Tax Regulations

The Benefits of Hiring a Professional Tax Advisor

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Navigating the complexities of tax laws can be challenging for business owners and individuals alike. While it may be tempting to handle tax matters independently, hiring a professional tax advisor can offer significant advantages. Here’s a closer look at the benefits of working with tax professionals and when it’s essential to seek their expertise.

Advantages of Hiring a Professional Tax Advisor

  • Expert Knowledge and Experience: Tax professionals possess specialized knowledge of current tax laws, regulations, and compliance requirements. They stay up-to-date with changes in legislation and can help you navigate complex tax issues effectively, ensuring you’re informed about the latest deductions and credits available.
  • Maximizing Deductions and Credits: A tax advisor can identify potential deductions and credits that you may not be aware of, helping you reduce your tax liability. Their expertise ensures that you take full advantage of available opportunities, potentially saving you significant amounts of money.
  • Personalized Tax Strategies: Every business and individual has unique financial situations. A tax advisor can create tailored tax strategies that align with your specific goals and circumstances. This personalized approach can enhance your overall financial planning and long-term success.
  • Avoiding Mistakes and Penalties: Tax laws are intricate, and even minor errors in tax filings can lead to costly penalties and audits. Professional tax advisors are meticulous in their work, minimizing the risk of mistakes and ensuring compliance with all tax obligations, thus providing peace of mind.
  • Time Savings: Preparing taxes can be time-consuming, especially for busy business owners. Hiring a tax advisor allows you to focus on running your business while they handle the complexities of tax preparation. This time savings can translate into improved productivity and efficiency.
  • Audit Support: In the event of an audit, having a tax professional on your side can be invaluable. They can represent you, handle communications with tax authorities, and ensure that all necessary documentation is prepared, reducing stress during what can be a challenging process.

When to Seek Professional Help

While it’s beneficial to have a tax advisor for most businesses and individuals, there are specific situations when their expertise is particularly crucial:

  • Starting a New Business: Understanding the tax implications of different business structures and setting up proper accounting practices is vital for new business owners.
  • Significant Changes: Events such as purchasing a new business truck, purchasing a business, adding a new partner to your business can impact your tax situation, making it essential to seek professional advice.
  • Complex Financial Situations: If you have multiple income streams, investments, or assets, a tax advisor can help you manage these complexities effectively.
  • Ownership of Rental Properties or Investments: Tax implications for real estate and investment income can be intricate; professional guidance can optimize your tax strategy.
  • Preparing for an Audit: If you receive notice of an audit from the IRS, consulting a tax advisor immediately is crucial for navigating the process.
  • Major Changes in Tax Law: Following significant tax law changes, seeking advice can ensure that you’re compliant and taking advantage of new opportunities.

Conclusion

Hiring a professional tax advisor offers numerous benefits, from maximizing deductions to providing personalized strategies tailored to your unique situation. While some may choose to handle their own taxes, the expertise and support of a tax professional can lead to substantial financial savings and peace of mind. If you find yourself facing complex tax issues or significant life changes, consider enlisting the help of a qualified tax advisor to ensure your financial success.

Please note that this blog post is for informational purposes only and does not constitute tax, legal or accounting advice and that new changes in rules and regulations may render this content out of date.

You can check our YouTube channel for more subjects that you might find useful.

Beneficial Ownership Reporting Requirements No Longer In Effect

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Beneficial Ownership Reporting Requirements Are Removed!

FinCEN Removes Beneficial Ownership Reporting Requirements for U.S. Companies and U.S. Persons!

In an interim final rule, FinCEN revised the definition of “reporting company” in its implementing regulations to mean only those entities that are formed under the law of a foreign country and that have registered to do business in any U.S. State or Tribal jurisdiction by the filing of a document with a secretary of state or similar office (formerly known as “foreign reporting companies”).

FinCEN also exempted entities previously known as “domestic reporting companies” from BOI reporting requirements.

This is great news for all business owners! Now you don’t need to report your business ownership information plus a lot other information to the government. Instead you can focus on your business.

FINCE Website

FinCEN has listed on their website some questions and answers (Q&As) in anticipation of inquiries relating to the Beneficial Ownership Information Interim Final Rule.

You can see these Q&A about the changes to the beneficial ownership reporting requirements here.

f you are in need of a good CPA firm for your business, contact us!

Please note that this blog post is for informational purposes only and does not constitute tax, legal or accounting advice.

You can check our YouTube channel for more subjects that you might find useful.

Need More Time To File Your Taxes?

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You Don’t Have All Your Tax  Information or You Need More Time?

What happens if you cannot get all your tax information you need to file your taxes or you need more time, but you are getting close to the due date, as we are getting now close to April 15th Tax Day?

The worst thing you can do is to ignore the deadline and do nothing!

This move could prove to be very expensive because the IRS and tax courts rarely excuse delays without extraordinary justification.

Compliance Is Not Negotiable, Even If  You Need More Time To File

It is essential that you file an extension AND make a payment with the extension, if needed.

You need to try to estimate how much you owe and make the payment before April 15th.

You can make the payment on the IRS website. For an individual return, for the reason for payment choose “extension”, for tax form choose “4868” and for tax year choose “2024”.

Extension Still Not Enough

What happens if, after filing an extension, you get to the extended due date, September 15th for your business or October 15th for your personal taxes and you still don’t have all your books and documents in order?

Compliance Is Non-Negotiable

You need to file a return using estimated amounts, if needed and later amend and report the accurate amounts. And this is exactly what a recent tax court decision held. In Weston v. Commissioner issued this February 12, 2025 the court referenced a 1982 decision that read:” A taxpayer generally is required to file timely using the best information available and to later file an amended return if necessary”.

If you are in need of a good CPA firm for your business, regardless if you need more time to file your taxes or not, contact us!

Please note that this blog post is for informational purposes only and does not constitute tax, legal or accounting advice.

Beneficial Ownership Information Report is Back in Effect

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The beneficial ownership information report is back in effect and the new due date for the BOI reports is March 21st, 2025.

What You Need To Do

If you filed your initial beneficial ownership information report already, make sure to report any changes to the information in that initial BOI report by March 21st, if any.

Moving forward report within 30 calendar days any change in the information reported on the previous BOI report.

If you are forming a new entity moving forward, also remember to file its BOI report within 30 calendar days from the company creation or registration.

The Good News

The good news is that FINCEN intends to initiate a process this year to revise the BOI reporting rule to reduce burden for US small businesses.

We strongly advise you read the frequently asked questions on the Financial Crimes Enforcement Network’s website.

We will keep you posted on any news on that.

You can check our YouTube channel for more subjects that you might find useful. Also, if you are in need of a good CPA firm for your business contact us!

Please note that this blog post is for informational purposes only and does not constitute tax, legal or accounting advice.

 

1099-NEC Forms Reminder

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1099-NEC Forms Are Due

The due date for the 1099-NEC forms is around the comer, January 31st, 2025.

To Whom Are 1099-NEC Forms Issued?

As a business owner you need to know that not only contractors get 1099 forms. Business entities, like LLCs or partnerships might need to be issued 1099 forms, depending on their tax classification.

That’s why you should obtain a W9 form from your service providers. Click here to see the form.

What Services Are Reported

Repairs, advertising , marketing, accounting, tax preparation, legal services are such services and even rents paid need to be reported, but not on a 1099-NEC forms. Instead rents are reported on a 1099-MISC.

Keep in mind, legal services get reported regardless of the tax classification of the law firm.

This is not an exhaustive list.

Reportable Payments

The payments that are reported are the ones made through means other than credit cards.

E-filing

If you have 10 or more information returns (not only 1099-NEC forms, information returns include all types of 1099s, W-2s, etc.) you must file the 1099 forms electronically. Otherwise, if you file them on paper when you should not have, the IRS will consider the 1099 forms as not filled at all.

You can use QuickBooks online to E-file the 1099 forms, but you need to set up the contractor or company properly in QuickBooks. Under the vendor information make sure to have the “track payments for 1099” box checked and that you have all their information in, like address, social security number or employer identification number.

You can check our YouTube channel for more subjects that you might find useful. Also, if you are in need of a good CPA firm for your business contact us!

Please note that this blog post is for informational purposes only and does not constitute tax, legal or accounting advice.

BOIR Rules Enforcement Blocked

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Federal Judge Blocks BOIR Rules Enforcement

In a significant legal development, a federal judge has issued a nationwide preliminary injunction blocking the enforcement of the Beneficial Ownership Information Reporting (BOIR) rules under the Corporate Transparency Act (CTA).

As a result, this would have required 32.6 million existing small businesses and 5 million new entities formed each year from 2025 to 2034,  to report their BOI to the FinCEN. This decision handed on December 3, 2024, has temporarily halted the requirement for businesses to report their BOI to the FinCEN.

This ruling has significant implications for businesses across the United States. Many small-business owners were unaware of the new rules. Additionally, the taxpayers who knew, often struggled to understand whether they were required to file and what information was needed. The injunction provides a reprieve, allowing businesses more time to prepare and understand their obligations.

Uncertainty Still Looming

The blocking of the BOI reporting rules marks a pivotal moment in the ongoing debate over financial transparency. This injunction is temporarily and it will be probably fought all the way up to the Supreme Court. That is why we recommend that you still file your BOIR and comply with CTA. Until this law is found unconstitutional,  make sure to stay informed about the latest developments and consult with tax professionals to ensure compliance.

You can check our YouTube channel for more subjects that you might find useful. Also, if you are in need of a good CPA firm for your business contact us!

Please note that this blog post is for informational purposes only and does not constitute tax, legal or accounting advice.