The amount of profit you can make before paying tax depends on various factors, including your filing status, tax deductions, credits, and other taxable income. Here’s a general overview… Taxable Income –  The amount of profit you can make before paying tax is typically referred to as your taxable income. Taxable income is calculated by subtracting allowable deductions and credits from your total income. Standard Deduction or Itemized Deductions –  Taxpayers can choose to cla

You can typically pay for various business-related expenses out of your business account, as long as they are necessary and ordinary expenses incurred in the ordinary course of conducting business. Here are some common types of expenses that you can pay out of your business account… Operating Expenses –  These are expenses necessary to keep your business running smoothly on a day-to-day basis. This category includes: Rent or lease payments for office space, retail space, or o

The amount of money you should keep in your business account depends on various factors, including your business’s financial needs, cash flow patterns, and long-term goals. Here are some considerations to help you determine an appropriate amount to keep in your business account… Operating Expenses –  Ensure you have enough funds to cover your ongoing operating expenses, such as rent, utilities, payroll, supplies, insurance premiums, and other regular business costs. Maintaini

The IRS obtains information about business ownership through various sources and mechanisms. Here are some of the primary ways the IRS may learn about who owns a business… Tax Returns –  Business entities are required to file tax returns with the IRS, which typically include information about the business’s ownership structure. For example, partnerships and S corporations must file Form 1065 and Schedule K-1, which report the ownership interests and allocations of profits and

Yes, the IRS can pursue tax liabilities owed by a business entity. Here are some ways in which the IRS can come after a business for unpaid taxes… Tax Liens and Levies –  If a business fails to pay its tax liabilities, the IRS may file a tax lien against the business’s property and assets. A tax lien is a legal claim against the business’s property to secure payment of the tax debt. The IRS may also issue a levy, which allows it to seize and sell the business’s property or as

Yes, the IRS can come after you personally for business taxes under certain circumstances. Here are some scenarios in which the IRS may pursue individual business owners or officers for business tax liabilities… Sole Proprietorships and Single-Member LLCs –  In a sole proprietorship or a single-member LLC, the business owner is personally responsible for all business debts and liabilities, including taxes. This means that the IRS can pursue collection actions against the indi

Yes, the IRS can pursue tax liabilities owed by a Limited Liability Company (LLC). However, the extent to which the IRS can collect on those liabilities depends on the structure of the LLC and the circumstances surrounding the tax debt. Here’s a breakdown… Pass-Through Taxation –  Most LLCs are treated as pass-through entities for tax purposes, meaning that the income, deductions, credits, and liabilities of the business “pass through” to the individual owners’ tax returns. I

Monthly expenses for a business can vary widely depending on factors such as the industry, size of the business, location, and specific operational needs. However, here are some common types of monthly expenses that many businesses incur… Rent or Lease Payments –  Monthly rent or lease payments for office space, retail space, or other facilities. Utilities –  Monthly bills for electricity, gas, water, sewer, trash removal, internet, and telephone services. Payroll –  Salaries

Yes, you can typically deduct the cost of gasoline used for business purposes as a business expense on your tax return. However, there are some important considerations to keep in mind… Business Use –  The gasoline must be used for business purposes to be deductible. This includes driving for business-related travel, such as visiting clients, suppliers, or conducting other business-related activities away from your primary place of business. Documentation –  It’s essential to

If a business doesn’t make a profit, it means that its expenses exceed its revenue during a particular period. While operating at a loss is not uncommon, especially for new or growing businesses, it’s essential to understand the implications and take appropriate actions. Here’s what can happen if a business doesn’t make a profit… Tax Implications –  If your business is structured as a sole proprietorship, partnership, or S corporation, business losses can generally be passed