Noel Dalmacio

Self-employed workers need to account for FICA taxes. Remember to account for your Social Security and Medicare taxes, as well as your income taxes. Creating and funding a savings account for this purpose can help avoid a possible cash flow hit each quarter when you pay your estimated taxes.

The IRS says you should retain documentation for as long as they are needed to support your tax return. Normally tax records should be kept for three years from the later of the tax filing due date, the date you filed your taxes, or the date you paid your tax in full. But be careful, others may want it for a longer period of time.

An operating agreement is an agreement, usually a written document, that sets out the rules by which a limited liability company (LLC) is to be operated. It is the LLC equivalent of corporate bylaws or a partnership agreement.

The IRS does an effective job in comparing W-2s and 1099s they receive from organizations to the amounts you claim on your tax return. If they do not match, rest assured you will receive a notice in the mail asking for clarification.

A capital gain is the amount you get from selling property, like stock, a house, or a mutual fund. For example, if you buy stock for $1,000 and sell it for $1,250, you have capital gain of $250. You don't need to include a capital gain if it's from the sale of your main home you owned for at least 5 years (and the profit is less than $250,000). Report any capital gains noted in Form 1099-DIV, which you should get from some companies, like mutual funds, before the tax filing deadline.

Making a change on your federal tax return may require you to file an amended state or local tax return. Do not assume that an amendment in your favor on the federal level will necessarily be in your favor on the state/local level.

Remember there is also a time limit to request a change in your tax return and receive an additional refund. This is typically set to three years after the initial filing deadline of the tax return. Make sure you file these tax returns using certified mail. Should the IRS delay responding to your amended return, you may need to prove it was filed timely.

Required minimum distributions. If you are age 72 or older, you must once again plan to take the minimum required distribution from your retirement account in 2021. The one-year waiver of this required distribution is now over.

Errors discovered that lead to an additional tax obligation are legally required to be fixed by filing an amended tax return. This is especially true if the discovered error is from missing information found on a 1099 form or W-2 reported income. Why? This information is being reported to the IRS and matching programs will typically catch the error. The sooner you amend your return and pay the tax the lower the possible interest and penalties.

A partnership is the relationship between two or more people to do trade or business. Each person contributes money, property, labor or skill, and shares in the profits and losses of the business.

Having a business plan is necessary for survival in today's competitive business environment. A written business plan is as essential for a small business as it is for large corporations. A good business plan will help you focus on current and potential problems and assist you, your advisors, and employees in improving net profit.

S corporations are corporations that elect to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes. Shareholders of S corporations report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates. This allows S corporations to avoid double taxation on the corporate income. S corporations are responsible for tax on certain built-in gains and passive income at the entity level.

Small business owners have a number of options on how to organize their business for tax purposes. Many small, single owner, businesses are not incorporated, and are deemed "sole proprietors", in the eyes of the IRS. Other business entities, like C-Corporations, are taxed as a separate entity with distributions to owners taxed a second time as dividends. Still others are deemed "flow-through" entities like S-Corporations and Limited Liability Companies (LLC).

Never mistake motion for action. Ernest Hemingway

Looking to sell your house? You can generally exclude $250,000 of any gain on the sale of your main home ($500,000 if married filing jointly). To qualify the property must be your main home and you must have lived in it for two of the past five years prior to the sale of your property.

Getting Married This Summer? You and your intended might enjoy the same movies and the same kinds of food, but are you financially compatible? Take some time to discuss your finances before you tie the knot. Talk about your assets, your debts, your credit ratings, and your financial attitudes, including your spending and saving habits. Do you share the same goals, such as having children, buying a home, or continuing your education? How will you finance your dreams?

An Operating Agreement is an agreement, usually a written document, that sets out the rules by which a LIMITED LIABILITY COMPANY (LLC) is to be operated. It is the LLC equivalent of corporate BYLAWS or a PARTNERSHIP agreement.

Any responses to the IRS should be sent via certified mail or other means that clearly show you replied to their inquiry before the IRS's deadline This will provide proof of your timely correspondence. Lost mail can lead to delays, penalties, and additional interest tacked on to your tax bill.

If you own a business, you probably own some form of general liability insurance to protect you in the event of a lawsuit due to negligence on your part. However, there may be situations where the limits of your general policy may not provide adequate protection. A commercial umbrella can provide you and your business with additional liability protection.

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Just don't give up trying to do what you really want to do. Where there is love and inspiration, I don't think you can go wrong. -Ella Fitzgerald

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