Tax/Accounting

Q. I am looking to pledge my truck into my existing LLC. What should I do next? We do not know the details of your LLC and its tax status or your business use of the truck, but our response assumes that your LLC is a single member LLC taxed as a sole proprietorship and that…

Question: Can a three member LLC, being taxed as a partnership, place the three members on a payroll service with other employees of the company? The members of an LLC taxed as a partnership cannot take W-2 salaries or wages like employees of the LLC and cannot therefore have their compensation processed through a payroll…

Q. Once I start making money in my business, what should I do with the profits? How much do I put back into the business versus putting it into savings? Cash Flow Management Considerations The potential uses of business profits and cash flow are owner compensation, overhead expenses, accounts receivable collection cycle, product inventory purchases,…

Updated 4/4/17 Question: “It’s graduation season and I’m looking at making some substantial gifts. Do I need to be worried about how this will impact my taxes?” Bona fide gifts are not includible in the gross income of the recipient, or donee, of the gift regardless of the amount of the gift. However, there is…

Q. Can an LLC pay one of its members a salary? Is that what guaranteed payments are? Single and multi-member or owner LLCs taxed as corporations (C or S types) are generally required to pay their members who hold executive officer positions and manage the day-to-day business of the LLC, or otherwise work in their…

Q. In the past I took the standard mileage rate for my business auto, but now I want to switch to actual expenses. Since I am switching and took standard mileage rate for 2 years prior, should I adjust the cost basis for the auto for depreciation? A fixed amount per mile is built into…

Question: “Some of my clients have not paid me. Can I deduct my business bad debts?” Bad debt deductions depend upon the accounting method you use (cash or accrual) and other factors; however, a business can generally only deduct a business bad debt for unpaid invoices to the extent that the amounts invoiced were previously…

Question: I’m selling a rental property. What kind of tax issues should I be preparing to deal with? The taxable, or recognized, gain on the sale of a property will be the difference between the amount you realize on the sale and the adjusted basis in the property. The amount you realize on the sale…