When taking money out of a business, transactions must be carefully structured to avoid unwanted tax consequences or damage to the business entity. Business owners should follow the advice of a tax professional to make sure financial transactions are controlled and do not cause unanticipated taxation or other negative effects.

For example, a shareholder of a...

Find the full article at https://fpsparkmancpa.blogspot.com/2019/09/business-ownerstaking-money-out-of.html

Read these tips for taxpayers who receive an IRS notice.

Receiving a notice from the Internal Revenue Service is usually no cause for alarm. Every year the IRS sends millions of letters and notices to taxpayers. In the event one shows up in the mailbox, here are ten things you should know.

   1.  Don’t panic. Many of these letters can be dealt with...

Find the full article at https://fpsparkmancpa.blogspot.com/2019/08/taxpayers-who-receive-irs-notice.html

A common problem with single-owner and other closely-held corporations is intermingling of funds. This occurs when a corporate shareholder uses his or her personal checking account for corporate deposits or payment of corporate expenses.

Separation of funds can...

Find the full article at https://fpsparkmancpa.blogspot.com/2019/07/business-financing-dont-intermingle.html

College Financial Aid Planning
Individuals who want to attend college but cannot afford the costs outright must find alternative funding through various types of financial aid. Many factors affect eligibility for federal financial aid; therefore, all students should apply for financial aid every year even if they think they do not otherwise qualify.

FAFSA. The Free Application for Federal Student Aid (FAFSA) is the first step in...

Find the full article at https://fpsparkmancpa.blogspot.com/2019/06/college-financial-aid-planning-federal.html

Reporting Property Repairs vs. Property Improvements
Internal Revenue Code section 162 generally allows a current business deduction for the cost of repairs and maintenance incurred during the year. On the other hand, Internal Revenue Code section 263 requires the capitalization of amounts paid to acquire, produce, or...

Find the full article at https://fpsparkmancpa.blogspot.com/2019/05/business-tax-preparation-repairs-vs.html

Assets in a custodial account belong to the minor. A custodian, usually an adult relative, controls the assets until the minor reaches the age set by...

Find the full article at https://fpsparkmancpa.blogspot.com/2019/03/saving-for-college.html

Business accounting and tax preparation is a dreadful task for most Carolina business owners. Thankfully, in your time of need there is a professional you can trust to turn to for assistance. That professional is...

Find the full article at https://fpsparkmancpa.blogspot.com/2019/02/business-entity-comparisoncharts.html

If you pay tuition, fees, and other costs for attendance at an eligible educational institution for yourself, your spouse, or your dependent, you may be able to take advantage of one or more of the education tax benefits.

You can claim more than one education benefit in a tax year as long as you do not use the same expenses for more than one benefit.

Exception: Qualified expenses used to...

Find the full article at https://fpsparkmancpa.blogspot.com/2019/01/education-taxbenefits.html

Employee or Independent Contractor? In order for a business owner to know how to treat payments made to workers for services, he or she must first know the business relationship that exists between the business and the person performing the services. A worker’s status determines what is needed for tax preparation; what taxes are paid and who is responsible for reporting and paying those taxes. A worker performing services for a business is generally an employee or an independent contractor. If a worker is...

Find the full article at https://fpsparkmancpa.blogspot.com/2018/12/employee-or-independent-contractor.html

When taking money out of a business, transactions must be carefully structured to avoid unwanted tax consequences or damage to the business entity. Business owners should follow the advice of a tax professional to make sure financial transactions are controlled and do not cause unanticipated taxation or other negative effects.

For example, a shareholder of a corporation can make a loan to the corporation, and subsequent repayments of principal are not taxable to the shareholder. This may seem straightforward. However, if the loan and repayments are not set up and...

Find the full article at https://fpsparkmancpa.blogspot.com/2018/11/business-ownerstaking-money-out-of.html

Read these tips for taxpayers who receive an IRS notice.

Receiving a notice from the Internal Revenue Service is usually no cause for alarm. Every year the IRS sends millions of letters and notices to taxpayers. In the event one shows up in the mailbox, here are ten things you should know.

     1.Don’t panic. Many of these letters can be dealt with very simply.
     2.Don’t ignore it. Most of these letters have a “reply by” date. Inaction can lead to...

Find the full article at https://fpsparkmancpa.blogspot.com/2018/10/taxpayers-who-receive-irs-notice.html

A common problem with single-owner and other closely-held corporations is intermingling of funds. This occurs when a corporate shareholder uses his or her personal checking account for corporate deposits or payment of corporate expenses.

Separation of funds can be a key in preserving the liability protection of the corporate veil. Courts can pierce the corporate veil by finding that the corporation is an “alter ego” of the shareholder, essentially stating that the...

Find the full article at https://fpsparkmancpa.blogspot.com/2018/09/business-financing-dont-intermingle.html

College Financial Aid Planning
Individuals who want to attend college but cannot afford the costs outright must find alternative funding through various types of financial aid. Many factors affect eligibility for federal financial aid; therefore, all students should apply for financial aid every year even if they think they do not otherwise qualify.

FAFSA. The Free Application for Federal Student Aid (FAFSA) is the...

Find the full article at https://fpsparkmancpa.blogspot.com/2018/08/college-financial-aid-planning-federal.html

Reporting Property Repairs vs. Property Improvements
Internal Revenue Code section 162 generally allows a current business deduction for the cost of repairs and maintenance incurred during the year. On the other hand, Internal Revenue Code section 263 requires the capitalization of amounts paid to acquire, produce, or improve tangible property. Since repairs and improvements often have very similar characteristics, it can be tricky to classify the expenditures. However, correct classification is important because the cost of repairs can generally be deducted in the year paid, while improvements must be...

Find the full article at  http://fpsparkmancpa.blogspot.com/2018/07/business-tax-preparation-repairs-vs.html

Updating your status from single to married may bring about some unanticipated changes, including changes relating to your taxes. While wedding planners don’t typically use an IRS checklist, here are a few things to keep in mind when filing your first tax return as a married couple.

As with any tax issue, contact your tax professional to help you navigate your own unique situation.

Notify the Social Security Administration (SSA)
If one of you has taken on a new name, report the change to...

Find the full article at http://fpsparkmancpa.blogspot.com/2018/06/newlyweds-tax-tips.html

Custodial Accounts (UTMA/UGMA)
Assets in a custodial account belong to the minor. A custodian, usually an adult relative, controls the assets until the minor reaches the age set by state law (21 in most states).

Assets in a custodial account can be used to pay for...

Find the full article at http://fpsparkmancpa.blogspot.com/2018/05/saving-for-college.html

Business accounting and tax preparation is a dreadful task for most Carolina business owners. Thankfully, in your time of need there is a professional you can trust to turn to for...

Find the full article at http://fpsparkmancpa.blogspot.com/2018/04/business-entity-comparisoncharts.html

If you pay tuition, fees, and other costs for attendance at an eligible educational institution for yourself, your spouse, or your dependent, you may be able to take advantage of one or more of the education tax benefits.

You can claim more than one education benefit in a tax year as long as...

Find the full article at http://fpsparkmancpa.blogspot.com/2018/03/education-taxbenefits.html

A common problem with single-owner and other closely-held corporations is intermingling of funds. This occurs when a corporate shareholder uses his or her personal checking account for corporate deposits or payment of corporate expenses.

Separation of funds can be a key in preserving the liability protection of the corporate veil. Courts can pierce the corporate veil by finding that the corporation is...

Find the full article at https://fpsparkmancpa.blogspot.com/2017/11/business-financing-dont-intermingle.html

Internal Revenue Code section 162 generally allows a current business deduction for the cost of repairs and maintenance incurred during the year. On the other hand, Internal Revenue Code section 263 requires the capitalization of amounts paid to acquire, produce, or improve tangible property. Since repairs and improvements often have very similar characteristics, it can be tricky to classify the expenditures. However, correct classification is important because the cost of repairs can generally be deducted in the year paid, while improvements must be capitalized and the deduction taken over several years through depreciation.

An improvement requiring capitalization occurs with an addition to or partial replacement of property that results in a betterment of the unit of property, restores the unit of property, or...

Find the full article at https://fpsparkmancpa.blogspot.com/2017/09/business-tax-preparation-repairs-vs.html

Tips for Newlyweds
Updating your status from single to married may bring about some unanticipated changes, including changes relating to your taxes. While wedding planners don’t typically use an IRS checklist, here are a few things to keep in mind when filing your first tax return as a married couple.
As with any tax issue, contact your tax professional to help you navigate your own unique situation.

Notify the Social Security Administration (SSA)
If one of you has taken on a new name, report...

Find the full article at https://fpsparkmancpa.blogspot.com/2017/08/newlyweds-tax-tips.html

Business accounting and tax preparation is a dreadful task for most Carolina business owners...

See everything at http://fpsparkmancpa.blogspot.com/2017/03/business-entity-comparisoncharts.html

If you pay tuition, fees, and other costs for attendance at an eligible educational institution for yourself, your spouse, or your dependent, you may be able to take advantage of one or more of the education tax benefits.You can claim more than one education benefit in a tax year as long as you do not use the same expenses for more than one benefit.

Exception: Qualified expenses used to claim education benefits can also be used to eliminate the 10% penalty on premature IRA distributions.

You may claim only ...

Read the full article at http://fpsparkmancpa.blogspot.com/2017/01/education-taxbenefits.html

Employee or Independent Contractor? In order for a business owner to know how to treat payments made to workers for services, he or she must first know the business relationship that exists between the business and the person performing the services. A worker’s status determines what is needed for tax preparation; what taxes are paid and who is responsible for reporting and paying those taxes. A worker performing services for a business is generally an employee or an independent contractor. If a worker is classified incorrectly, the IRS may assess penalties on the employer for nonpayment of certain taxes.

Find the full article at http://fpsparkmancpa.blogspot.com/2016/12/employee-or-independent-contractor.html