Category Archives: Business Tax

Retirement Plan Form 5500-EZ Return and Filing Form 5500-EZ

What is Form 5500-EZ? The Form 5500 Series is a disclosure document for plan participants and beneficiaries. The Form 5500 Series is part of ERISA’s overall reporting and disclosure framework, which is intended to assure that employee benefit plans are operated and managed in accordance with certain prescribed standards and that participants and beneficiaries, as… Read More »

S Corporation Shareholder Stock Basis

What is an S Corp? An S corporation is a corporation with an election in effect. The impact of the election is that income, loss, and deductions, pass through to the shareholder. The two main reasons for electing S corporation status are to, one, avoid double taxation on distribution. Now this is accomplished by the… Read More »

Form 1099-MISC Miscellaneous Filing Requirement

Let’s spend a little time talking about Form 1099-MISC miscellaneous filing requirements, backup withholding and the recent increases to information return penalties. Even though businesses use the form 1099-MISC to report their payments to nonemployees to the IRS, the issue is so closely related to employment tax, that it bears discussion today. The Internal Revenue… Read More »

Officer Compensation for IRS Purposes and Taxable Income

is an important topic to cover because many business owners do not realize that corporate officers are employees by statute. For example, corporate officers are employees for FICA purposes under Internal Revenue Code Section 3121(d)(1). Corporate officers are employees for federal income tax withholding purposes under Internal Revenue Code Section 3401(c). Corporate officers are employees… Read More »

Taxation of Employer Fringe Benefits and IRS Treatment

A fringe benefit is a form of payment for the performance of services. Employers provide fringe benefits to workers of all types, including employees, independent contractors, partners, and directors. Any fringe benefit a business provides to a worker in connection with the performance of services is taxable and must be included in the worker’s income… Read More »

Businesses that improperly classify workers as independent contractors instead of employees

What can happen if a business misclassifies some of its workers? Businesses that improperly classify workers as independent contractors instead of employees can incur substantial amounts in additional taxes and penalties as a result of that misclassification. The Trust Fund recovery penalty may apply if federal income tax, social security tax, and Medicare tax that… Read More »

Deduct repairs and maintenance expenses tangible property regulations

Under the Final Tangible Property Regulations, generally a taxpayer can deduct repairs and maintenance expenses to tangible property when the amounts are not for an improvement. The Final Regulations, under 263a do not eliminate the requirements of Section 263A, which generally provides that a taxpayer must capitalize the direct and allocable indirect costs of producing… Read More »