Shutting Down Sole Proprietorship

What Are the Tax Implications of Shutting Down a Sole Proprietorship?

As you consider shutting down your sole proprietorship or your single-member LLC treated as a sole proprietorship for tax purposes, it’s crucial to understand the tax implications of this decision. Here’s an overview of key points you need to consider. Sole Proprietorship Asset Sale Tax Implications When you sell a sole proprietorship, you sell its...Continue reading

Self-Employment Taxes

Limited Partners and Self-Employment Taxes

Self-employment taxes are substantial, and most people want to minimize them. Self-employed taxpayers often avoid self-employment taxes by operating as an S corporation. The distributions from the S corporation are not subject to self-employment tax. But Social Security and Medicare tax must be paid on the shareholders’ employee compensation (which must be reasonable based on...Continue reading

BOI Reporting

BOI Reporting Deemed Unconstitutional for Some

On January 1, 2024, the Corporate Transparency Act (CTA) went into effect. The CTA requires most smaller corporations, most limited liability companies, and some other business entities to file a beneficial ownership information (BOI) report with the U.S. Department of the Treasury Financial Crimes Enforcement Network (FinCEN). The BOI report identifies and provides contact information...Continue reading

dirty dozen

IRS Dirty Dozen List: Triggers IRS Scrutiny

For over 20 years, the IRS has issued an annual Dirty Dozen list identifying tax scams and avoidance schemes. This year’s list includes everything from employee retention credit claims to the use of fake charities. Before you invest your hard-earned money in these or other highly promoted tax schemes, you should check the IRS Dirty...Continue reading

Vehicle Tax Deductions for 2023

Last-Minute Purchases to Maximize 2023 Vehicle Tax Deductions

Looking to maximize your vehicle tax deductions for 2023 and wondering if there's still time? - Do you need a replacement business car, SUV, van, or pickup truck? - Do you need tax deductions this year? - Do you need a tax credit to offset what you owe to the IRS? 2023 Tax Credits /...

2023 Tax Strategies

Last-Minute: 2023 Tax Strategies for Marriage, Kids, and Family

It's not too late to consider 2023 tax strategies. Are you thinking of getting married or divorced? If so, consider December 31, 2023, in your tax planning. Here’s another planning question: Do you give money to family or friends (other than your children, who are subject to the kiddie tax)? If so, you need to consider...Continue reading

Writing Off More Than One Vehicle

Can You Write off More Than One Vehicle?

Are you hoping to write off more than one vehicle and have been told you can't? Contrary to popular belief, the IRS does not limit business owners to claiming deductions on only one business vehicle. When Should You Write Off More Than One Vehicle? You might maximize tax benefits by using multiple vehicles for business...Continue reading

Home Office Deduction as a Corporation

Will Your Home Office Deduction Pass the Muster in an IRS Audit or Raise Red Flags?

With more people working from home, one has to wonder if the home-office deductions on tax returns are out of control or warranted. Will the IRS be scrutinizing home office deductions and what do they look for. In short, will your home office deduction pass in an IRS audit or will it raise red flags?...Continue reading

Filing Form 8275

When to File Form 8275 to Avoid Penalties

Form 8275 is filed to disclose all types of tax positions.  When you're considering taking an aggressive position on your tax return that could result in a substantial tax reduction, but you're worried about having to pay a penalty, talk with Ken-Mar Tax for a free consultation. As an Enrolled Agent, Ken Weinberg is up-to-date...Continue reading

Home-Office Deductions for Orthodontist

Home-Office Deductions for Orthodontists

Q&A: Home-Office Deduction for Orthodontist Question: Bob, an orthodontist, wants to claim a home-office deduction.  His employees and contractors do the billing and accounting for his practice. Bob and his wife (who is an employee) do payroll once a month in the home office.  Bob’s primary use of the home office is preparing treatment plans...Continue reading

Airbnb Rental Income and Self-Employment Tax

Do I Need to Pay Self-Employment Tax on Airbnb Rental Income?

In Chief Counsel Advice (CCA) 202151005, the IRS opined on this issue. But before we get to what the IRS said, understand that the CCA’s conclusions cannot be cited as precedent or authority by others, such as you or your tax professional. Even so, we always consider what the CCA says as semi-useful information, so here’s some...Continue reading

regular use of home office deduction

What Qualifies as Regular Use for the Home-Office Deduction?

To deduct an office in the home, you must pass the regular-use test, so  what is regular use for the home-office deduction? (Side note: this is a re-post of content created in 2011 and references tax cases from the 70's that laid a foundation for determining how to define "regular use" for the home office...Continue reading

Deduct a Home Office

Can You Deduct a Home Office if You Have Another Office Outside the Home?

Question: Can you deduct a home office if you also have a non-home office? Answer: Yes! As the tax reduction specialists for the self-employed we navigate through the home office deduction issues regularly.  We know what the IRS looks for and what you will not get away with. SO let's make sure your tax reduction...Continue reading

self-employed tax expert Cleveland

When Do I Have to Pay Self-Employment Taxes?

What Are Self-Employment Taxes? Do I Pay Them? Self-employment taxes are to individual business owners what payroll taxes are to employers and employees. They fund Social Security and Medicare.  All individuals with self-employment income must pay self-employment taxes, regardless of their age. When business owners reach retirement age, they’ll be able to collect Social Security...Continue reading

Converting from LLC to S Corp in Cleveland

S Corporation: Common Mistakes When Converting

Looking to convert to an S corporation? At first glance, the corporate tax rules for forming an S corp  appear simple.  They are not. In this article, we do two things: First, we help you avoid the potholes that destroy your S corp. Imagine what a shock that is—to find out that what you thought was...Continue reading

Landlords Tax Reduction Cleveland

Landlords and Business Owners: New Law Improves Energy Tax Benefits

Landlords and small business owners should know the newly enacted Inflation Reduction Act contains tax credits and depreciation benefits for owners of commercial property and residential rental property.  As a Cleveland landlord, or small business owner, if you implement various types of renewable energy improvements, you can qualify for hefty tax credits or deductions.  One...Continue reading

home office deduction for pool table

Home-Office Deduction: What if I Have a Pool Table in the Office?

Home-Office Deduction Question: I heard that if I had an office in my home and in that home-office room I had a pool table, I could simply subtract the amount of square footage that the pool table takes up from the square footage of the office. I do have a pool table, and I actually...Continue reading

electrical vehicle tax deductions

New Business Tax Credits for Buying Electric Vehicles

The Inflation Reduction Act of 2022 amended the Clean Vehicle Credit, and added a new requirement for final assembly in North America that took effect on August 17, 2022.  Three major things to know about this new law when it relates to tax planning for your business and buying an electric vehicle: 1.The existing electric vehicle...

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