What’s the most common type of business in the United States? Corporation, LLC, partnership? When you drive down the street you’ll primarily pick out chain stores and restaurants, or the first businesses that come to mind are larger businesses; however, the most common type of business in the United States is in fact the sole proprietorship. Just like any of the other business structures it has positive and negative aspects. One of the most attractive parts of a sole proprietorship is the ease of setting up the company. Unlike corporations or LLCs there are no articles of incorporation or organization to file, some sole proprietorships will need no licensing or permits, while some will, i

Sole proprietorship, partnership, corporation, LLCs, but which one is right for you? Many people are familiar with corporations, but they assume that corporations are reserved for large companies such as McDonalds or Microsoft. There exists a smaller kind of corporation, it’s called an S corporation and it’s a great business structure for multiple kinds of businesses including farmers. Some of the benefits that exist for S corporations is the tax breaks and liability protections that are afforded. S corporations have the same liability protections as C corporations, so their shareholders are virtually completely protected from lawsuit or credit claims. Furthermore, under current tax law

Many people own multiple pieces of property and may even rent to tenants. A common question is what deductions may be available for rental property. There are several varying deductions that may be available, some have been limited with the new tax law, and some have remained the same. Let’s examine the deductions available. Foremost, generally if you receive income from a dwelling unit, there are certain rental expenses that may be deductible on your tax return. Some of the expenses that may be included are mortgage interest, property tax, operating expenses, depreciation, and repairs. Additionally, you can deduct ordinary and necessary expenses for managing, conserving, and maintainin

One of the newest types of business structures is known as the limited liability company (LLC). LLCs combine some of the best aspects of sole proprietorships and partnerships with the liability protections of corporations. Due to the short history of LLCs each state handles them differently, however many of them have the similar rules and filings. First, it’s important to understand the benefits of a LLCs. Due to their structure they are typically treated as pass-through entities in terms of taxation. Pass-through entities allow a single tax for the business owner(s) unlike corporations which require double taxation. To add to the pass through nature, depending on the type of business b

As discussed in the previous two blogs, New Lease Accounting Standards Part 1 and Part 2, the Federal Accounting Standards Board (FASB) issued Accounting Standards Update No. 2016-02, Leases (Topic 842) on February 25, 2016. Under the new guidance, almost all leases will require balance sheet recognition as a right-of-use asset and lease liability. Further, the lease classification will affect the amount and timing of the lease and income expense. It is important to understand that lease contracts may contain non-lease components that should be accounted for using separate accounting models. Only components essential to the right to use the underlying asset are considered lease components

New Lease Accounting Standards – Part 3 As discussed in the previous two blogs, New Lease Accounting Standards Part 1 and Part 2, the Federal Accounting Standards Board (FASB) issued Accounting Standards Update No. 2016-02, Leases (Topic 842) on February 25, 2016. Once determining which classification the lease falls within, finance or operating, the lessee must comply with the new reporting requirements. For a lease classified as a finance lease, a lessee is required to do the following: Recognize a right-of-use asset and a lease liability, initially measures at the present value of the lease payments, in the statement of financial position. Recognize interest on the lease liability separa

As discussed in the previous blog, New Lease Accounting Standards Part 1, the Federal Accounting Standards Board (FASB) issued Accounting Standards Update No. 2016-02, Leases (Topic 842) on February 25, 2016. The update maintains two classifications of a lease, finance leases (which replaces capital leases), and operating leases. The lessee should classify a lease as a finance lease if any of the following criteria are met at the time the lease is made: the lease transfers ownership of the underlying asset to the lessee by the end of the lease term; the lease grants the lessee an option to purchase the underlying asset that the lessee is “reasonably certain” to exercise; the lease term is f

On February 25, 2016, the Federal Accounting Standards Board (FASB) issued Accounting Standards Update No. 2016-02, Leases (Topic 842). The FASB’s goal in doing so is to increase transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet and to require the disclosure of key information surrounding lease arrangements. In doing so, these new standards will result in a more faithful representation of the rights and obligations arising from leases. The pursuit of faithful representation requires lessees to recognize lease assets and liabilities that arise from leases in the statement of financial position. Moreover, the standards seek dis