Business Strategies

When people reach out to me about reducing their tax bill, there are two things that they bring up. The first is starting an LLC, and the second is converting their business to an S-Corp. When I ask why they think an S-Corp will help, the common knee jerk reaction response is to eliminate self-employment tax. It is true that their net income will no longer be subject to self- employment tax and neither will their distributions. However, what they fail to learn in their S-Corp online class from YouTube university is that they need to be on payroll if they are working in the business. Not only that, but they also need to receive reasonable compensation while on payroll. So, what happens if they go a year or two without being on payroll before they find this out? The TFRP is the biggest ouch a business owner can face and threatens to close businesses each year. It's the penalty that business owners pay for stealing from their employees and the IRS. To better understand it, let's look at what the trust fund is, how the IRS calculates the penalty, and who is responsible.

We've been expanding our conversation on how a solid online presence is crucial for professionals in every field, including Certified Public Accountants (CPAs). So far, we covered Linkedin and X (previously Twitter). In this article, we will delve into Instagram, a platform traditionally dominated by lifestyle, fashion, and food influencers; it now offers a unique opportunity for accountants and CPAs to connect with potential clients, showcase their expertise, and provide an insider's view into their work processes. We will explore creative ways you can leverage Instagram to enhance your professional brand and connect with your audience through engaging visual content and storytelling. Unlike LinkedIn and X, you can post on Instagram (IG for short) in three main ways.

Gather 'round, pardners! The Employee Retention Credit (ERC) has been the latest gold rush in the tax frontier, drawing business owners, tax deputies, and even a few sly outlaws. But as the dust settles, the IRS—our law keeping sheriff—is on the hunt for any who might’ve bent the rules. In this frontier of finance, knowing who’s who can keep you out of trouble as the IRS rounds up dubious claims.

Professionals across various fields use X (Twitter) as an essential tool to establish thought leadership, engage with their communities, and grow their influence. For accountants, X offers a unique opportunity to share industry insights, participate in relevant conversations, connect with influencers, and demonstrate expertise. Let's explore how you, the accountant, can leverage X to your advantage, offering practical strategies and real-world examples.

The story of James J. Maggard has some interesting and possibly valuable lessons. The one that strikes me as particularly important is that it makes it crystal clear that disproportionate distributions contrary to a corporation’s governing documents will not blow its S election. That does not mean that disproportionate distributions are just fine and that you don’t need to address them. There is a practical lesson about being careful who you take on as fellow shareholders. And there is another slightly odd lesson, that almost makes me want to create a new law of tax planning: Don’t deliberately involve the IRS in your business disputes. Their job is not to help you.

Networking has transcended physical boundaries into a digital world in the last five years. Of all the social media platforms, LinkedIn stands out as ideal for professionals across industries to connect, engage, and build meaningful relationships. For accountants, leveraging LinkedIn effectively can be a game-changer in expanding their professional network, attracting clients, and establishing thought leadership. In this article, I will discuss how accountants can harness LinkedIn's power to enhance their visibility, credibility, and business success. Some features are only available in Business or premium membership. Still, I am providing you with all the resources LinkedIn offers. Let's get started.

Twice in my four-decade career, two special agents from IRS Criminal Investigation (CI) entered my office armed with a search warrant, firearms at their side. In both cases, it started the same way.

Are you aware of your responsibilities when it comes to securing data? Do you know what your software vendor is doing with your data—and, more importantly, your client’s data? Signing up for a new service or software is often done without any thought of the consequences to the data that you are legally required to protect. The average tax professional uses many different types of software and services when working with a client. Many tax pros are unaware that this often requires consent to be obtained prior to using their client’s information and that failure to do so can result in significant fines and even criminal penalties.