Posts by MitchReitman
What is a Reasonable Compensation for Owners of S Corp?
If you have read many of my columns over the years, you probably know that a “S Corporation” is the preferred entity for most alarm companies with a single, or few, individual shareholders. As you may already know, An S corporation is a type of corporation that passes its taxable income, credits, deductions, and losses directly to its shareholders. This means that the corporation itself is not taxed on its income, but instead, the shareholders are taxed on their share of the corporation’s income. The S corporation election is available only to small businesses with 100 or fewer shareholders, and is an alternative to the limited liability company (LLC)
Read MoreIRS Suspends Processing of Employee Retention Credits
Like many business owners, you have been getting cards, letters, emails, phone calls, etc., about the Employee Retention Credit (ERC). I personally have received notices portending to be from the IRS, the Small Business Administration, even from my bank, letting me know that I “may qualify for a “grant of up to $26,000 per employee.” They…
Read MoreClarifying Employee Credits: How to Receive Payroll Tax Refunds
One of the many COVID-19 relief measures hastily issued by Congress was the Employee Retention Credit (ERC). The ERC offers refunds against 2020 and 2021 payroll taxes of as much as $31,000 per employee, so the numbers can add up.
Read MoreInfrastructure Bill Would End the Employee Retention Credit
The infrastructure bill passed by the U.S. Senate on August 10, 2021 would end the employee retention credit (ERC) early, making wages paid after Sept. 30, 2021, ineligible for the credit (except for wages paid by an eligible recovery startup business).
Read MoreIRS Notices, Liens, and Levies
The IRS collection division is recovering from pre-pandemic lockdowns and began sending out letters from the Automated Collection System function in June. They also restarted the income tax levy program in July. In addition, responsible officers continue to work on non-filer cases and are sending out notices and billing notices; however, their focus is primarily on egregious cases, such as high-income non-filers.
Read MoreInfrastructure Bill Would End the Employee Retention Credit
The infrastructure bill passed by the U.S. Senate on August 10, 2021 would end the employee retention credit (ERC) early, making wages paid after Sept. 30, 2021, ineligible for the credit (except for wages paid by an eligible recovery startup business).
Read MoreTaxes to Follow COVID
After a year of coping with COVID lockdowns and reduced revenues the potential increase in business and individual tax rates may be our next challenge. President Biden has suggested raising federal rates on businesses and the wealthy to pay for his forthcoming infrastructure bill and programs to combat inequality and climate change. Under his proposed…
Read MorePayroll Tax Pitfalls
Payroll taxes and withholding present a tempting source of working capital for a small business. Payroll tax payments are easy to divert because there isn’t really an invoice (at first). Payroll taxes and withholding are ‘voluntarily’ reported on IRS Form 941 (Employer’s Quarterly Federal Tax Return) and paid via direct deposit to the IRS. The…
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