Basic Rules for Paying Estimated Taxes

This is topic no one really wants to discuss because most people dislike paying the IRS on a quarterly basis.  Who wants to take money from their earnings to pay Uncle Sam?  To date, we have not found anyone that enjoys this process.  But it is a necessary evil.  Failing to pay estimates can lead to large tax bill at the end of the year including a significant amount of penalties.  This blog reviews the basic rules for paying estimated taxes. Continue reading…


Home Office Deduction Alternative

Deducting your home office is usually a debated expense to take on your tax return.  You may be reluctant to take this deduction because you did not keep good business records to claim the deduction.  Recently, the IRS announced an optional safe harbor method for determining your home office deduction.   If the safe harbor method is used, you are not required to keep records.  Continue reading…


Tax Help Question – LLC Taxed as S-Corp and Trust Fund Penalties

Question:  In IRS Publication 3402, Taxation of Limited Liability Company, it states that an LLC can elect to be classified as a S corporation.  Does an individual member of an LLC that has elected S corp status have the same protections from personal liability for payroll taxes as an individual member of an LLC that has elected C corp status?  Stated differently, does the IRS have to conduct a trust fund investigation to impose personal liability on individual members of an LLC that has elected S corp status?  Continue reading…


Accounting Firm Hit with Trust Fund Penalties for Payroll Taxes Owed by thier Client

We mentioned in a previous blog that individuals such as corporate officers and employees can be held responsible for back taxes if the company fails to pay payroll taxes.  However, other parties not within the company can be held responsible for back taxes such as lenders and accounting firms.  In this case, the accounting firm hired to manage the client’s payroll was held responsible for $325K of Trust Fund Penalties.  This is an interesting case because it shows that the IRS can go after third parties for trust fund penalties. Continue reading…


Tax Help Question – Receiving 1099-R Late

Question: My taxes are still straightforward and I processed them online again just a couple days ago…all was good, until my previous employer finally just sent me my 1099-R in the mail in regards to the 401k contributions.  Because I already submitted everything, this was not accounted for…is that going to be a problem?  Or is there a way to add this?

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Tax Preparer Due Diligence

Your tax return was selected for audit.  The auditor reviewed your information and disallowed some of your deductions.  As a result, you owe additional taxes including penalties and interest.  How could this happen?  You been using a trusted CPA for years to prepare your tax returns.

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