I love to play Duplicate Bridge.
The game is totally logical. It requires that you be able to count 4 suits of 13 cards each AND 10 points in each suit and after a few plays you can figure out where the rest of the cards lie.
The same thing cannot be said for the Affordable Care Act (ACA). Despite the fact that we were assured that premiums would go down, they are on the rise. Despite the fact that we were assured that if we liked our policy, we could keep our policy, the truth is that the old policies are going to be squeezed out.
Posted in Howard Lipset, IRS, Personal Finance, taxes
Tagged Affordable Care Act (ACA), Comparative Effectiveness Research Programs, finances, financial education, Flexible Spending Accounts (FSA), Government Mandated Healthcare, health, Howard Lipset, Insurance Premiums, IRS, Obamacare, taxes
Americans have come to believe that their expectations of privacy are a constitutional right.
Unfortunately, the Internal Revenue Service does not believe that.
And in some cases, the IRS is correct. When you post something on Facebook, Twitter or the like, you are allowing anyone who wants to look to see that posting. In these instances, you do not have an expectation of privacy because you have, de facto, waived it.
This is reprinted from the IRS’ own website
Don’t Fall for Phony IRS Websites
The Internal Revenue Service is issuing a warning about a new tax scam that uses a website that mimics the IRS e-Services online registration page.
The actual IRS e-Services page offers web-based products for tax preparers and payers, not the general public. The phony web page looks almost identical to the real one.
Want to emulate the success of others? If wealth is what you’re after, look to an unconventional source for tips: the IRS.
John D. Rockefeller, America’s first billionaire, said, “If your only goal is to become rich, you’ll never achieve it.”
Easy for him to say, but his point is: If the only thing you care about is making money, no matter how much money you make, it will never be enough.
These are tough economic times for everybody. But when you owe the Internal Revenue Service money, this is especially so. I thought I would share some advice with you.
I have a client who has been on a pay-out with the IRS for a number of years. The effect of the pay-out is that he has paid his tax for the year involved, but now owes the penalty and interest for that year.
Nine months ago, he lost his job and he has court ordered payments which leaves him nothing to pay the IRS with. I wrote to the IRS explaining the situation and asking for the penalties and interest to be expunged.
They ignored my letter and instead, sent a notice of lien, which implied that he violated their agreement. They ignored subsequent letters that I wrote as well. I had to take this further and did.
If you find yourself in this situation, as my client did, where the IRS is not listening to you, be advised there is a Taxpayers Advocates Office within the IRS. I got resolution through this process.
They have a Form 911 which allows the Advocates Office to step in and try and remedy the situation.
It’s been several weeks since I contacted this Office. Today, I was informed that not only did I get the current penalties and interest forgiven, but I also received a refund for my client for prior penalties and interest that were previously paid as well.
Do Right or Due Rights? Doesn’t matter, the problem was handled.
Our government and its affiliated agencies can be big, bureaucratic, and scary to any individual or small business. But, when you look hard and have the right advice, these too can be navigated so that you can be heard and your problems handled.
Posted in IRS, Job change, Personal Finance, Small business, taxes
Tagged back taxes, fired, IRS, job, lien, pay-out, taxes, taxpayers advocates
I get asked frequently about Limited Liability Companies (LLC) vs Sub Chapter S Corporations, particularly when it comes to small business and start ups. Here are my thoughts on these.
The LLC for a start-up is fine, but they are not my preference. I actually prefer the S Corporations. They both have limited liability. They both can take investment capital, though the S Corporation restricts the type of investor and the number of investors. And they both allow “income to flow through” to the investors.
But S Corporations will not drain cash as quickly as an LLC. Investors in an LLC will be required to pay self employment taxes on the profits. If there are five investors, and three are not working in the business (true investors) and all split $500,000 profit equally in an LLC, the non-working investors will pay self employment taxes of about $12,000 each if they have no other earned income. In an S Corporation, they will pay nothing.
Other things to consider are costs. For example, the annual fee for the LLC starts at $500. For the S Corporation, it starts at $25. (In New York State; in New Jersey, the reverse is true) Further, lawyers seem to charge twice as much to form an LLC as they do a Corporation.
One final consideration: a one person LLC is filed as a Schedule C on Form 1040. A $100,000 profit would make the tax return look like a large taxpayer and possibly subject it to an Internal Revenue Audit. A one person Subchapter S corporation files Form 1120S and looks like a small business. It would be less likely to be audited based upon the identical numbers.
So in my opinion, the S Corporation for the start up makes more sense. Why pay more, or risk more, to get the same thing?
Posted in IRS, taxes
Tagged IRS, LLC, S Corp, taxes