Nova Century Business Consulting LLC

Nevada is no longer a tax-free state ! Nevada has been one of the tax-friendliest states for the longest time, but the "tax-free" party has ended. It will start collecting business taxes in the name of "Nevada Commerce Tax", primarily to fund its education system. So what is this Nevada Commerce Tax? It's a tax levied on all business entities engaged in business in Nevada. This encompasses all forms of legal entities such as sole proprietors, C Corp, S Corp, LLCs, Series LLCs..., trusts...etc. The tax base is your gross income minus certain deductions and exclusions. No deduction is allowed for cost of goods sold or other expenses. The tax rate varies by business category, ranging from 0.051% to 0.331%. Only the businesses whose gross revenue exceeds $4 million will be subject to this new tax. A business entity may pass along the tax to its customers in a similar fashion to a "sales tax". The invoice must clearly show that the commerce tax recovery charge is part of the total price collected from the customer. The initial Nevada Commerce Tax report is due on 8/15/16 (45 days after 6/30/16). This initial report establish the tax rate, based on the business category you selected, for future years. Finally, to add insult to injury, any businesses that keep its books and records outside of Nevada will have to pay for the actual expenses incurred if the state sends its tax auditors to examine your tax compliance. This can no doubt be very very expensive. For so many years, out-of-state entrepreneurs were lured into forming businesses in Nevada and later on regretted doing so when they realized the nexus issues and the unnecessary inconvenience of managing an out-of-state business. Now they found themselves in a new surreal "got-cha" moment. There are so many online companies who can help you quickly set up a company for a cheap price but do you really know what do you get yourself into? Do you want to "zoom" into a big mess?

Just before the Christmas holidays, a set of legislations were signed into law. Let's take a look at some interesting tax provisions that affect individuals and businesses. New laws affect individuals: 1. Refundable child tax credit...Continue reading

Tax tips for employees going into 2016: During this time of the year, I regularly conduct complimentary tax planning sessions with my clients to help prepare them for next year's income tax outlook. The following are the top 3 issues raised by clients who are employees receiving W-2s:... 1. W-4 withholding and net pay Many employees complained that their pay checks (the net pay amounts) are not as big as they expected. Others are concerned that they did not withhold enough income taxes which could lead to a big tax bill at year end. These two common issues can easily be solved by adjusting the withholding on the Form W-4. Call your CPA and give him/her your latest pay stub. He/she should be able to run a simulation and recommend a reasonable withholding amount to be claimed on Form W-4 that would solve both issues at one fell swoop. By law, you can make changes to Form W-4 at any time, as frequently as you want, and your company's human resource department is required to process the changes for you every single time. 2. 401(k) allocation For those who participate in 401(k) plans, it is important to understand the tax implication of putting money into a plan's pre-tax and post-tax subaccounts. A proper planning can help manage your tax bills i.e. you pay an affordable amount of income taxes while you can still enjoy a comfortable life style during your retirement. Lastly, one should take full advantage of the company matching, if offered. It's free money! Plus, the compounding interests will help grow your nest egg even faster. 3. What job-related expense are deductible? If you claim itemized deductions such as medical expense or mortgage interest, you can also deduct unreimbursed business expense incurred when you (as an employee) pay for business expense to do your job. Common deductible expenses include uniforms, safety gears, and a home office. Other items such as union dues, safe deposit box rental and tax preparation fees are also deductible on the itemized deduction schedule. Start calling your CPA now to plan for your tax affairs. Don't wait till it's too late!

New law: IRS could revoke your US passport A new law says if you owe $50,000 or more taxes to the IRS, your US passport could be revoked if you have one, or your passport application will be denied. The revocation occurs after the IRS issues you a lien or a levy. If you promptly enter into a payment agreement with the IRS, your passport will not be revoked. This could pose some serious consequences to fellow US citizens who live or work overseas as they would not be able to t...ravel back into the US if their passports were revoked. The new law (Title XXXII of the 2015 FAST Act) was enacted last week as a part of the highway funding bill. Contact your CPA right away if you have any unresolved issues with the IRS or any other tax agencies. Don't wait until it's too late.

Year-end Business Tax Planning Tips Year 2015 is coming to a close in less than 30 days. There are still time for business owners like you to take advantage of some last-minute tax planning strategies. 1. Timing of Revenue and Expense... The timing of recognizing revenue and deducting expense can be legally adjusted to fit your earning and income tax projections. For example, if you know you are already in a high tax bracket in 2015, you may want to delay the recognition of revenue to next year, or you may want to accelerate some tax deduction this year to get yourself into a lower tax bracket. 2. New Equipment Purchase Even though the section 179 deduction limit is only $25,000 for the year 2015, you can still take advantage of it if you purchase new (or used) equipments and put them in service by year end. A lot of us are hoping that the Congress will pass a legislation to increase this deduction limit. If so, it is usually set to be applied retroactively. We shall wait and see. 3. S Corporation Shareholder/Employee If you are a shareholder and an employee working for your own S Corporation, you must issue a reasonable amount of W-2 payroll to yourself. Failure to do so could cost you a lot of back taxes and penalties. If you haven't done so, it's likely that you haven't been paying estimated tax payments either. You still have time to rectify the situation by giving yourself one big paycheck at the end of the year and allocate a big chunk of it to the federal and state income tax withholdings. Employing these last-minute withholdings is a crucial step in avoiding underpayment penalties. And finally, now it's the time to call your CPA and ask for a tax-planning session for your business and personal income tax issues. Please don't wait until the last minute.