The Consequences for Failing to Comply with the 1099 Rules

If your business paid someone (who was not your employee) a total of $600 or more during the year, you must issue a 1099 to them (unless it is a corporation). For attorneys, 1099s are required even if incorporated or regardless of their entity type. In addition 1099s must be filed with the Internal Revenue Service. The 1099 filing requirement applies for payments made by
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Categories: BUSINESS TAX STRATEGIES, CORPORATIONS & LLCs, and SMALL BUSINESS ADVISORY.

1099s: The IRS’ War on Underreporting—Don’t Get Caught in the Crossfire

The IRS has declared war on the underreporting of income and is taking the most aggressive approach ever in their ability to enforce compliance with new 1099 regulations. Many IRS auditors are now denying deductions for payments by businesses that fail to issue required 1099s, even if unintentional. The IRS penalty trap Since 2012 business tax returns have two questions that all businesses must answer,
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Categories: CORPORATIONS & LLCs and SMALL BUSINESS ADVISORY.

Transferring Risk Using Insurance for Commercial Businesses

California law requires that business owners act responsibly in managing the risks common to their industry and to protect against other areas of vulnerability. Businesses should consider transferring a large part of its risk to an insurer (which has deeper pockets) to protect against the full impact of an uninsured loss, which could threaten its viability. Home-based businesses If you operate your business from home,
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Categories: CORPORATIONS & LLCs and SMALL BUSINESS ADVISORY.

Independent Contractors—Factors to Consider

Whether a worker is an employee or independent contractor depends on the right or ability of a company to exercise control over the worker. An employee is subject to the will and control of the employer not only as to WHAT shall be done but HOW it shall be done.  In contrast an independent contractor (contractor) is engaged to provide a finished project or job.
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Categories: CORPORATIONS & LLCs, EMPLOYEES & HR, and SMALL BUSINESS ADVISORY.

Reducing Liability with Good Business Practices

Business owners need to demonstrate good business practices in order to reduce their company’s liability and to prevent personal liability themselves. Operating a business through an LLC or corporation won’t protect your home and personal property from business lawsuits and creditors if you don’t also demonstrate good business practices. The following are some of our recommendations: Maintain the corporate or LLC veil of protection.  Even
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Categories: ASSET PROTECTION, CORPORATIONS & LLCs, and SMALL BUSINESS ADVISORY.

Does your LLC or Corporation have Legal Standing?

The vast majority of small business LLCs and corporations in California may lack legal standing due to being improperly formed. To be properly formed under California law: LLCs must file articles of organization with the Secretary of State. These articles must be formally adopted by its members along with a signed operating agreement during its initial organizational meeting and recorded in the first minutes and
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Categories: ASSET PROTECTION, CORPORATIONS & LLCs, and SMALL BUSINESS ADVISORY.

Proper Formation and Maintenance of LLCs and Corporations is Mandatory

Proper formation of your LLC or corporation is mandatory to have legal standing in California. LLCs that lack operating agreements and corporations without approved bylaws may not be protected in California. Without legal standing your home and personal assets could be exposed to business lawsuits, liens and creditors. (See our article: “Does your LLC or Corporation have Legal Standing?” for details). Not only are operating
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Categories: ASSET PROTECTION, CORPORATIONS & LLCs, and SMALL BUSINESS ADVISORY.

Alter Ego Blunders—Piercing the Corporate Veil

If your company is sued, can you be held personally liable? Many people form LLCs and corporations to protect their home and personal assets from business judgments, but the vast majority of small corporations and LLCs have absolutely NO protection, because their owner’s commit alter ego blunders. Alter ego means that the company appears to be an alternate version of the owner; that the law
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Categories: ASSET PROTECTION and CORPORATIONS & LLCs.

LLC and Corporation Compliance Program

The Rules for operating an LLC or corporation are complex and NOT COMPLYING with them can cost you thousands of dollars. We can take the burden off of you in keeping your LLC or corporation in compliance with the law to protect your tax benefits and protect your home and personal property from business liability. We have created an on-going year-round compliance and tax planning
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Categories: ASSET PROTECTION, CORPORATIONS & LLCs, and SMALL BUSINESS ADVISORY.

Which Tax & Regulatory Laws Did You Unknowingly Violate Today?

The problem today is that most small business owners are violating dozens of tax and business laws that they don’t even know exist.  Business owners already struggle to make a living while trying to comply with the very complex Tax Code.  They generally don’t have the time or resources in meeting all of the regulatory requirements that our government has placed before them, or even
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Categories: CORPORATIONS & LLCs.