This is the second part of our series blog on business structures. Previously, we examined the lose structure of a sole-proprietorship, the most common form of business within the United States. The sole-proprietorship offers ease of starting up, pass-through income and deduct; however, also represents unlimited liability for the owner. The next type of business structure we will examine is the partnership. Partnerships are another common type of business structure. Partnerships are typically a meeting of two or more individuals with a common goal or business idea. There are several pros when considering a partnership including: Extra help between owners Additional know how and perhaps

America has long been a country of small businesses and corporations working to create a competitive environment that works best for the consumer. Many business owner’s operate as sole-proprietors, but is this the most effective or protective for them? We’ll examine the benefits and risks of separate business entities in a multipart series. Sole-proprietorships are the most common business entity in the United States. Part of the reason for the commonality of the sole-proprietorship is the ease of setting one up. For many, it is simply as easy as obtaining a business permit from your local government. As the sole-proprietor, you are entitled to all of the profits, losses, and liabilities

Every year around this time, people will begin to notice unknown numbers calling their phones throughout the day leaving automated voicemails. Often times these messages will be claiming pending lawsuits, tax problems, or even that they are the IRS. Avoid these calls, they are not real, all of the calls, texts, and emails are elaborate schemes to scam taxpayers out of their money and identities. Follow these tips to protect yourself. First is to beware of phishers, this is the most common way for scammers (criminals) to gather your information. They will pose as the IRS or employer’s and request documents or identification from the taxpayer. Whether it be by phone-calls or emails, the

The TCJA brought a tax overhaul that had not been seen in decades. Much of the attention was centered on the tax treatment of real estate and other assets. One aspect of the tax bill that was added and did not receive nearly enough attention was the bill’s Investing in Opportunity Act. This created a way for investors to invest their capital in a new program known as opportunity zones and opportunity funds. An opportunity zone is a program that was created to help revitalize economically distressed communities using private investments rather than taxpayer dollars. The private sector of money holds a lot of value within the United States so what is it in for the private investors who cho

Scholarships are a common and great way to pay for part of tuition, if not all of higher education’s expensive tuition. Scholarships will typically be applied to tuition or allowed for college expenses such as living, books, or supplies. A common question we receive is, are scholarships counted in income? Do you have to pay taxes on them? The answer is maybe, hopefully not. The general rule that applies is that if the scholarship is used to cover tuition and fees then it is not taxable; however, if the scholarship may be applied to other things such as living expenses it may be subject to income tax. In fact, sometimes a school may say they are awarding a tax free scholarship, but if it

Every year thousands of Americans suffer and file for bankruptcy. Bankruptcy is largely seen as a plausible and efficient (especially in Chapter 7) method of resolving debt and having a fresh start. But how does bankruptcy coincide with taxes? Do owed taxes go away? Let’s take a look. First, let’s look at the two types of bankruptcy for individuals, chapter 7 and chapter 13. Chapter 7 is a liquidation of your debts and provides a fresh start for the debtor. A chapter 13 is applied toward individuals who wish to keep their assets, this creates the repayment plan. The repayment plan can be 3 to 5 years in length and repays all of the debts. So, in the case of owed taxes, if you file a c

Part of the American dream has always been to own your own home. Every year thousands of people put down the payments, open a mortgage, and purchase their first ever home. As any homeowner knows, this can be expensive, between the insurance, mortgage payments, and interest, the costs add up. So the IRS decided to help the taxpayers out by allowing a deduction for interest paid on the mortgages. Publication 936 from the IRS was published and lays out the format for determining the amount of deduction allowed, but the good news is you can deduct the interest. Home mortgage interest is any interest you pay on a loan secured by your home (main or second). Additionally, it may be the origina