Home Based Business Tax Schemes

Beware of promoters who claim that you can take tax deductions for personal expenses by setting up a home-based business.  These promoters aggressively market and sell “tax reduction packages” which consist of a mangled interpretation of the Tax Code having no merit. The promoters may sound legit by advising you to maintain detailed records of the expenses.  However, detailed records won’t convert personal expenses into
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Categories: SCAMS & SCHEMES and SMALL BUSINESS ADVISORY.

Sham Trusts

“Sham trusts” are names given to certain trusts that the IRS claims are illegal. They can be either domestic or foreign trusts or both. The promoters of these trusts claim that they reduce or eliminate income taxes, but the IRS and the courts disagree and are aggressively pursuing taxpayers who own them and their promoters. The promoters charge high fees to set them up, but
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Categories: SCAMS & SCHEMES, SMALL BUSINESS ADVISORY, and TRUSTS, ESTATES & FIDUCIARIES.

Why The IRS Audits More Small Businesses Than Big Corporations

Why the IRS Audits more Small Businesses than Big Corporations   Many small business owners believe that they are too small for the IRS to audit. After all, wouldn’t the IRS collect more money for the government by auditing larger businesses?   The answer is: no. The IRS brings in more dollars per hour auditing small mom and pop businesses, than they do auditing medium
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Categories: IRS PROBLEMS and SMALL BUSINESS ADVISORY.

Simpler Tax Reporting – Is It Right For You?

The Simpler Tax System—is it Right for You?    Many people are frustrated with the complexity of the Tax Code and want it to be simpler. Their reasoning goes something like this: “I am a business owner, not a junior accountant, why do I have to keep all of these records. Why can’t it be simpler?”   Well, the government understands your frustration and is
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Categories: Sacramento Personal Taxes and SMALL BUSINESS ADVISORY.

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.

Reducing Liability by Segregating Assets

To help hold onto what you’ve worked hard to accumulate and to manage risk (especially for business owners) it’s important to segregate assets and activities into separate legal buckets. The separate buckets should be put into place BEFORE the threat of legal action or the court may rule that a fraudulent conveyance occurred. The number of buckets needed will depend on the type of activities
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Categories: ASSET PROTECTION 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.

Insurance for the Home Based Business

Small business owners are often very good at what they do. As entrepreneurs, they run their businesses like the great offensive coaches in professional sports. A great offense is a good thing, but offense alone will not win the big games. A truly great team or business must develop a great defense as well. An effective defense comes into play as a company puts the
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Categories: SMALL BUSINESS ADVISORY.