E&M Tax Services, Inc

In the most INTIMATE and PERSONALLY PETRIFYING episode of Boss Bitch, we talk to my longtime tax preparer/accountant Erin Wayland of E&M Tax Services, Inc. She ...breaks down new CA tax reforms, how to get the most from your refund and how the fuck auditing actually WORKS. You're going to love it, and you're going to love E&M and you're welcome and please don't throw yourself off a bridge this tax season (link below). See more

I am doing a Tax Reform for entertainers Q&A. For all that are interested See below!

Question: What are the costs of incorporating? Answer: At E&M Tax Services we open most of our corporations with @eminutes. Their charge to form your S-Corporation is $875 (Discount provided if E&M sets up account). Once you are formed, the yearly costs are usually $1,825 $2,500 for tax prep, year-end payroll fees, CA corporation tax and yearly lawyer fees. All of these fees are deductible, BUT you want to make sure your tax saving is higher than the costs before you run out and open an S-Corp.

Question: Should I buy a new laptop before January 1? Answer: In most cases YES! Even without tax reform, we advise you to make large purchases that you were going to make in the beginning of the year in December. By doing this you get the deduction for the laptop right away. Now, with tax reform, we have a couple items to consider (this is for all large business purchases):... 1. You are a W-2 employee who has expenses and you are not going to convert over to an S-Corp. This person should purchase in December because in 2018 there will be no expenses allowed. 2. You are an S-Corp or Schedule C (person with 1099s) and do not have huge state taxes or property tax. You should expense in December. Your tax rate is going to go down in 2018, you will receive a larger standard deduction and still be able to write off all of your expenses. This person wants to expense as much as possible in 2017 while tax rates are higher to receive a better tax benefit. 3. You are a W-2 employee that has a lot of expenses and you are going to convert to a S-Corp. You may not be entitled to the deduction this year because of AMT or you are limited to 2% of your income. Hold off on purchasing in December and expense in your new S-Corporation. You will get the full deduction.

Question: Hearing a lot about S-corporations being taxed at a lower rate, but I'm also hearing that a number of professions will not receive the lowered rate. Will the change in corporate taxes impact screenwriters with an S-corp? Thanks! Answer: S-Corporations are taxed at your individual tax rate. We take your income, minus your expenses from your S-Corporation, then your income is taxed at your individual tax rate on your personal tax return. So, there will not be a lower ...rate, BUT there is a 'Qualified Business Income Deduction'. This is an additional 20% deduction on your net earnings. You are correct that the deduction is NOT for certain specified service trades or businesses. These include businesses such as the screenwriters since you are considered part of a performing arts. However there are exceptions. One exception is for taxpayers that earn less than $157,500 (Single) and $315,000 (Married). Since S-Corporations are taxed at your individual tax rate you have to combine all of your income with your spouses' income, including other activities. If you are below these thresholds you will be entitled to the additional 20% deduction. If you are above these thresholds, then you will be taxed the same way as in previous years (at the new individual tax rates). On a side note, there is also a new C-Corporation tax rate of 21%, but this will not be for S-Corporations.

Answer: Hi Debbie! For people that have 1099's or receive business income other than W-2's you will still be able to deduct your expenses just like previous years. However, there are some new incentives in the tax bill that will make incorporating more advantageous by offering additional deductions we have not had in the past. These incentives are aimed at taxpayers that make under $157,500 if you are single and $315,000 for married fillers. So even though you will still be able to deduct your expenses on your schedule C like before it is worth looking into an S-Corporation and seeing if the tax savings will out weigh the costs of running a corporation.

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