Solo 401Ks Offer Tax-Advantaged Retirement Planning for the Self-Employed
A solo 401K plan is one of the most popular retirement plans for self-employed individuals running a business without other employees. A solo 401K offers participants the option of contributing their pre-tax income to the plan to help fund your retirement and lower your federal income tax. There are no income or age restrictions for […]
LLCs and Sole Proprietorships
Over the past few years, an increasing number of Bay Area workers have embraced the gig economy and begun operating their own businesses as either limited liability companies (LLCs) or sole proprietorships. These businesses must collect and report comprehensive tax information each year. Federal Taxation of LLCs LLCs blend corporate and partnership business structures and […]
12 Tax Deductions That Can Save Construction Businesses Money
The construction industry has proven to be quite erratic, consistently riding the many waves of the economy. According to a 2018 infographic by EHS Today, $10 trillion is spent annually by construction businesses for construction services. Consequently, construction companies in the country spend top dollar on tax. However, this does not have to be the […]
Reasonable Compensation for an S Corp Shareholder
A Subchapter S corporation (S corp) is a pass-through entity where the company’s income and losses flow through to shareholders where it is taxed as personal income. However, when a shareholder also works for the company, the IRS usually requires the payment of reasonable compensation that is subject to payroll taxes. A shareholder who owns […]
Will Filing as an S Corporation Reduce the Tax Bill of a Business Owner?
My business clients often ask me whether they would see a tax benefit if they converted their business to an S corporation. Unfortunately, there is no simple answer to the question because there are numerous pros and cons to operating as an S corporation. It all comes down to whether the advantages outweigh the drawbacks […]
How to Pay Taxes on a Lawsuit Settlement
Many individuals who settle a lawsuit do not stop to consider that they may need to set aside part of their settlement to pay the federal tax that may be due on it.
The Federal Export Incentives Offered IC-DISCs Provide Businesses with Significant Tax Savings
Export incentives are assistance provided by governments to help businesses sell products in foreign markets. The only federal export incentive currently being offered in the U.S. provides tax savings to companies utilizing interest charge domestic international sales corporations (IC-DISCs). An IC-DISC is organized by the shareholders or partners of an exporting business that operates as […]
The Property Tax Government Foreclosure Process
Late Payment of Property Tax Bill Results in an Immediate Lien, but Owners have Five Years to Pay Before it is Sold at a Tax Sale When California property owners do not pay their property taxes–or fail to pay them on time–the overdue taxes are converted into a tax lien. Owners who fail to pay […]
The Tax Implications of Receiving a Windfall
If you had the opportunity to receive free money, what would you say? ‘Yes’ would be the rational answer. But an even smarter person would ask: What’s the catch? When it comes to windfalls, it’s important to know that there are always strings attached. And most of the time, they’re in the form of taxes. […]
New Subchapter 5 Bankruptcy Proceeding Makes It Easier For Small Businesses to Reorganize While Continuing Operations
They have received little publicity, but recent changes to the U.S. Bankruptcy Code have made it easier for small businesses to restructure under Chapter 11 and discharge their debts while continuing their operations. The first change was made by the Small Business Reorganization Act of 2019, which took effect on February 19, 2020, and added […]
The Insurance Mandate Isn’t Just About Penalties, California is also Helping Low- to Middle-Income Residents Buy Coverage
California’s new individual health insurance mandate went into effect in January 2020. Under the mandate, Californians who do not maintain the minimum essential coverage (MEC) for themselves and their dependents will be subject to a tax penalty unless they qualify for an exemption under the new law.
Changes to the Tax Law Have Encouraged the Use of the Section 1202 Small Business Stock Gain Exclusion
The U.S. has allowed small business stockholders to exclude profits from stock sales from their income since 1993. However, the exclusion under Section 1202 of the Tax Code has taken on greater importance after the 2017 Tax Cuts and Jobs Act (TCJA) encouraged small business owners to form as C corporations. The TCJA cut the […]
Bay Area Homebuyers Have State and Federal Options for Low Downpayment Mortgages
California and the federal government have programs that can reduce, and even eliminate, the down payment requirement for middle-to-low-income homebuyers
Federal, State, and Local Programs Offer Assistance to First-Time Homebuyers in the Bay Area
We will break down the programs available to Bay Area homebuyers by looking at such factors as which homebuyers qualify the amount of money available.
Bay Area Small Businesses Have A Variety Of Options For Financial Assistance To Weather The COVID-19 Crisis
With much of the media coverage focusing on the funding shortfalls faced by the federal Paycheck Protection Program (PPP), it is understandable how Bay Area small business owners could believe that program is the only available option to help them stay solvent during the COVID-19 pandemic. In fact, there are a number of other federal, […]
Opportunity Zones Offer Tax Deferrals to Real Estate Investors, But Benefits Should Be Weighed Against Like-Kind Exchanges
Real estate investors looking to shield their capital gains from tax are often curious about the Opportunity Zones that were created in the Bay Area following the adoption of the 2017 Tax Cut and Jobs Act to spur economic development in economically depressed areas. While these zones provide real estate investors with a wonderful opportunity […]
Despite Recent Changes to Federal Tax Law, Bay Area Homeowners Often Benefit From Itemizing Their Deductions
The 2017 federal Tax Cuts and Jobs Act (TCJA) increased the standard deduction for federal taxpayers to the point that most U.S. homeowners benefited more from claiming that deduction than claiming the traditional itemized deductions designed to encourage homeownership. But the Bay Area housing market is anything but typical and its high home prices mean […]
What are the Tax Consequences of Your Business’s Succession Plan?
When it comes to succession planning, small business owners usually try to address everything from maintaining day-to-day operations to ensuring that their families retain whatever equity they have in the company. But the tax implications of the plan are often an afterthought, if the issue is considered at all. While taxes should never be the […]
How to Boost Your Credit Score Using Your Rent and Utility Payment History
If you have bad credit or own a business attempting to establish credit you have probably been advised that paying your rent and utilities on time will help you establish a good credit history. While that is sound advice, it also leads to more questions. The most logical being: How do I know if the […]
Pursuing Out-of-State Business Opportunities May Lead to Tax Complications
Whether you have invested in a partnership that is looking to invest in rental properties in another state or a software consultant thinking about taking on out-of-state clients, expanding operations beyond your home state is likely to raise complex tax issues. Those issues usually stem from the need to divide your earnings between states for […]
