Tax Returns, Bookkeeping, and
Payroll Services
Let's Get Connected
Fill out our short questionnaire to see
if we are a good fit!
Blog
Educational Resources
Investing in your grandchild's future can be one of the most rewarding ways to secure their financial well-being. Whether you're contributing to a 529 College Savings Plan or setting up a UGMA/UTMA account, understanding the tax implications is key to maximizing your investment. Learn about gift tax exclusions, how to avoid the Kiddie Tax, and tips for using tax-advantaged accounts. This guide will help you make smart decisions for long-term growth while minimizing tax burdens.
Discover how to invest wisely in your grandchildren's future! Read our complete guide now.
Want to save money in taxes WITHOUT working harder? One way is to shift income from a higher bracket taxpayer to a lower one or even a zero rate-bracket. Let me give you an example of how this can work.
One of the first big decisions you'll face when starting your business is choosing the right entity type. Each option has its own pros and cons, and the right choice depends on your goals, the size of your business, and how you plan to grow. Let’s break down the most common business structures to help you make an informed decision! Sole Proprietorship Pros: Simple setup, low cost, full control. Cons: Unlimited personal liability, harder to raise capital. Best for: Solo entrepreneurs testing the waters or freelancers who are just getting started. A sole proprietorship is the easiest and most straightforward entity to form. However, it offers no protection from personal liability, meaning that your personal assets could be at risk if something goes wrong. LLC (Limited Liability Company) Pros: Liability protection, flexible management, pass-through taxation. Cons: More paperwork than a sole proprietorship, state fees. Best for: Small businesses seeking liability protection without the complexity of a corporation. An LLC provides a shield for your personal assets, while still offering the benefits of pass-through taxation, making it a popular choice for many small business owners. It’s a step up from a sole proprietorship in terms of protection and formalities, but not as complicated as incorporating. If you have more than one business partner, a Multi-Member LLC might be a good fit. This structure offers the same liability protection and tax benefits, but allows for more than one owner, making it a flexible option for partnerships. S Corporation Pros: Tax benefits (no self-employment taxes on profits), liability protection. Cons: Strict operational requirements, limited to 100 shareholders. Best for: Small to mid-sized businesses that want to save on taxes and have plans to grow. The S Corporation structure allows small businesses to avoid the self-employment tax on profits, which can lead to significant tax savings. However, it comes with more rules and regulations, making it important to keep everything in compliance. C Corporation Pros: Unlimited growth potential, separate legal entity, ability to issue stock. Cons: Double taxation (on profits and dividends), complex regulations. Best for: Larger businesses or startups planning to go public or raise significant capital. A C Corporation offers the most potential for growth, with no restrictions on the number of shareholders or the ability to raise capital by issuing stock. However, it also comes with more complexity and the downside of double taxation, meaning profits are taxed at both the corporate and individual levels. Final Thoughts Choosing the right entity type is critical to your business’s future success. Consider your business goals, size, and potential for growth when making this decision. And remember, what works today might change as your business evolves—so it’s always a good idea to revisit your options as you scale. If you’re unsure which path is right for you, we’re here to help you navigate the process. Reach out for guidance and let’s ensure your business entity is the best one for you!
Usually some part of the statement is true; however, there is always more to the story or it may not apply to that person’s specific situation. Who has heard the statement, “You can’t deduct a loss from business if it is more than 3 out of 5 years.”? Well, this is not the entire truth. A person that conducts an activity for profit is allowed to deduct the expenses that are ordinary and necessary in that industry. If the expenses exceed the income, the amount can offset other income such as wages, interest or dividends. However, if your activity is a hobby, you cannot reduce your other income by the losses. When your losses exceed the 3 year rule, the burden of proof now shifts to the taxpayer to prove the activity is a for-profit business. Here are some factors to consider: The manner that you carry on the activity The expertise of the taxpayer in this industry The time and effort spent in the activity The taxpayers history and success in this industry The elements of personal pleasure or recreation Here are some ways to ensure your for-profit business is not considered as a hobby : Keep thorough and business like books 2. Use a separate business bank and credit card account(s) Log any personal use on assets, such as a camera Research trends in similar businesses Obtain insurance, registrations, certifications, licenses needed for that type of industry Maintain a second phone listing for business Document evaluations of your operation to attempt to improve the business’s profitability Develop a written business plan and update it annually Keep a detailed calendar of your business activities I had a client that had a business of being a personal chef. This was not his primary way of earning income. He had a W-2 job with a local city. He did earn about $200-300 in income; however, his expenses were much more than that. Come to find out, he was hosting dinner parties at his home and wanting to write off the food, subscription to cooking magazines and seeds for his home garden. If you are in doubt, just imagine yourself in front of an auditor explaining your specific situation. If it “feels” like the story above, it may not fly with the auditor, but that does not mean it is not a true business. What you need to do is plan and strategize. What can you do today to prove that you are a for-profit business? Know the rules and then step out in confidence. And, don’t get tax advice from a friend because it might not be the whole truth! Consult your tax preparer to confirm your specific situation qualifies!
Probably one of the most frequently asked questions I receive revolves around auto use for business: What can I deduct?; Lease or buy?; What miles count?, etc. Here are some general rules you need to know to make sure you get every deduction allowed on your auto use!
A few months ago I took my son for a checkup at the doctor's office. Even though I had written confirmation of our appointment time, the office was crowded with several other patients who also had appointments at the same time. The office staff admitted they made a scheduling mistake, told us we would not be seen that day and still insisted we pay our deductible up front. Then they sent us home, without so much as an apology. When I got home, I told my husband that the doctor’s office was terrible to deal with and I wanted to search for a new doctor. This frustrating experience made me think that in this age of social media and online reviews, all business industries really need to look at how their customers experience their services . It's a hard thing to do; even industries that are known for providing good customer service, such as retail and hospitality, don't always get it right. How do your customers feel when they use your products or services? During a recent family trip, I stayed in two different hotels where the customer experience was dramatically different. The first hotel provided a continental breakfast each morning, which included cold cereal, muffins, hard-boiled eggs, waffles and coffee. The first morning, I went down to the dining room to have breakfast to find a half gallon jug of milk in the refrigerator with only about an inch of milk left. No staff was present to replenish the food. The eggs were peeled and under a plastic dome, and the waffle batter was in small cups to pour onto the grill. Since there was no one around, the food just did not seem appetizing to eat; therefore, we went to the local diner to have breakfast. The next couple days, I faced the exact same issue with this hotel's unappealing continental breakfast! Where was the hotel's concern for their customers' experience here? The next hotel too had a continental breakfast, but what a difference! There were 15 people in the room eating and two staff members constantly cleaning tables and restocking the food. There was PLENTY of milk for my cereal! After breakfast, we walked across the parking lot to our room, and I noticed three buckets labeled “clean towels," "dirty towels" and "water.” The hotel had put them out so that the travelers could wash their windshields with clean towels instead of paper towels. This small gesture sure sunk in with me. So I searched my mind…Am I providing good customer service? How hard do my clients have to work to get the value out of the money they spend with me? Where in my business do I only provide a half gallon of milk to my clients and have them think, “Really, that’s all I get?” How can I make sure they experience the extras of having clean towels available to wash their windshield after many miles of traveling? Providing good customer service has to be intentional. Think about how your customers or clients feel when they work with you. Yes, you have to master the basics in your trade, but you also need to think about some extras that you can do that don’t cost a ton, but really speak volumes in caring about your customer’s needs . My staff and I constantly look for ways to enhance our client's experience. We also focus on the finishing touches that show we care . We send hand-written notes, birthday cards and thank you gifts to our clients. We return their phone calls and confirm their faxes within 24 hours of receipt. We also try to make our processes be as simple as possible for them. What customer service improvements can you implement this week?
Recent Blog Articles
Investing in your grandchild's future can be one of the most rewarding ways to secure their financial well-being. Whether you're contributing to a 529 College Savings Plan or setting up a UGMA/UTMA account, understanding the tax implications is key to maximizing your investment. Learn about gift tax exclusions, how to avoid the Kiddie Tax, and tips for using tax-advantaged accounts. This guide will help you make smart decisions for long-term growth while minimizing tax burdens.
Discover how to invest wisely in your grandchildren's future! Read our complete guide now.
Want to save money in taxes WITHOUT working harder? One way is to shift income from a higher bracket taxpayer to a lower one or even a zero rate-bracket. Let me give you an example of how this can work.
One of the first big decisions you'll face when starting your business is choosing the right entity type. Each option has its own pros and cons, and the right choice depends on your goals, the size of your business, and how you plan to grow. Let’s break down the most common business structures to help you make an informed decision! Sole Proprietorship Pros: Simple setup, low cost, full control. Cons: Unlimited personal liability, harder to raise capital. Best for: Solo entrepreneurs testing the waters or freelancers who are just getting started. A sole proprietorship is the easiest and most straightforward entity to form. However, it offers no protection from personal liability, meaning that your personal assets could be at risk if something goes wrong. LLC (Limited Liability Company) Pros: Liability protection, flexible management, pass-through taxation. Cons: More paperwork than a sole proprietorship, state fees. Best for: Small businesses seeking liability protection without the complexity of a corporation. An LLC provides a shield for your personal assets, while still offering the benefits of pass-through taxation, making it a popular choice for many small business owners. It’s a step up from a sole proprietorship in terms of protection and formalities, but not as complicated as incorporating. If you have more than one business partner, a Multi-Member LLC might be a good fit. This structure offers the same liability protection and tax benefits, but allows for more than one owner, making it a flexible option for partnerships. S Corporation Pros: Tax benefits (no self-employment taxes on profits), liability protection. Cons: Strict operational requirements, limited to 100 shareholders. Best for: Small to mid-sized businesses that want to save on taxes and have plans to grow. The S Corporation structure allows small businesses to avoid the self-employment tax on profits, which can lead to significant tax savings. However, it comes with more rules and regulations, making it important to keep everything in compliance. C Corporation Pros: Unlimited growth potential, separate legal entity, ability to issue stock. Cons: Double taxation (on profits and dividends), complex regulations. Best for: Larger businesses or startups planning to go public or raise significant capital. A C Corporation offers the most potential for growth, with no restrictions on the number of shareholders or the ability to raise capital by issuing stock. However, it also comes with more complexity and the downside of double taxation, meaning profits are taxed at both the corporate and individual levels. Final Thoughts Choosing the right entity type is critical to your business’s future success. Consider your business goals, size, and potential for growth when making this decision. And remember, what works today might change as your business evolves—so it’s always a good idea to revisit your options as you scale. If you’re unsure which path is right for you, we’re here to help you navigate the process. Reach out for guidance and let’s ensure your business entity is the best one for you!
Navigating an IRS audit can be a daunting prospect, but understanding the reality behind common myths can help demystify the process and reduce anxiety. Here are some prevalent myths and the truth behind them: Myth 1: Only Wealthy Individuals Get Audited Reality: While higher-income individuals and businesses are often scrutinized more closely, audits can happen to anyone. The IRS uses random selections and computer screenings, meaning taxpayers from all income levels are subject to audits. Myth 2: Filing Electronically Will Prevent an Audit Reality: Electronic filing can reduce errors and potentially lower audit risks, but it does not eliminate the possibility. The IRS uses sophisticated algorithms to flag discrepancies regardless of the filing method. Myth 3: Audits Are Always Lengthy and Complicated Reality: Many audits are resolved through correspondence and don’t require face-to-face meetings. However, complex cases can take longer to resolve, especially if significant issues are found. Myth 4: You Can Handle an Audit Without Professional Help Reality: While it’s possible to handle simple audits yourself, having professional representation can be crucial for complex cases. AdminBooks provides up to 10 hours of audit support, handling correspondence and document preparation to help achieve a satisfactory resolution. Myth 5: The IRS is Out to Get You Reality: The IRS's goal is to ensure compliance with tax laws, not to penalize taxpayers unduly. Working with professionals like AdminBooks can help clarify and resolve issues efficiently. Myth 6: Amending a Return Will Trigger an Audit Reality: Amending a return to correct errors does not automatically trigger an audit. In fact, it can sometimes prevent one by addressing discrepancies before the IRS notices them. Myth 7: All Audits End in Owing More Money Reality: Not all audits result in additional taxes owed. Sometimes, audits can even uncover errors that favor the taxpayer, potentially resulting in a refund. How AdminBooks Helps Representation: We represent you before federal and state tax authorities under a power of attorney, ensuring your case is handled by experts. Issue Resolution: Our team works diligently to resolve any issues that arise during an audit or inquiry. Document Preparation: We manage all necessary correspondence and preparation of documents. Audit Support: We offer up to 10 hours of audit support, giving you the peace of mind to focus on your business. Please note, to receive our audit defense services, you must be a current client of AdminBooks at the time of the audit. For more information on how AdminBooks can protect you during audits, contact us at support@adminbooks.com or 408-782-9640. Visit our Audit Defense Services page for details.
CURRENT CLIENT DOCUMENT UPLOAD
NEW CLIENT DOCUMENT UPLOAD
Site created by
Tafgraphics Design Studio, Inc.
Tafgraphics Design Studio, Inc.