Accounting News and Notes » Atlanta Corporate Income Tax & S Corporation Return

Gwinnett/Duluth/Atlanta CPA Reminds Atlanta Taxpayers That Corporate Returns are Due March 15, 2010

John Dillard — Fri, 05 Mar 2010 12:58:05 +0000

Gwinnett/Duluth/Atlanta CPA Reminds Atlanta Taxpayers That Corporate Returns are Due March 15, 2010

It is certainly that time of year again. Please be reminded that corporate returns are due March 15. If we want to file by the due date, I will need to receive your data in next few weeks so that I will have an ample amount of time to file. As always, I will file for the automatic six-month extension in the event I do not get the data in time. Please be reminded that an extension to file is not an extension to pay and that both the IRS and the state expect you to pay your taxes as you earn the monies. Please be reminded there are no valid extensions after the September 15 final due date lapses. Below you will find a checklist to prepare your Corporate Income Tax Returns:

To process your corporate return, please forward your balance sheet and your profit and loss and copies of any W-2’s the corporation might have issued. If you have not yet done so, please be reminded that 1099’s should be issued by the end of January; your payroll service will handle this if you get them the information. Before you send the current year’s financial please be sure to always review the prior year’s balance sheet on the tax return and ensure that your internal books equals the return while being sure to make any appropriate adjustments. That way you will be assured of starting the year off with a clean set of records which will otherwise distort you current year’s operating results.

To complete your corporate return, please forward:

Your year to date Balance sheet, Profit & loss
Year end Bank Statements and Bank reconciliations
Aged Accounts Receivable
Year-end Inventory
Aged Accounts Payable
Year to Date Payroll Records by Employee
Notes Receivable and Payable Balances at Year end
Copies of new Notes
The amount of medical insurance paid for each shareholder
If your company is new, please forward copies of the incorporation papers.

Before you send your Year-End Financial Please be sure that:

The general ledger balance agrees to your checkbook and your bank reconciliation.
The Accounts Receivable balance agrees to your internal aging reports.
The Accounts Payable balance agrees to your internal aging reports.
You advise of any fixed assets that have been acquired or disposed of during the year.
That ALL of the balance sheet and profit and loss accounts are correct.
That you have only one retained earnings account.
That as of January 1st of the prior year that you closed the shareholder distributions account to retained earnings.
That the retained earnings account on your internal books equals or is reconcilable to the retained earnings to the last corporate tax return filed.

This is to confirm that you are aware are handling all of your payroll and independent contractor/1099 needs, of the need to have a business license, to pay the annual registration fee, to have your annual Board of Directors and Shareholders Meeting, and to file the county property tax report (please be sure to claim the Freeport Exemption on your inventory if you qualify as this can substantially reduce the amount owed). Please note that if you have not yet set up a retirement plan or have a formal financial plan, that I suggest that we sit down together soon to get the right plans in place to help ensure your long-term financial success! This is to confirm that I suggest that you formally tax plan at least twice annually.

http://www.hiscpa.com/article6.html Alpharetta/Roswell CPA Teaches the Tax Effects of Entity Choice
http://www.hiscpa.com/marketing-efforts.html Norcross/Sandy Springs CPA on Tracking Marketing Statistics for Your Georgia Business

And this is only some of the information available on our web site. You also have at our blog a host of other varied and timely tax and business management issues you can use.

John Dillard, CPA of His CPA, PC (An Atlanta Christian CPA firm) 1940 Woods River Lane, Duluth, GA 30097 Phone 770-814-9304 http://www.hiscpa.com/ http://www.john-dillard.com/ To retain John Dillard CPA (An Atlanta Christian Speaker/Author) for your business group or church congregation, you can contact him today at 770.814.9304

His CPA PC…A Christian Atlanta CPA Firm: Never Underestimate the Long-Term Benefits

Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Business Acquisitions/Sales, Forensic Accounting, Business Valuations and Bookkeeping.

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Duluth GA CPA Advises on Tax Return Preparation for Atlanta Business Owners

John Dillard — Mon, 01 Mar 2010 17:12:28 +0000

Duluth GA CPA Advises on Tax Return Preparation for Atlanta Business Owners

Keeping tax payers informed is one of the key tenants of assisting business owners with successfully addressing tax issues. Below are excerpts from a sample letter that might be used to ensure that the best CPA advice we can provide is made available to each and every business client:

This is to confirm that ASAP I suggest:

-You pay as an estimated tax payment against your 2009 income taxes at least $10K to the IRS and $3K to GA, using 2009 IRS Form 1040ES & GA Form 500ES respectively as these monies are already due and you to not meet the exceptions for paying these monies with the filing of your personal return on 4-15-10. Please be reminded that if we do extend the date to file your personal return that an extension to file is not an extension to pay.

-File and pay your 2009 taxes. Please be reminded that both the IRS/GA are a pay as you go system and that both will add penalties for late payment and late filing in addition to any interest income accrued and owing.

-That you consider and evaluate setting up an S Corporation to protect your personal assets from Corporate liability.

Understanding How Georgia S Corporations Pay Taxes

There are no income taxes are paid with the corporate return. The profits of the business are reported on the personal tax return of the S corporation’s shareholders. As long as you pay yourself a reasonable salary, you may also take shareholder distributions out of the business that are devoid of FICA/Medicaid taxes.

Additional components of S Corporations is that if you have corporate losses, and you fund (you put the money in the business) those losses personally, then you can deduct those losses on your personal return. Any losses that are funded by the bank (a direct loan from the bank to the corporation) or by trade creditors are not deductible.

Often you can set up a loan so that the bank lends to you personally and then you could do a personal loan to the company, which will result in you having contributed basis/the dollars to the business, thus making any losses that you fund deductible

http://www.hiscpa.com/budgeting.html Duluth GA CPA Helps Reduce Unnecessary Spending: Budgeting 101 by Roswell CPA
http://www.hiscpa.com/article1.html Atlanta/Gwinnett CPA Illustrates Difference Between Planning & Historical Accounting by North Fulton CPA
http://www.hiscpa.com/article3.html Gwinnett/Duluth Georgia CPA Teaches Personnel Keys to Managing Business Growth
http://www.hiscpa.com/article6.html Alpharetta/Roswell CPA Teaches the Tax Effects of Entity Choice
http://www.hiscpa.com/marketing-efforts.html Norcross/Sandy Springs CPA on Tracking Marketing Statistics for Your Georgia Business

And this is only some of the information available on our web site. You also have at our blog a host of other varied and timely tax and business management issues you can use.

Serving Atlanta, Duluth, Gwinnett, Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock, Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, Atlanta GA, Gwinnett County, North Fulton County, Cherokee County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Marietta, Milton, Norcross, Snellville, Roswell, Buford, Smyrna, Marietta, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Decatur. Sandy Springs, Peachtree City, Douglasville, Newnan, Griffin, Woodstock, Carrollton, Forest Park, Canton, College Park, Cartersville, McDonough, Riverdale, Fayetteville, Covington, Stockbridge, Conyers, Clarkston, Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Coweta, Dawson, and Douglas.

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Atlanta/Duluth GA CPA on Required Documentation to Prepare Corporate and Personal Income Tax Returns

John Dillard — Wed, 17 Feb 2010 17:14:55 +0000

Atlanta/Duluth GA CPA on Required Documentation to Prepare Corporate and Personal Income Tax Returns

Below is a sample letter that might be used to assist a taxpayer in ensuring that tax returns are properly prepared and substantive data is provided in order to adequately prepare both corporate and personal income tax returns, while keeping one’s tax bill as low as legally possible, while also staying focused on long term and strategic issues:

I am following up on the data you forwarded and had the below critiques. Please go over these ASAP and send back to me the revised data:

-If you are treating and recording the business’s you have listed separately they need to be appropriately listed and recapped. Please review/advise.

-Please confirm if/that you are doing all of your business in the corporate account. Otherwise you risk losing the tax advantages and legal protection of being incorporated.

-As you are using business mileage all others costs relative to the car should be treated as Shareholder Distributions. In the future all of these monies (such as repairs/advalorem/maintenance, gas, insurance) should be paid personally.

-Please take off of your business listings any monies you paid personally as charitable contributions and forward to me a recap of your charitable giving, while providing copies of year end statements from the organization you donated to.

-Please note that tax law will only allow you to deduct a business phone in your home, provided it is a second line.

-Please list the Insurance and Property tax on your home and utilities as Shareholder Distributions and then to pay these monies personally in the future.

-Please note tax law does not allow the deduction for the cost of clothing, unless it is for a uniform that is unsuitable for other use.

-Please confirm if the rent expense you listed was paid to an outside landlord.

-Please be sure for all corporate activity to list both the beginning and ending checkbook balance.

-Please advise if you have any other income, dividends, interest income, W’2’s etc.

-Please be reminded that tax law requires you to pay your taxes as you go. Please advise of the dates of all estimated tax payments to both the IRS and to GA.

-Please be reminded that the rules of an Offer in Compromise require all taxpayers to be current on both their tax filings and payments. Accordingly it will be imperative to both pay all taxes on your 2009 returns ASAP and to forward to me what your estimated profit will be from each business for 2010 so that I can advise you accordingly what you should be sure to pay as taxes as you go for 2010.

-I suggest ASAP that you retain a payroll service and to begin processing your W-2 wages and your required withholding. Please be reminded the above OIC (Offer in Compromise) rules will, as well as tax law, require you to pay yourself a fair and reasonable salary given position and profit.

Utilizing a payroll service will do much to make this administratively burdensome process more seamless than if you strive to go it on your own. To learn more visit http://www.hiscpa.com/payroll.html

Knowing what is a legal tax deduction and the documentation thereof is essential to sound business management. To see how you can be ready http://www.hiscpa.com/business-expenses.html

Ensure that your workers are properly classified predominantly to ensure that there are no workers, who are truly employees, that you are in error classifying as employees, visit http://www.hiscpa.com/independent-contratctor.html

Contact HIS CPA PC (A Christian Atlanta CPA Firm) today.

To learn more about addressing IRS Tax Issues and Back Tax Returns visit http://www.hiscpa.com/working-with-the-irs.html

John Dillard is an Christian Speaker/Author and an Atlanta CPA. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and a Voice of One: Nehemiah’s Prayer visit http://www.john-dillard.com/ or call John Dillard CPA today at 770.814.9304 (All Rights Reserved) Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!

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Award Winning Suwanee/Buford CPA on Checklist for Year-End Taxes

John Dillard — Sat, 06 Feb 2010 21:18:34 +0000

Award Winning Suwanee/Buford CPA on Checklist for Year-End Taxes

To complete your corporate return, please forward:

Your year to date Balance sheet, Profit & loss
Year end Bank Statements and Bank reconciliations
Aged Accounts Receivable
Year end Inventory
Aged Accounts Payable
Year to Date Payroll Records by Employee
Notes Receivable and Payable Balances at Year end
Copies of new Notes
The amount of medical insurance paid for each shareholder
If your company is new, please forward copies of the incorporation papers.

Before you send your Year-End Financial Please be sure that:

The general ledger balance agrees to your checkbook and your bank reconciliation.
The Accounts Receivable balance agrees to your internal aging reports.
The Accounts Payable balance agrees to your internal aging reports.
You advise of any fixed assets that have been acquired or disposed of during the year.
That ALL of the balance sheet and profit and loss accounts are correct.
That you have only one retained earnings account.
That as of January 1st of the prior year that you closed the shareholder distributions account to retained earnings.
That the retained earnings account on your internal books equals or is reconcilable to the retained earnings to the last corporate tax return filed.

This is to confirm that I suggest that you formally tax plan at least twice annually.

To process your personal income tax return, please forward:

Copies of all reported income forms, i.e. Forms W-2, 1099, brokerage statements, interest, dividends, etc.
Summary of all medical expenses with copies of all individual items over $1,000.
Summary of property taxes with copies of all individual items over $1,000.
Summary of Ad valorem Taxes (property tax on cars) with copies of all individual items over $1,000.
Summary of Mortgage Interest with copies of all individual items over $1,000.
Summary of cash and property contributions with copies of all individual items over $1,000.
Be sure to include any changes in address, dependents, filing status, or any other substantive changes from the prior year which would have impact on this years return.
Please forward student loan interest, child care expenses, tuition, and any other miscellaneous deductions/income.
Please be sure to let me know of any changes to the claiming of dependents, filing status, address, etc.
If you are a new client to us please bring along for both corporate and personal a copy of your prior year tax returns. If a brand new corporation, please forward along a copy of your incorporation papers, Federal ID #, and your S Corporation acceptance.

The initial due date for personal returns is April 15. For returns not filed by that date both the IRS and GA allow for a six month extension. Please be reminded that there are no valid extensions after the October 15 final due date lapses. Please be reminded that an extension to file is not an extension to pay and that you are required by tax law to pay applicable taxes as the monies are earned or you will be subject to additional penalties and interest.

Please be reminded that the mileage rate for 2008 is 50.5 cents per mile for 1/1/08-6/30/08, and 58.5 cents per mile from 7/1/08 to 12/31/08. For 2009 and 2010 the mileage rate is 55 and 50 cents per mile respectively. Please turn in an expense report monthly to get reimbursed for these and any other business expenses you might have paid personally. IRS tax rules require you to have a day by day log to support business miles. Please be reminded that extending the filing of a return does not delay the need to pay as you go as both the IRS & GA will bill you for penalties and interest if you do not pay your taxes during the tax year to which they relate.

I am looking to grow my business by adding key accounts like you with goals and aspirations just like yours. So if you know anyone looking for a Good CPA, please let me know and to check me out at www.HISCPA.com or our book ministry at www.John-Dillard.com

Please be sure to allow 10 days for me to complete your returns after I get all of the information needed.

John Dillard, CPA of His CPA, PC, 1940 Woods River Lane, Duluth, GA 30097 Phone 770-814-9304 http://www.HisCPA.com/ http://www.John-Dillard.com/

Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it

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Award Winning Atlanta CPA Offers Assistance with Georgia Corporate Income Tax Returns

John Dillard — Sat, 30 Jan 2010 12:56:09 +0000

Award Winning Atlanta CPA Offers Assistance with Georgia Corporate Income Tax Returns

Having helped Atlanta Taxpayers for Over Thirty Years with their Corporate & Personal Income Tax Return, I have learned that it is important to be a “Teaching CPA.” Be helping properly guide, assist and educate taxpayers I have learned that over time out tax clients become much more wise and prudent in both their financial and tax decisions. Below is a sample of a letter we might use to help a client understand the nuances of tax law, understand their personal tax situation, take every legal tax deduction and make prudent and long term financial decisions:

I did not see/know that the company owned a car as I saw car interest and insurance on the P/L, which should be moved to the Shareholder Distribution accounts as all of these monies should be paid personally, as the company does not own a corporate vehicle. I generally recommend that all of clients own their cars personally and then turn in an expense report to get reimbursed for their business miles. As such, all of the operating costs of the vehicle should be paid personally. Please re reminded to keep a by day log to support business miles.

Please move the Gain on Sale of Fixed Assets to Other Income Section so that your Internal Books and Records will properly classify Income and Expenses. Adjust your sale of the fixed assets so that the appropriate fixed asset accounts on the Balance Sheet are relieved/zeroed out.

Please confirm that the Long Term Debt amounts listed are correct and that all attendant Interest Expense is recorded.

Please adjust as of 12-31-09 so that Total Retained Earnings equals $100,000. Please be sure to make the adjustment in the year that needs adjustment/reconciliation.

Below is a list of Data needed for your personal return. ASAP after I get that along with your corporate data I will get the returns completed and out your way ASAP.

It appears you are renting your old home here. If so, please compete the attached being sure to prorate items between the time of personal use versus renting. Also, I will need the mortgage statement on this property and the original purchase price of the home so that I can record depreciation.

I did not see any information on the moving expense reimbursement you had mentioned. Please forward.

Did you have any other income such as capital gains, distributions from pensions, interest, dividends etc.

Please forward the property tax on the cars.

Please forward to me the date you moved to another state so that I can record accordingly and report your income appropriately on the state income tax returns.

Please forward to me a detailed description of the items you gave to charities being sure to value the items at what they would sale for at a flea market/garage sale.

Feel free to call might you have any questions.

http://www.hiscpa.com/article1.html Sandy Springs/Roswell CPA Illustrates Difference Between Planning & Historical Accounting
http://www.hiscpa.com/article3.html Gwinnett/Duluth CPA Teaches Personnel Keys to Managing Business Growth
http://www.hiscpa.com/article6.html Atlanta CPA Teaches the Tax Effects of Entity Choice
http://www.hiscpa.com/marketing-efforts.html Roswell CPA on Tracking Marketing Statistics for Your Georgia Business

And this is only some of the information available on our web site. You also have at our blog a host of other varied and timely tax and business management issues you can use.

John Dillard, CPA of His CPA, PC (An Atlanta Christian CPA firm) 1940 Woods River Lane, Duluth, GA 30097 Phone 770-814-9304 http://www.hiscpa.com/ http://www.john-dillard.com/

Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!

To retain John Dillard CPA (An Atlanta Christian Speaker/Author) for your business group or church congregation, you can contact him today at 770.814.9304

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Gwinnett CPA Advises Atlanta Business Taxpayers That IRS Just Announced the 2010 Mileage Rate

John Dillard — Thu, 10 Dec 2009 16:19:44 +0000

Gwinnett CPA Advises Atlanta Business Taxpayers That IRS Just Announced the 2010 Mileage Rate

The IRS Just Announced the 2010 Mileage Rate as 50 cents per mile. This is down from the 2009 mileage rate of 55 cents per mile. The predominant cause for the decrease is a direct result of declining gas prices in 2009 versus 2008. Please keep in mind that tax law requires all taxpayers who use an auto for business use to keep a by day mileage log.

John Dillard is an Christian Speaker/Author and an Atlanta CPA. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and a Voice of One: Nehemiah’s Prayer visit http://www.john-dillard.com/ or call John Dillard CPA today at 770.814.9304 (All Rights Reserved) Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!

Contact HIS CPA PC (A Christian Atlanta CPA Firm) today.

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Gwinnett CPA Teaches Business Clients Tax Law While Focusing on Operating Results

John Dillard — Mon, 02 Nov 2009 16:10:29 +0000

Gwinnett CPA Teaches Business Clients Tax Law While Focusing on Operating Results

When a CPA does a tax return they are best suited to give useful financial advice that an owner can use to turn information into profits. Just as a doctor will give invaluable insight to their patient, a CPA should be a clients closest financial confidant. Below is a sample letter that might be sent to a client to assist both in ensuring future business profitability and adequate tax documentation for a corporate/business client:

Regarding Your Corporate Returns

-Your cost of goods sold (cost of doing business) is 90% leaving only 10% to cover salaries and other expenses creating a book and tax loss of $100,000. I suggest ASAP that we review our pricing guidelines and adjust so that margins are at least 30%. This would allow for you operating expenses to remain the same and break-even. To ensure profitability, given present expense levels, I would suggest your strive for a gross profit margin of 35%. Please be reminded that the K-1 losses that are not currently deductible due to basis limitations are called suspended losses and are rolled forward until you have sufficient tax basis.

-Tax law does not allow S Corporation owners to deduct tax losses only to the extent or your tax basis (which is calculated predominantly by prior retained earnings and current loans made to the company). Therefore only approximately $15,000 of your $100,000 of tax losses are deductible.

-Tax law requires all S Corporation owners to take a fair and reasonable salary given position and profit. Based upon your operating results you might consider lowering your salary until profitable levels are maintained, while being sure to maintain the reasonableness statutes required by the IRS.

Regarding Your Personal Returns

-Please get to me a copy of the year-end statements showing total mortgage interest, cash contributions to charity and real estate taxes.

-Please get to me the property taxes paid on your personal vehicles.

-Please get to me the original purchase price and date of your rental property.

-Please turn in an expense report to get reimbursed for your medical premiums

-I did not see Association fees on your rental property.

Bookkeeping for a Small Business
Learn the ABC’s of accounting for the business and financial operations of your business. Visit http://www.hiscpa.com/keeping-books.html

Preparing and Reviewing Financial Statements
Financial results of your business are like a doctors chart of their patient, this will help enable you to understand financials and their use. See http://www.hiscpa.com/financial-statements.html

Monitoring Your Books at the End of the Month
Month-end control procedures are critical, as any variance to these will negatively impact the reliability of your internal financial. These are just a few of the tips we give clients each and every day. http://www.hiscpa.com/monthend.html

Contact HIS CPA PC (A Christian CPA Firm) today.

To learn more about tax entities and the taxation thereof visit http://www.hiscpa.com/article2.html There you will also discover a wide host of resources for American Entrepreneurs.

John Dillard is an Christian Speaker/Author and Certified Public Accountant in Duluth, GA. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and a Voice of One: Nehemiah’s Prayer visit http://www.john-dillard.com/ or call John Dillard CPA today at 770.814.9304 (All Rights Reserved) Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!

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Duluth CPA Presents Excellence in Service, Every Step of the Way

John Dillard — Fri, 16 Oct 2009 11:39:04 +0000

Duluth CPA Presents Excellence in Service, Every Step of the Way

Recently I had the opportunity to meet with one of our best clients to assist with pulling their information together in order to prepare their income taxes. As a CPA we serve both their business/corporate income tax returns as well as their personal and are very involved in ensuring that every single client, every single time, receives every legal deduction available. Below is a letter we recently received after such a meeting:

I want you to know how much I appreciate you. You were a champion with me today. Your going over the items with me taught me so much. I really appreciate how much you helped me today and let me come at a later time and explained what I could not understand. Your are an excellent role model.

God bless your efforts.

I tried to use the list you wanted initially but I could not see how I could put everything into those categories. I will begin in a week to start my posting on ledger sheets monthly and have those as the titles for each. Then we can see if that will work. My mother did that for years as a bookkeeper. Everything worked out fine.

God bless us as we work for HIS kingdom. Prayers for you.

Contact HIS CPA PC (A Christian CPA Firm) today.

To learn more about tax entities and the taxation thereof visit http://www.hiscpa.com/article2.html There you will also discover a wide host of resources for Atlanta Entrepreneurs.

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Atlanta CPA on How a Georgia LLC and Legally Convert to a Georgia S Corporation for Tax Purposes

John Dillard — Fri, 18 Sep 2009 00:17:23 +0000

Atlanta CPA on How a Georgia LLC and Legally Convert to a Georgia S Corporation for Tax Purposes

Converting your LLC to an S Corporation Might Save You Money

Though S Corps came into vogue in the 1950’s when Congress passed legislation allowing business owners to pay their taxes on their business profits on their personal return, an Limited Liability Company (LLC) is a relative newcomer on the tax scene. Like an S Corporation the earnings from an LLC and their corresponding taxes are paid on the respective shareholders personal return. Though S Corporations earnings, as well as their shareholder distributions, have to be reported/paid based upon the S Corporations stock ownership, an LLC and its owners are legally able to allocate monies to its owners in any method or percentage that its members agree.

Disregarded Entities. Like an S Corporation, the earnings from an LLC are communicated to its owners via a K-1, which is a part of the Partnership Return/Form 1065. However it you are the sole-owner of an LLC, then you should file as part of your personal return a schedule C, which is the form that proprietorships as well use to report their operating results. Both an S Corporation and an LLC are considered “disregarded entities” for income tax purposes, which means that the entity does not pay income tax on the company’s earnings but that the owners pay/report their share of their personal income taxes.

Tax Differences. An LLC like an S Corporation has the tax advantage of not being subject to the double taxation affect of a C Corporation. An LLC pays FICA/Medicaid taxes on all of its net earnings, as long as all active employee/owners have paid themselves a fair and reasonable salary given position and profit. When an LLC converts over to an S Corporation, it does for predominantly for income tax purposes, qualified retirement plans and the need to pay a salary to its owners. For all other legal purposes the LLC that converts to an S Corporation for tax purposes remains an LLC for all of its other needs and issues. Thus, from a legal perspective the LLC remains an LLC in the eyes of the courts and the Secretary of State’s Office. In general terms the predominant legal differences are that an S Corporation will have directors, shareholders and officers whereas an LLC while have members; the owners.

Converting to an S Corporation. Whether your business had hundreds of clients, just a handful for only yourself. converting to S Corporation status, if you qualify is a prudent and sound financial decision. To be an S Corporation you have to meet four criteria. They include having less than one hundred owners/shareholders, all of your owners have to be citizens/resident aliens of the United States, that you are required to have a calendar year end and to have only one class of stock; as an LLC you will not have any. To convert your LLC to an S Corporation for income tax purposes you should complete Form 2553: Election to be a Small Business Incorporation. Generally this form should be filed within seventy-five days of the incorporation date or the first date of the tax year to which you desire the election to be effective. If you fail to meet these deadlines, the IRS has issued Revenue Procedures that, if you qualify, will allow an entity to receive the requested S Corporation effective date.

John Dillard is a Christian Speaker/Author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit http://www.hiscpa.com/ (An Atlanta CPA firm) and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and to learn about his ministry visit http://www.john-dillard.com/ To contact John Dillard CPA (Atlanta Christian Author/Speaker) today call 770. 814.9304 proudly serving Duluth, GA, Gwinnett County and Beyond.

“Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!” What, then, shall we say in response to this? If God is for us, who can be against us? Romans 8:31

Why are these verses here? Learn how HIS CPA became a Christian Accounting firm visit http://www.hiscpa.com/christian-CPA.html

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Atlanta CPA Advises on Helping Understand Tax Benefit of C Corporations vs. the Tax Savings Afforded by S Corporations

John Dillard — Tue, 08 Sep 2009 15:52:34 +0000

Atlanta CPA Advises on Helping Understand Tax Benefit of C Corporations vs. the Tax Savings Afforded by S Corporations

For the past several decades as an Atlanta CPA I have been bombarded by new business owners seeking to understand the tax benefits of a C Corporation versus the permanent income tax savings afforded an S Corporation. To this cause, I recently received this inquiry off of my website:

Hello. I am researching C vs. S Corps. Is double taxation the primary downside of using a C Corp. for a home based business. What if you avoid taking dollars out of the company as distributions by taking salary and other tax deductible benefits instead?

Many taxpayers come prepared with their own predetermined answer for me to supply them. In those circumstances, it is essential for the CPA to be a quick study and to address their individual needs both accurately and succinctly. To this end I prepared the below response:

Over the years there have been many very popular books written about this idea and though in adsentitia, they might make sense, in the bigger picture they will lead tax payers to overpay their taxes. Inherent in many erroneous tax arguments is that a taxpayer does not plan to take the monies out of their business. However, I have met to meet the client who is in business to accumulate wealth in the business and not for their selves or their family. Thus, many arguments fail at their basic level in that their initial premise is invalid. Also, it many times scenarios fail to point out the broader picture rather than the tax nuances as a whole and not just a small portion of tax law. Furthermore, I suggest all of my business clients only listen to tax advice from a CPA who has at least ten years of experience with preferably at least five years as serving as a Chief Financial Officer. By gaining the insight of both public and private accounting, a CPA will be better served/ready to address most all of your operational and tax issues.

On His CPA’s website at http://www.hiscpa.com/article2.html you will find a explanation that will teach you as to the many variables affecting entity selection for your Georgia based business. There you will find many of the rules and regulations regarding entity selection in a straight-forward style which is easy to both digest and understand. Also at http://www.hiscpa.com/article6.html you can find an actual example of how entities are taxes and the nuances thereof. I have learned that by having a sample or illustration does much to remove the mystery of entity taxation issues.

If you are already a C Corporation and desire to be taxed as an S Corporation you may make a timely election by filing Form 2553. The IRS also allows, if you qualify for certain exceptions, to make the election even if you might have missed the original deadline. To learn more visit http://www.hiscpa.com/blog/2009/05/29/atlanta-cpa-gets-back-81000-refund-from-irs-for-atlanta-client/

I am committed to living out the “Golden Rule” of treating our clients as our friends and giving the best service possible. Our goal of Serving Him as We Serve You, will help you receive the very best advice we can provide. I would welcome meeting to get started and I have time openings later this week and please note: our initial thirty minute consultation is free.

John Dillard is an Christian Speaker/Author and Certified Public Accountant in Duluth, GA. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and a Voice of One: Nehemiah’s Prayer visit http://www.john-dillard.com/ or call John Dillard CPA today at 770.814.9304 (All Rights Reserved) Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!

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