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NO! The IRS views this as stealing from the government and from your employee. These funds are being held in trust for the employee to pay his/her taxes. This is the most common way that small businesses with employees get in trouble with the IRS. While the small business owner may view his activities in […]

Unreported income is huge deal to the IRS. The agency recently estimated that the U.S. loses hundreds of billions per year in taxes due to unreported income. Considering the amount of lost revenue, it’s not surprising that the IRS has a process for determining unreported income. The IRS is more than happy with just about any method you […]

Most employers are required to file Form 941, Employer’s Quarterly Federal Tax Return, to report both the federal income taxes you withheld and the FICA taxes you withheld and paid during a calendar quarter. (Employers who qualify for annual reporting/payment, file Form 944.) Form 941, Employer’s Quarterly Federal Tax Return. Employers use this for to: report income taxes, social security tax, or Medicare tax withheld from employee’s paychecks, […]

April 15 is the annual deadline for most people to file their federal income tax return and pay any taxes they owe. By law, the IRS may assess penalties to taxpayers for both failing to file a tax return and for failing to pay taxes they owe by the deadline. Here are eight important points […]

Income Tax W2 – This is employee wage income. Withholding is usually held by the employer to pay off the employees taxes. Try to be accurate in the amount of exemptions (deductions) you take. 1099 (1099-MISC) – This is income earned by independent contractors. A persona receives a 1099 at the end of the year, […]

NO! … but there are options. If you want to keep the business open and not make any changes whatsoever, you have to either pay in full or enter into an installment agreement. The IRS can and will work with you as long as the payment arrangements can pay off the IRS as quickly as […]

Yes. Your organization is still a business and is subject to the same requirements as a for-profit organization in terms of payroll, as well as your salary, office supplies and marketing. It is the bottom line that is affected by the non-profit status. To the extent that such profits are used to further the charitable […]

The IRS is aware of your sole prop.’s income, unless it is an all cash business and does not maintain a bank account. Banks are required to report to the IRS interest payments made on accounts on a regular basis. Any clients that pay for your business’s services or goods for business reasons will report […]

It depends (am I an attorney, or what?). Corporations exist to protect the owner(s) from legal liability. If your business can be sued, it is a good idea to incorporate. This includes just about anyone whose business entails any form of risk. A corporation also is helpful is distinguishing your business from your person for […]

The IRS can file your tax returns for you based on income reported by third parties (jobs, contracts, banks, credit cards, etc…), assess liabilities against you, allow interest and penalties to be imposed and grow and collect then against these liabilities as though you had filed the returns and not paid your tax due. A […]