Your taxpayer filing status: You may be eligible to use more than one
- ByPolk & Associates
- Jan, 07, 2021
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For tax purposes, Dec. 31 is more than just New Year’s Eve. It will affect the filing status box that will be checked on your tax return. When filing a return, you do so with one of 5 tax filing statuses. The box checked on your return generally depends in part on whether you’re unmarried or married on Dec. 31. Here are the statuses: Single, married filing jointly, married filing separately, head of household and qualifying widow(er) with a dependent child. Head of household status can be more favorable than filing as a single person, but special rules apply. You must generally be unmarried, have a qualifying child (or dependent) and meet certain rules involving “maintaining a household.”
The right entity choice: Should you convert from a C to an S corporation?
- ByPolk & Associates
- Jan, 07, 2021
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The best choice of entity can affect your business in several ways, including the amount of your tax bill. Although S corporations can provide substantial tax advantages over C corporations in some cases, there are potential tax problems to assess before deciding to convert from C to S status. One issue to consider is last-in, first-out (LIFO) inventory. A C corporation that uses LIFO inventory must pay tax on the benefits it derived by using LIFO if it converts to an S corporation. Other issues to consider are the built-in gains tax, passive income tax and unused net operating losses. Contact us if you’re interested in an entity change. We’ll explain your options and the tax implications.
Prevent and detect insider cyberattacks
- ByPolk & Associates
- Jan, 07, 2021
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Dishonest workers can initiate a cyberattack by stealing valuable information from your company’s computer network and using it for personal gain. They could be working for a competitor, seeking revenge for perceived wrongs or they may need money to pay gambling debts. You can prevent insider cybercrime by monitoring IT use, removing network access as soon as an employee is terminated and always treating workers fairly. And don’t neglect to protect physical assets such as paper records and computer hardware. Restricting your office’s Wi-Fi to those with special passwords is also a good idea. Contact us with questions.
The President’s action to defer payroll taxes: What does it mean for your business?
- ByPolk & Associates
- Jan, 07, 2021
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President Trump has signed a Presidential Memorandum to defer the employee portion of Social Security taxes for some people. The action only defers the taxes, which means they must be paid in the future. However, the action directs the U.S. Treasury Secretary to explore ways to eliminate the obligation to pay the taxes deferred. Employers have questions and concerns. For example, will employers have to withhold more taxes from employees’ paychecks in the future to pay the taxes back? Without a law to forgive the taxes, will employers be liable to pay them? What if employers can’t change their software by the Sept. 1 start of the deferral? Is the deferral required? Contact us with questions.