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302, 2018

What Is an S-Corporation? And How It Can Reduce Self-Employment Taxes?

February 3rd, 2018|Categories: Blog, Tax Help, tax-services|Tags: |0 Comments

There are many advantages to being self-employed, but with every silver lining comes a cloud in the form of paying higher taxes under the guise of both social security and Medicaid. Collectively, these taxes are referred to as "Self-Employment" taxes. Generally speaking, these taxes are significantly higher than those one would pay if he or she were an employee.  Thankfully, there is a way to reduce overall tax liabilities. What is an S-Corporation? What if there was a way to reduce an individual’s taxes? What if he could pay taxes at the same level he would pay if he were an employee instead of a business owner? The reality is that if an individual turns his sole-proprietorship into an S-Corp, he may be able to avoid paying higher taxes.  If this sounds too good to be true, it generally isn't because one may face a little more scrutiny from the IRS to ensure the individual is filing fully in accordance with all applicable laws, codes, and regulations. Under the normal business structure, the business files its own tax return and pays taxes on its income. Any profits are distributed to the shareholders, where they are taxed again. However, few, if any, small businesses are split into separate entities. Most are a sole proprietorship; in which the business owner pays taxes on the amount of money he earns. Partnerships, similarly, are in many cases, no more than a collection of sole proprietorships; however, the IRS allows partnerships to be recognized as and taxed as a pass-through entity. In this case, all partners are taxed individually rather than under self-employment taxes, saving them all money. We All Pay Taxes No matter whether an individual is an employee or self-employed, he or she can't get away from paying Social Security and Medicare taxes [...]

3101, 2018

How to Effectively Deal with an IRS Audit

January 31st, 2018|Categories: Blog, Tax Help, tax-services|0 Comments

If you have received an alarming notice from the IRS that your tax return needs to be audited, you shouldn’t be worried as it happens to a number of taxpayers every year. To deal with this matter, you need to use your wit and follow some meaningful strategies that are given below: Learn about the Type of Audit Before you do anything and consult anyone to take any kind of help, you first need to know that what type of audits you are facing. Generally, there are three types of audits: field audits, correspondence or mail audits, and office examination audits. Most of the time, it happens to the correspondence audit that the IRS conducts. What you need to do is to answer the questions asked by the IRS in a professional, satisfactory, and efficient manner. The IRS conducts office audits at its local branch and you need to go the branch to face it. However, if you are not very much aware of the tax related things, you are allowed to take your attorney with you. It happens to be a really bad news when one gets a notice of a field audit because it is the most comprehensive one. To face this type of audit, you must get professional IRS audit help services. Give Relevant Answers to the Questions The best you can do is to rightly answer all the questions the IRS asks you. It will depend on the type of audit that what and how many questions the IRS asks. However, there happen to be some general questions that are asked in all the audit types. Did you report all your income? Are your deductions legitimate? Is your business truly a business or a part-time hobby? And there are some other basic questions that the IRS [...]

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