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Many companies I work with are strapped for cash. They look all over their operation to find where they can save money and improve their cash flow but they are missing a possible gold mine. Congress has created great cash flow tools for small business and most people are either are too short sighted to see them or are not using their tax advisors to their benefit. It is not too early to start thinking about tax planning for year end. Let’s start with the difference between

It is not uncommon for sellers to self-finance the real estate, both personal and business, that they want to sell. In many cases this may be the only way an owner can sell their property as many buyers cannot qualify for financing or the real estate will not satisfy the requirements of a lender. Also, buyers may not have the required funds for a down payment. So, how can the owner sell the property? They can carry the loan and self-finance the transaction. This means that th

How to save tax dollars by hiring family members Child employed by parents Payments for the services of a child under age 18 who works for his or her parent in a trade or business are not subject to social security and Medicare taxes if the trade or business is a sole proprietorship or a partnership in which each partner is a parent of the child. Refer to the “Covered services of a child” section below. Payments for the services of a child under age 21 who works for his or h

Rental property lease terms can cost tax dollars Folks renting new office space or commercial stores need to understand the tax implications of the terms of the contract or lease. In many cases the landlord will pay a broker to aid in finding a new tenant. Also, some landlords will provide the tenant with incentives to sign leases such as, free rent for a period, improvements (called leasehold improvements), lower rent in early years and increasing over time, or actually give

Beware of misclassification of an employee Treating employees as non-employees You will be liable for social security and Medicare taxes and withheld income tax if you do not deduct and withhold them because you treat an employee as a nonemployee, including yourself if you are a corporate officer, and you may be liable for a recovery penalty. Refer to Publication 15, Circular E, Employer’s Tax Guide for details about the trust fund recovery penalty or Independent Contractor

20 Factor IRS Test The IRS uses a 20-factor test to determine whether a person is an employee. In connection with this test, the IRS has stated the following: . . . 20 factors have been identified that indicate whether enough control is present to establish an employer-employee relationship. The degree of importance of each factor varies depending upon the occupation and the context in which the services are performed. It does not matter that the employer allows the employee