On Friday, July 21, the IRS release a Chief Council Memorandum on the subject of whether or not a business qualifies for the employee retention credit (ERC) based on supply chain disruptions. Here is a link to the memorandum: https://www.irs.gov/pub/lanoa/am-2023-005.pdf The short answer is, no, a supply chain disruption does not qualify a business for […]
The decision to be an S-corporation might be a bad thing for the overall tax picture of a small business right now, in light of the qualified business income deduction. Like everything with taxes, “it depends.” I am not a huge fan of S-corps, and quite frankly there’s nothing wrong with being a sole proprietor. […]
Taxpayers who sell their home don’t need to pay taxes on the sale — “in general.” “In general” is famous last words of the tax code. What if you’ve claimed a home-office deduction relating to your house? In that situation, it’s likely that some of your sale IS taxable. Let’s discuss. Review Let’s use an […]
Venmo and other payment apps are becoming a popular way to pay contractors. We talked about the “1099-K exception” in the last post, where if you pay someone via a “third-party processor” you do NOT need to issue a 1099 yourself to that person because the payment processor will send a 1099-K to that person […]
If you are a business and you pay contract labor, you must issue the contractor a Form 1099-NEC if: The amount you paid to the contractor is $600 or more for the year, and The contractor isn’t taxed as a corporation. If you pay with a credit or debit card, or via a third-party processor […]
This blog post is specific to Iowa. SUTA = state unemployment tax. In Iowa, when a 1-person LLC makes an election to be taxed as an S-corporation and pay the owner a salary, the salary is NOT automatically subject to state unemployment tax. Instead, the owner has the option of making themselves subject to unemployment tax. […]
I wanted to revisit the subject of 1-person LLCs and employer identification numbers. Here are the basics, when a 1-person LLC is taxed as a sole proprietorship: The IRS says to put the proprietor’s name and SSN* on the W-9 The IRS says to use the proprietor’s SSN* on the Schedule C The IRS says […]
The August 27th Interim Final Rules seem to allow a sole proprietor to include home-office expenses toward loan forgiveness. This is in direct contradiction to the April 14th IFRs which say home-based expenses DON’T count. Here is what the latest IFR says, regarding home-based businesses: “(T)he borrower may include only the share of covered expenses […]
Last week I wrote about how loan forgiveness for the solo sole proprietor will work. I had to strike through a lot of my thoughts as new information came in. So now, a week later, what do we know? The Typical Solo Sole Prop Will Probably Have Some Loan Remaining PPP loans are forgivable if […]
(NOTE: I have been terrible about writing posts this year; I am finally back at a point of being able to blog again, so you’ll see posts more often from me. And if this post is any indication, I have my flair back that so many people liked, of writing with humor and going on […]