We have split out FAQs specifically for LLCs and S-Corps into a separate category. Please expand the menu tree to the left under LLCs / Small Biz or click here to start reviewing questions and answers specific to LLCs and S-Corps. Separate PDFs are also available- ...

By Jason Watson (Google+) This KnowledgeBase posting is a reprint of our Hobby Versus Business Article. What Is The Difference Between A Hobby And A Business? The hobby versus legitimate business is a common question. First, the IRS suggests that incorrect deduction of hobby...

By Jason Watson (Google+) The hobby versus legitimate business is a common question. We have written a separate article on this topic, and you can download it from our website under the KnowledgeBase tab or use this link- www.watsoncpagroup.com/Hobby.pdf Here is a quick summary-...

By Jason Watson (Google+) The IRS uses two rules for determining if an expense is deductible- in general, you may deduct ordinary and necessary expenses for conducting a trade or business. An ordinary expense is an expense that is common and accepted in your trade or business. A necessary...

By Jason Watson (Google+) They are all corporations, yet there are some subtle differences. Technically there are only two corporations, limit liability corporations (LLCs) and corporations (C-Corp). An LLC is NOT treated as a separate entity in the eyes of the State, while a corporation...

By Jason Watson (Google+) A common complaint from those who own their own business is self-employment tax. Can you avoid it? Yes, to a large extent actually but it takes some effort. If you own a business as a garden variety single-member (one owner) LLC, your business income will be...

By Jason Watson (Google+) Maybe. The IRS defines a trade or business as an activity carried on for a livelihood or in good faith to make a profit. IRS Revenue Ruling 58-112 further characterizes a trade or business activity as one that is regular, frequent and continuous. So, if you earn...

By Jason Watson (Google+) Very easy. We can do all the filings with the Secretary of State (for any state), and our fee is $50 plus the state filing fees ($50 to $125). We’ll also obtain your Employer Identification Number (EIN) from the IRS and create an Operating Agreement. These...

By Jason Watson (Google+) Most people don’t buy anything without knowing the price ahead of time. So, we offer a narrow fee range for your corporate tax return preparation - you know upfront what you will be charged. A single-owner (single-member) LLC’s income or loss will flow...

By Jason Watson (Google+) The strongest reason for using a professional bookkeeping service is- you do what you do best with your time; let us do what we do best with our time. QuickBooks is good, but it does not prevent you from entering erroneous or incomplete data. You can quickly spend...

By Jason Watson (Google+) Of course! Because of privacy concerns, we cannot provide that information on our website. However, please call or email us, and we can send you our list of references. Please understand that because many of our competitors would like to have our client list, we...

By Jason Watson (Google+) Trick question.  The amount of refund (or in some cases tax owed) is largely dependent on tax withholdings throughout the tax year in addition to various one-time tax credits.  Yes, we maximize your deductions. Yes, we ensure that you are claiming...

By Jason Watson (Google+) Self-employment income is taxed at two different levels- first, the net profit is taxed for social security and medicare benefits which is currently 13.3%. This is also referred to as self-employment (SE) tax. Next, your profit is taxed for personal income. ...

By Jason Watson (Google+) Payroll tables can be problematic in an insidious way throughout the year. There are two situations that you should be aware of- First, those of you that have large swings in compensation from check to check can find themselves unnecessarily giving money to...

By Jason Watson (Google+) Look out PayPal merchants, and the like. The IRS is on to you, and they’ve solicited help from intermediaries such as PayPal, Google, Yahoo, Amazon, etc. The days of selling a bunch of stuff for essentially cash and pocketing some tax-free money is over....

By Jason Watson (Google+) There are several options but predominantly there are two- EFTPS: The Electronic Federal Tax Payment System is a free service from the US Department of the Treasury. All federal taxes can be paid using EFTPS. You can make payments via their web site, a voice...

By Jason Watson (Google+) You can.  In two scenarios. First, if you are self-employed there are provisions allowing you to deduct the cost of health insurance premiums. Second, if your health insurance premiums are paid out-of-pocket as an after-tax expenses.  Typically...

By Jason Watson (Google+) If you use part of your home for business, you may be able to deduct expenses for the business use of your home, but there are some rules. To qualify to deduct expenses for business use of your home, you must use part of your home: Exclusively and...

By Jason Watson (Google+) No. But there is a small silver lining. The IRS in Publication 463 (Travel, Entertainment, Gift and Car Expenses) is very specific regarding deducting club dues and membership fees. Any club that is organized for pleasure, recreation OR other social purposes is...

By Jason Watson (Google+) Perhaps. There are three options- Section 179: There is a provision in the tax code allowing you to deduct the entire purchase provided the property was new when purchased and you used it more than 50% of the time for business. You can take a Section 179...