FAQ

Frequently Asked Questions and Answers.

Q: I'm starting my own business, what structure should I use?

A:
There are several different options and not one fits all. It could be a sole proprietorship, with income and expense reported on Schedule C and included with your 1040. It could be a LLC (Limited Liability Company), which if it has only a single member could be reported on Schedule C like a sole proprietorship, or reported on a separate return, whose income then flows to the personal return (1040). It could be a small business corporation (S-Corp), which has its own return, with information flowing through to the personal return (1040). Please call to discuss options and the pros and cons for your particular business.

Q: I'm going to hire someone to work for me. How should I pay them, as an employee with a W-2 or an independent contractor with a 1099? What is the difference?

A:
A contractor works on their own time, and typically taxes are not withheld. An employee works the hours you specify, and taxes are withheld. Contact me and we can discuss which fits your needs best.

Q: Is there a standard amount I can deduct for medical?

A:
You can itemize all deductions, or use the standard deduction. We can compare to see which will give you the greater deduction. If you itemize deductions, you must have receipts, and exact costs.

Q: Can I use a percentage of my income as a deduction for charitable contributions?

A:
Receipts are necessary for charitable contributions. Estimates cannot be used.

 

. : Helpful Tips

 

   - I received a notice from the IRS, now what?

Be sure to read the notice carefully, and check where the changes are.  You may have made a mistake, or the IRS may have made a mistake. Be sure to reply by the due date. You can agree with the changes and make a payment, or you can agree with some changes, or disagree with the changes.

If you agree with some or disagree, you will need to provide information to back up your position. You may need to amend your return to show the tax due changes. Don't just assume you were wrong, be sure to double check.

If someone prepared your return for you, let them know you received a notice, and they can review for you.