WHAT ARE BUSINESS ENTITIES?
Business entities are organizations formed to conduct business or engage in a trade. There are multiple business entity types, including corporations (C-Corporations and
S-Corporations), limited liability companies (LLCs), partnerships (general partnerships, limited liability limited partnerships, and limited partnerships), and sole proprietorships.
ARE MEDICAL BILLS TAX DEDUCTIBLE?
Medical bills are tax-deductible if the taxpayer itemizes and does not elect to take the standard the deduction. In 2019, the IRS allowed all taxpayers to deduct the total qualified unreimbursed medical care expenses for the year that exceeds 7.5% of their adjusted gross income. Beginning in 2020, the threshold amount increases to 10% of Adjusted Gross Income (AGI).
CAN YOU PAY YOURSELF A SALARY WHEN YOU OWN A CORPORATION?
Officers of corporations are employees and should be paid wages or salaries and receive a form W2 at the end of the year.
Salaries must be reasonable and paid regularly as other employees.
DO ACCOUNTANTS HANDLE PAYROLL?
Accountants assist clients in the process of setting up the payroll with the respective states. Once completed, there are specific quarterly and yearly forms that need to be filed in order to stay compliant. The accountant will assist the client with any changes and timely file all required forms.
DO I HAVE TO FILE END OF YEAR TAXES IF MY BUSINESS MADE $0 THIS YEAR?
Corporations must file a tax return each year, regardless of whether their taxable income is zero, $1 million or suffered a loss. A corporation may face penalties for not filing, even if it did not have a single transaction to report.
A regular corporation, referred to as a C corporation, would file Form 1120.
An entity that is taxed as an S-Corporation files its Federal return on Form 1120S.
A single-member LLC or a sole proprietor files a Schedule C together with form 1040. A Partnership will file form 1065