Compensation, Corporate Business Owners: Is Your Salary Reasonable In The Eyes Of The IRS, Corporations, S Corporation, Tax Return, Tax-Deductible Business Expenses / Douglas Freeman

Determining “reasonable compensation” is a critical issue for owners of C corporations and S corporations. If the IRS believes an owner’s compensation is unreasonably high or low, it may disallow certain deductions or reclassify payments, potentially leading to penalties, back taxes and interest. But by proactively following certain steps, owners can help ensure their compensation is seen […]

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Businesses considering incorporation should beware of the reasonable compensation conundrum

C Corporation, Compensation, Dividend Distribution, Highly Compensated Employees, Reasonble Compensation Conundrum, S Corporation, Small Business, Small Business Tips / Douglas Freeman

Small to midsize businesses have valid reasons for incorporating, not the least of which is putting that cool “Inc.” at the end of their names. Other reasons include separating owners’ personal assets from their business liabilities and offering stock options as an employee incentive. If you’re considering incorporation for your company, however, it’s essential to

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An essential tax deadline is coming up — and it’s unrelated to your 2024 return filing

Annualized Income Method, Individual Income Tax, Individual Tax Tips, Quarterly Estimated Tax Payments, S Corporation, Sole Proprietors, Taxes and Tips / Douglas Freeman

Tuesday, April 15 is the deadline for filing your 2024 tax return. But another tax deadline is coming up the same day, and it’s essential for certain taxpayers. It’s the deadline for making the first quarterly estimated tax payment for 2025 if you’re required to make one. Basic details You may have to make estimated

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Exploring business entities: Is an S corporation the right choice?

Business Entities, Capital Losses, Fringe Benefits For Employees, Gross Profit, Qualified Business Income Deducton (QBI), S Corporation, Shareholder, Small Business, Small Business Owners, Small Business Stock / Douglas Freeman

Are you starting a business with partners and deciding on the right entity? An S corporation might be the best choice for your new venture. One benefit of an S corporation One major advantage of an S corporation over a partnership is that shareholders aren’t personally liable for corporate debts. To ensure this protection, it’s crucial to: Handling

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Self-employment tax: A refresher on how it works

Medicare Taxes, S Corporation, Self Employed, Self Employment Tax, Small Business, Small Business Owners, Social Security Administration / Douglas Freeman

If you own a growing, unincorporated small business, you may be concerned about high self-employment (SE) tax bills. The SE tax is how Social Security and Medicare taxes are collected from self-employed individuals like you. SE tax basics The maximum 15.3% SE tax rate hits the first $168,600 of your 2024 net SE income. The

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The possible tax landscape for businesses in the future

Corporate Federal Income Tax Rate, Corporations, Partnerships, Past-Through Entities, Qualified Business Income Deducton (QBI), S Corporation, Small Business, Small Business Owners, Sole Proprietors, Tax Cuts and Job Acts (TCJA) / Douglas Freeman

Get ready: The upcoming presidential and congressional elections may significantly alter the tax landscape for businesses in the United States. The reason has to do with a tax law that’s scheduled to expire in about 17 months and how politicians in Washington would like to handle it. How we got here The Tax Cuts and

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Closing a business involves a number of tax responsibilities

C Corporation, Federal Income Tax, Partnerships, S Corporation, Small Business, Small Business Owners, Sole Proprietors / Douglas Freeman

While many facets of the economy have improved this year, the rising cost of living and other economic factors have caused many businesses to close their doors. If this is your situation, we can help you, including taking care of various tax responsibilities. To start with, a business must file a final federal income tax

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Hiring your child to work at your business this summer

C Corporation, College children on The Payroll, Hiring Your Child In the Summer, Roth IRA, S Corporation, Small Business, Small Business Owners / Douglas Freeman

With school out, you might be hiring your child to work at your company. In addition to giving your son or daughter some business knowledge, you and your child could reap some tax advantages. Benefits for your child There are special tax breaks for hiring your offspring if you operate your business as one of

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Should you convert your business from a C to an S corporation?

(LIFO) Last In, First Out Inventory Method, C Corporation, S Corporation, Small Business, Small Business Owners, Small Business Tips / Douglas Freeman

Choosing the right business entity has many implications, including the amount of your tax bill. The most common business structures are sole proprietorships, partnerships, limited liability companies, C corporations and S corporations. In some cases, a business may decide to switch from one entity type to another. Although S corporations can provide substantial tax benefits over C corporations in

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What’s the best accounting method route for business tax purposes?

Accounting, Accrual Method of Accounting, C Corporation, Cash Method of Accounting, Farming Businesses, Federal Income Tax, S Corporation, Small Business, Small Business Owners, Small Business Tax Tips / Douglas Freeman

Businesses basically have two accounting methods to figure their taxable income: cash and accrual. Many businesses have a choice of which method to use for tax purposes. The cash method often provides significant tax benefits for eligible businesses, though some may be better off using the accrual method. Thus, it may be prudent for your

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