After Tax Reform, Which Is Right for You: S Corp or C Corp?

The Tax Cuts and Jobs Act has left many of today’s businesses with big questions.  Incorporation remains a hot topic, but this law is shaking things up.  It’s quick to assume your company should be one or the other, but without careful consideration of the facts, your organization may end up facing financial loss, hefty tax penalties or missed tax savings.

The goal of this type of incorporation is to minimize tax burdens, but the wrong decision can be costly.  In a C Corp, the company pays corporate taxes to the Internal Revenue Service.  But, in an S Corp, there’s no entity tax.  Rather, taxes are paid through an individual return.

Tax Reform 2.0 – Stay Tuned

Another Round of Tax Changes Under Consideration

The dust has not yet settled from the Tax Cuts and Jobs Act (TCJA), passed into law in December 2017, and the House Ways and Means Committee is already considering another round of tax changes.  The committee chair, Kevin Brady, Republican from Texas, wants to include input from stakeholders such as business groups, think tanks and other relevant organizations.  Historically, major tax reforms have been decades apart, so the committee chair is looking for another approach to the way Washington deals with tax policy.

Nine Accounting Mistakes Small Business Owners Make

How to Overcome Common Financial Mistakes

Most small business owners are an expert in their field, but not necessarily in the accounting aspects of building a business.  And, with this comes a few common mistakes. Yet, even simple small business accounting mistakes can prove to be financially limiting and costly down the road.  With the help of an accounting professional, it is possible to overcome at least some of these mistakes. Take a look at some of the most common mistakes and how to avoid them.

Choosing Your Accounting Method Under New Tax Laws

What Does This Change Mean for Your Business?

Businesses today must take a closer look at their accounting methods.  Since the passage of new tax laws, with changes to thresholds for choosing accounting methods, all companies need to take an inward look at their current accounting methods to determine if they are the most beneficial permissible method applicable.  It is important to work closely with accounting professionals here — making changes as well as decisions on how accounting methods need to be updated. 

Minimizing Tax on Social Security Benefits

Understanding the Taxability of Your Social Security Benefits

How much (if any) of your Social Security benefits are taxable depends on a number of issues. The following facts will help you understand the taxability of your Social Security benefits.

  • For this discussion, the term “Social Security benefits” refers to the gross amount of benefits you receive (i.e., the amount before any reductions due to payments withheld for Medicare premiums).  For tax purposes, Social Security benefits are treated the same regardless of whether the benefits are paid due to disability, retirement, or reaching the eligibility age.  Supplemental Security Income benefits are not included in these computations because they are not taxable under any circumstance.

You May Not Get a Tax Refund Next Year

Be overly Cautious About Your Payroll Withholding for 2018

With all of the tax reform changes and the corresponding reductions in most taxpayers’ income tax withholding, there are serious concerns that the reduction in withholding, although providing more take-home pay now, could end up resulting in unexpected taxes due at tax time next year. For that reason, taxpayers should be overly cautious about their payroll withholding for 2018.  One need only look at the W-4 instructions to realize that an individual without any substantial tax training can quickly become lost when filling out the worksheets.  It is not business as usual.