6 Facts About Late Filing and Late Payment Penalties

1. If you are owed a refund, there is no penalty for filing late

The IRS will simply hold onto your money until you do submit your return. The thing is, you must file your taxes within three years of the original deadline to claim your refund or you will lose your right to it.

2. If you owe taxes and do not file your return by the deadline, you will face a late filing penalty

Currently, you will be charged 5% of the taxes you owe for each month you fail to file past tax day. The maximum fee is 25% of the taxes you owe.

3. If you have not filed within 60 days of the tax deadline, you will owe a fee

Your fee will either be $205 or 100% of your unpaid taxes, whichever is less.

4. If you file your return but you don’t pay your tax bill by the deadline, you will owe a late payment penalty

The current penalty is equal to 0.5% of the taxes you owe for each month you fail to pay your taxes past tax day. The maximum fee is 25% of the taxes you owe.

5. If you don’t file a return or pay your bill, you aren’t penalized twice

Instead, the 0.5% late payment fee will be waived.

6. If you requested an extension, you will not be charged a penalty

(more…)
How to Pay Yourself in an S Corporation

1

Pay yourself a salary as an employee if you perform employee-type functions, like serving as an accountant or lawyer. Make your pay equivalent to executives or employees in similar businesses. Withhold income tax, Social Security and unemployment taxes the same way they are deducted from a non-shareholder employee or a worker in another company. Deduct them from income as operating expenses.

2

Take your S corporation income as shareholder distributions to avoid having to withhold taxes. Make this distribution appropriate to your role in the S corporation. Refer to IRS guidelines if you are sole owner of an S corporation who also performs services like accounting or legal filings. Courts have held that a company cannot avoid federal payroll taxes with income distributions, even for sole owners.

3

Combine distributions and wages if you perform some essential employee functions for the corporation; pay should “generally be commensurate with your duties,” the IRS says. Split net income of $150,000, for instance, with $50,000 in wages and $100,000 in distributions if your duties qualify you as an employee.

Read More
Six tips for people starting a new business

Choose a business structure. The form of business determines which income tax return a business taxpayer needs to file.

Choose a tax year. A tax year is an annual accounting period for keeping records and reporting income and expenses.

Apply for an employer identification number. An EIN is also called a federal tax identification number.

Have all employees complete these forms:

Form I-9, Employment Eligibility Verification U.S. Citizenship and Immigration Services

Form W-4, Employee’s Withholding Allowance Certificate

Pay business taxes. The form of business determines what taxes must be paid and how to pay them.

Visit state’s website. Prospective business owners should visit their state’s website for info about state requirements.

#business #smallbusiness #cpa #corporation #taxes #taxexpert #elmeromerodelosimpuestos #mrexpertotax #albertoguerrero #expertotax

Read More
IRS May Make It Harder to Avoid Declaring Crypto on Tax Returns

According to a Wall Street Journal report Friday, the Internal Revenue Service plans to reposition a question on the 1040 income tax form for 2020 that will require all returnees to check a box if they have transacted any crypto assets over the year.

An IRS draft of the 1040 shows that the question placed near the top of the form will likely read: “At any time during 2020, did you sell, receive, send, exchange or otherwise acquire any financial interest in any virtual currency?”

#business #cpa #crypto #bitcoin #smallbusiness #taxes #taxexpert #whittier #1040 @IRS @expertotaxservice #elmeromerodelosimpuestos #mrexpertotax

Read More
Advantages of Accounting

Maintenance of business records.

Preparation of financial statements.

Comparison of results.

Decision making.

Evidence in legal matters.

Provides information to related parties.

Helps in taxation matters.

Valuation of business.

#business #smallbusiness #cpa #taxadvi #irs #accounting #sidebusiness #sidehustle #businessowner #love #instagram #taxservices

Read More
Finding the Right Accountant for Your Small Business

An accountant can help you set up an accounting system, maintain financial documents, audit your books and create financial goals for your business.

They should review your business financials regularly, not just at tax time.

Look for an accountant who has the proper credentials and a good understanding of tax laws, accounting software, and business management. 

Managing your company’s finances can be difficult if you aren’t familiar with debits, credits and recording transactions, but who says you have to go it alone? An accountant can provide the financial expertise and guidance you need to run your business effectively. 

Cpa near me. CPA. EA. Bookkeeping. Accountant. Accounting. Tax Services.

#business #smallbusiness #cpa #ea #bookkeeping #whittier #taxseason #taxservices #accounting #sidebusiness #sidehustle #businessowner #love #instagram #hire #corporation #llc #growbusiness #photooftheday

Read More
6 ways to recover after covid-19.

1. Assess the Financial Damage

2. Take a Second Look at Your Business Plan

3. Consider Whether You’ll Need Funding to Recover

4. Revamp Your Budget to Account for New Spending

5. Develop a Time Line for Rebuilding

6. Adapt to the new way of doing business, go virtual, go delivery, or go for new apps, go for social media to generate more business #businesstaxes #taxpreparation #bookkeeping #contabilidad #smallbusiness #taxes #business #businessowner #businesswoman #businesslife #photooftheday #happy 

Read More
Starting a Business: License and Permit Checklist

General business license. … “Doing business as” license or permit. … Federal and state tax identification number. … Sales tax permit. … Zoning permit. … Home occupation permit. … Professional/occupational licenses. … Health permits.

#business #businessowner #businesswoman #businesslife #photooftheday #happy #followme #friends #business #love #permits #live #licenses #sidebusiness #sidehustle #taxes #inc #llc #taxes #taxdeduction #taxstrategy #taxseason #startup #contabilidad #smallbusiness #checklist

Read More