You filed Limited Liability Corporation (LLC) paperwork to the state for your business. It was easy to do and now you have a business. Now what? The tax obligations for your new business LLC will depend on a few factors.
For-Profit Business or Hobby, Facts and Circumstances
Generally, a business is considered “For Profit” if the business generates a profit in at least three out of five consecutive years. For training, showing, breeding, or racing horses, then the business needs to generate a profit for two out of seven years. What if the business does not meet this test?
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Tax Consequences for Determining if a Business is For-Profit or Hobby
It’s important to understand the hobby loss rules when starting a side business. For the first couple of years, it is common for a start up business to lose money. If the side business loses money for several years, the business may be a hobby. The tax consequences of reporting a business as “for profit” versus a hobby can be significant.
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Quote of the month – October 2012
A day lived without doing something good for others is a day not worth living. Mother Teresa
Trust Fund Penalty – Rules for DBA and Single Member LLC
Generally, the IRS has to assess trust fund penalties to make individuals in a corporation personally liable for unpaid payroll taxes. The word “corporation” has meaning in tax law. If the business is not considered a corporation, then the owner is automatically personally liable for unpaid payroll taxes. Read this blog for more information on the trust fund recovery rules for DBAs and Single Member LLCs. Continue reading…
Trust Fund Penalty – How long to assess?
The IRS has limited time to assess trust fund recovery penalties. Generally, the IRS has three years from the filing date of the employment tax returns to assess the trust fund recovery penalty. This seems simple but it does require further explanation.
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Another Nationwide Firm in Trouble?
Nationwide tax resolution firm Omni Financial under investigation by the Florida Attorney General. Will this be the next nationwide firm to go down?
Trust Fund Penalty – Who is the responsible person?
The IRS will hold individuals in a company personally liable for trust fund recovery penalties. The IRS will conduct an investigation to make this determination. This blog discusses the factors the IRS evaluates during the investigation to determine the individuals considered a “responsible person” for trust fund penalties.
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Quote of the month – September 2012
A leader destined for success asks, “What can we do to improve?”
A leader destined for failure says, “That’s the way it’s always been done.”
Which are you? Anonymous
Professional Theme
Professional Theme
Built on the Gantry Framework, Clarion has a range of powerful, flexible and intuitive features and functions.
The administrative interface offers a user friendly control panel for intricately customizing the themes layouts.