INDIVIDUAL INCOME TAX
An income tax is imposed by governments on financial income that is generated by all individuals. Businesses, ordinary partnerships, and individuals must file an income tax return every year in order to determine whether they owe taxes or are eligible for a refund.
Income tax is applied to both earned and unearned income. Wages, salaries, and commission are considered earned income while dividends, interest, and rents are considered unearned. So many business owners and individuals reach out to us, hoping to reduce their tax burden. We would love to help you with this process. Let us know your background, what your goals are for yourself and/or your company, and a little bit about your family.
We can do a face to face meeting with you or even interview via video. If its not convenient, you can stay in the comfort of your own home, and the entire tax return process can take place in the cloud.
Corporate income tax is the third largest source of federal revenue, after individual income tax and payroll taxes. The US taxes the profits of corporations at rates ranging from 15 to 35 percent. Most corporate income is taxed at the maximum rate.
Taxable corporate profits are equal to a corporation’s receipts less allowable deductions. This includes the cost of goods sold, wages and other employee compensation expenses, interest, nonfederal taxes, depreciation, and advertising.
The corporate income tax is an entity-level tax that applies to C corporations. Corporate profits can also be subject to a second layer of taxation at the individual shareholder level, both on dividends when distributed and on capital gains from sale of shares. Many US businesses are not subject to this; rather they are taxed as “flow-through” entities. Flow-through entities include sole proprietorships, partnerships, and eligible S corporations. While these businesses do not face an entity-level tax, their owners must include their allocated share of the businesses’ profits in their taxable income under the individual income tax.
Our tax professionals work with your business’s financial records to ensure you’re in compliance and that all tax laws are being followed. Its important to us that your corporation runs efficiently, and that your tax records are maintained in a timely manner each fiscal year.
LLC AND PARTNERSHIP RETURNS
An LLC is a business structure that protects the owner(s) from being liable for business’ debts. Its critical to understand your obligations for declaring income and paying taxes at the federal and state levels, in order to be in compliance with the IRS.
While LLCs offer you a large amount of protection that privilege corporations, a different system is utilized for tax payments. This is because profits and losses pass through the entity itself and onto the owner(s), who then report them on their individual tax returns. In terms of tax purposes, LLCs are thus considered similar to sole proprietorships or partnerships.
LLCs are governed by state laws, not by the IRS. Furthermore, based on your state’s laws, you may have a choice in electing to be designated and taxed as a corporation.
Our tax experts will guide you through this process and ensure you’re in compliance.
As a sole proprietor you must report income or losses on your personal income tax return. The business itself is not taxed separately. You must list your business’s profit or loss information on Schedule C, which we will submit to the IRS with Form 1040.
Keep in mind that you will be taxed on all profits of your business (total income minus expenses).
Sole proprietors may also qualify for the new pass-through tax deduction established by the Tax Cuts and Jobs Act, which is in effect from 2018 through 2025.
You’ll need to keep accurate records for your business that are clearly separate from your personal expenses. Our team will help you stay organized so that when its time for filing, the process is seamless.
FBAR INTERNATIONAL FILING
FinCEN Report 114, Report of Foreign Bank and Financial Accounts (FBAR), is used to report a financial interest in or signature authority over a foreign financial account. The FBAR must be received by the Department of the Treasury on or before June 30th of the year immediately following the calendar year being reported. The June 30 filing date may not be extended!
Who is responsible for filing an FBAR? Any US Citizen with a financial interest in or signature authority over foreign financial accounts, must file an FBAR, if the total value of the foreign financial accounts exceeds $10,000 during the calendar year.
The Report of Foreign Bank and Financial Accounts is filed electronically using the BSA E-Filing System. As your accountants, we will use this system to file it for you and answer any questions you may have. Rest assured that we will keep you in compliance.