Category Archives: Business Tax

Taxpayers The IRS Is Targeting This Year

Posted on February 20, 2013 by dannynelson • 0 Comments

Out of the millions of tax returns that are filed with the IRS each year, a certain percentage are inevitably flagged and chosen to be audited. In some cases, this is because the taxpayer filing the return is already being investigated for tax fraud or other crimes, while other returns are merely selected at random. The formula that the IRS uses to flag returns for random audit, known as the Discriminant Function, is a highly classified secret known only to a few. However, there are several types of returns that the IRS tends to focus on in general. Filers with returns that fall into one of these categories must accept that there is a higher probability that they will be audited than other taxpayers. Some of the types of returns that the IRS tends to scrutinize more closely include:

2013: a window of opportunity for S corporation asset sales

Posted on February 19, 2013 by dannynelson • 0 Comments

In general, when an S corporation sells its assets, the gain on sale flows through to, and is reportable by, the shareholders and is not subject to a corporate level tax. In the case of an S corporation that previously was a C corporation, however, such S corporation is subject to a corporate level tax… Continue Reading

Online sales taxes back on Senate’s docket

Posted on February 18, 2013 by dannynelson • 0 Comments

A proposal to allow states to collect online sales taxes will be reintroduced in the Senate on Thursday, with support for the measure growing among Republican and Democratic governors and state legislators. On the heels of President Barack Obama once again tagging a U.S. tax code overhaul as a top priority in his State of the Union… Continue Reading

S corporation distribution treated as wages subject to FICA taxes

Posted on January 30, 2013 by dannynelson • 0 Comments

Judging by the number of recent cases on this issue, both taxpayers and the IRS have figured out that if the owner of an S corporation withdraws all of the earnings of the business conducted by the corporation in the form of dividends rather than as wages, he avoids paying the FICA taxes on those… Continue Reading

Guidance issued on additional Medicare tax

Posted on December 7, 2012 by dannynelson • 0 Comments

The IRS issued proposed regulations concerning the 0.9% Medicare surtax, which takes effect next year (REG-130074-11). The proposed regulations contain guidance for employers and individuals on the implementation of the tax, including the requirement to file a return reporting the tax, the process for employers to make adjustments of underpayments and overpayments of the tax,… Continue Reading

Standard mileage rates go up a penny in 2013

Posted on November 29, 2012 by dannynelson • 0 Comments

Optional standard mileage rates for use of a vehicle will go up by 1 cent per mile for 2013, the IRS said Wednesday (Notice 2012-72). Taxpayers can use the optional standard mileage rates to calculate the deductible costs of operating an automobile. Read more at the Journal of Accountancy… Continue Reading

Employers hiring qualified veterans before the end of the year may be eligible for expanded tax credit

Posted on November 23, 2012 by dannynelson • 0 Comments

Employers who act now may be able to claim an expanded tax credit for hiring certain qualified veterans. According to the IRS, both for-profit and tax-exempt employers may qualify to receive thousands of dollars through the expanded Work Opportunity Tax Credit (WOTC) should they hire qualified veterans who begin work before January 1, 2013. Read… Continue Reading

The time for family business owners to act is now

Posted on November 14, 2012 by dannynelson • 0 Comments

Succession planning is one of the most challenging and complicated concerns family business owners face. Succession planning can be difficult for most companies, but it’s even more complex for family businesses because typical business concerns need to be balanced with the family’s needs. Read more at cpa2biz.com… Continue Reading

Developments in tax reform: a focus on capital gains and corporate tax rate

Posted on September 25, 2012 by dannynelson • 0 Comments

Looking ahead to the lame duck session of Congress after the November elections and into the new year when the new 113th Congress will be seated and we will have either a second Obama administration or a new Romney administration, there are increasing developments on the expected debate on tax reform. While nothing will happen… Continue Reading

Federal law preempts Alabama statute denying tax deduction for illegal alien employees

Posted on August 27, 2012 by dannynelson • 0 Comments

The Eleventh Circuit Court of Appeals held that the section of Alabama House Bill 56 that disallowed an employer a state tax deduction for wages and compensation paid to an alien unauthorized to work in the United States was preempted by federal immigration law (United States v. Alabama, No. 11-14532 (11th Cir. 8/20/12)). Thus, Alabama… Continue Reading