Ten Things to Know About An LLC

You probably know of several businesses whose formal names end with the acronym LLC.  And you probably also know that LLC stands for limited liability company.

Here are 10 things you may not know.

    1. An LLC generally protects its owners from personal liability for business obligations in much the same way a corporation does, but an LLC is not a corporate entity.1
    2. Like a corporation, an LLC can do business in multiple states, although an LLC must be organized in a specific state.
    3. The owners of an LLC are called members. There is no limit on the number of members an LLC can have, and members don’t necessarily have to be individuals. Members’ management roles are typically spelled out in an operating agreement.
    4. Upon formation of an LLC, the members contribute cash, property, or services to the LLC in exchange for LLC shares or units.
    5. An LLC may borrow money in its own name and is responsible for repayment of the debt.
    6. An LLC is usually treated as a partnership for federal income tax purposes.(The remaining four points assume partnership treatment.)
    7. Like partners, LLC members are not considered employees of the company. However, an LLC can have non-member employees.
    8. LLC members are taxed directly on company income. The LLC itself doesn’t pay federal income taxes.
    9. If an LLC has a loss, its members generally can deduct their share of the loss on their own tax returns.
    10. For tax purposes, an LLC’s income and losses are divided among its members according to the terms of their agreement. Tax allocations must correspond to economic allocations of profit and loss.

An LLC is but one structure you might consider using for a business venture. The input of a professional may be helpful in determining which type of arrangement will best meet your objectives.

Source/Disclaimer:

1Each state has its own laws governing LLCs. Consult with an attorney before establishing an LLC.

T. Williams & Associates are willing to educate our clients as to what their financial statements say as well as make suggestions as to what courses of action are advisable. With the new year fast approaching, it’s important to understand the recent changes to our tax laws. Together, we can identify new ways to save you money and increase profits wherever possible. Through our experience and expertise, we have developed proven processes to help automate your bookkeeping, increase your cash flow, and ultimately save money on your taxes.

 

WE’RE HIRING REMOTE BOOKKEEPER – CLIENT ACCOUNTING

T. Williams & Associates, a full-service accounting firm, is looking for our next great team member to fill the role of remote bookkeeper – client accounting. This role represents a key member of our accounting services team.  Our firm services small businesses, so efficiency and accuracy are key in delivering clients error-free and timely financial information.

Recommended Skills/Qualifications:

  • Bachelor or Associate degree in Accounting and knowledge of current accounting standards and principles.
  • Experience bookkeeping for multiple clients.
  • Experience using Microsoft Office products (specifically Outlook, Word, Excel and PowerPoint).
  • Ability to adapt and learn new technology.
  • QuickBooks/QuickBooks Online experience preferred.
  • Minimum [2] years of experience in an environment with client contact.
  • Minimum [2] years of experience providing bookkeeping services.
  • Self-starter that is goal oriented and self-disciplined.
  • Able to prioritize work according to deadlines.
  • Excellent time management.
  • Ability to communicate in a professional manner in-person, via email and other electronic means.

Interested in joining our growing team? Submit a resume and cover letter.

Small Businesses Start Preparing NOW For Tax Season

The current U.S. tax law for individuals and small business owners is very complex.  Start preparing NOW.  One of the most followed personal financial tips is to consult a good accountant this season.

Here are a couple of major changes that may affect your 2018 tax returns:

Different Taxation Rules
Depending on your business entity, there are a variety of a correct ways you should be filing your business taxes. And getting it right can be hard for busy entrepreneurs. Sole proprietors have different taxation rules for LLC’s, S Corporations and C Corporations. Speaking to an accountant or tax professional can help you figure out what your obligations based on your business entity federal, state, and local.

IRS Releases Regulations on Passthrough Business Deductions
In August, the Internal Revenue Service issues proposed regulations for a new provision affecting passthrough businesses. The regulations would allow many owners of sole proprietorships, partnerships, trusts and S corporations to deduct 20 percent of their qualified business income. This new deduction is referred to as the Section 199A deduction or the deduction for qualified business income was created by the Tax Cuts and Jobs Act.  Eligible taxpayers can claim it for the first time on their 2018 federal income tax return.

Stay on top of these important dates:

April 15 – Tax Deadline
File electronically, no later than 11:59 p.m.  If you are mailing your return, your envelope must be postmarked by the deadline date.

October 15 – Extension Deadline
This is the last day to file your tax return if you received an extension from IRS.

Need more help making sense of it all this tax season?   Consider using a tax professional.  If you don’t have one yet, call T. Williams & Associates!

Special tax breaks for members of the military and their families.

There are some special tax breaks for members of the military and their families. Learn how you can save money on your taxes.

If you’re active duty military or a military spouse, there are a few ways to keep money in your pocket this tax season.

1. Moving expenses. Service members who are on active duty and move because of a permanent change of station (PCS) can deduct the reasonable unreimbursed expenses of moving.

2. Combat pay. Enlisted personnel and warrant officers who serve in a combat zone for any part of a month can exclude all military pay for that month from their income. Commissioned officers also can exclude a limited amount of pay.

3. Joint returns. Spouses who are not available to sign a joint income-tax return due to military duty may use a power of attorney or IRS Form 2848 to file the return.

4. End of Service. During the transition to civilian life, you may be able to deduct certain job search and/or moving expenses. You should also remember to meet with your financial professional to make sure you have adequate insurance coverage.

You can depend on the experienced accountants at T. Williams & Associates for fresh ideas to reduce your taxes through proactive planning and skillful income tax preparation. With us in your corner, you’ll take advantage of every avenue available to minimize your tax burden and maximize your income. For more help with individual or business taxes, connect with us today. Our team can help you with all your tax issues, large or small.

3 Money Management Tips to Meet Your Small Business Financial Goals at Year-End

Resources to help you with money management do not need to be an EXTRA scary task.  The perfect way to satisfy this year’s financial goals in your small business is to take one step at a time.

1) Set a budget and stick to it. If the idea of budgeting seems intimidating, start with something simple by writing down your monthly income (paychecks, child support, etc.) and how much money you spend each month (rent, food, child care, car loan, etc.). Use this budget worksheet to help you plan.

2) Give your business and personal finances a wellness check. Your personal finances and well-being are closely tied to how well your business is doing.  Whether or not your business is as healthy as you’d like to be, it is recommended to run a wellness check to ensure that you meet your business’ financial goals.

3) Hire a tax professional to help you with your year-end tax planning.  The US code can be complex and difficult to understand.  Tax planning allows you to take advantage of strategies that may help reduce your tax obligation. To make things even easier, we recommend researching your tax credit opportunities to reduce your liability.

T. Williams & Associates are willing to educate our clients as to what their financial statements say as well as make suggestions as to what courses of action are advisable.  With the new year fast approaching, it’s important to understand the recent changes to our tax laws. Together, we can identify new ways to save you money and increase profits wherever possible. Through our experience and expertise, we have developed proven processes to help automate your bookkeeping, increase your cash flow, and ultimately save money on your taxes.

If you enroll in our accounting services by December 31st, we are offering a two month FREE trial of our payroll and Online Quickbooks software!*

Please follow this link to schedule a meeting or conference call, so we can discuss your business’ needs and determine how much money we can save you monthly.

Church Payroll and Compensation Rules

Generally, churches and religious organization are required to withhold report, and pay income and Federal insurance Contributions Act (FICA) taxes for their employees. Substantial penalties may be imposed against an organization that fails to withhold and pay the proper employment tax.
In addition, this is a target audit item for the Internal Revenue Service when it comes to ministries and nonprofit organization. Some churches have historically mishandled employee treatment. Some churches hire payroll companies to handle this process.

Here are some special rules for compensation to remember:

Withholding Income Tax for Ministers
Unlike other exempt organization or businesses, a church is not required to withhold income tax from the compensation that it pays to duly ordained, commissioned or licensed minsters for performing services in the exercise of their ministry. An employee minister may complete an IRS Form W-4 Employee’s Withholding Allowance Certificate, and the church should report the compensation on a W-2, Wage and Tax Statement. If the minister is independent contractor, the church should report compensation on 1099-MISC, Miscellaneous Income.

Housing Allowance
A housing allowance can be beneficial for ministers because an allowance for husing ex excluded from federal income tax. However, it is not exempt from the minister-s self-employment tax. In order to qualify for the exclusion from federal income tax, two very important conditions must be satisfied.
1. The housing allowance must be board approved before it was paid.
2. The minister actually spent the allowance on eligible housing expenses during the year.

The church must make sure the amount they designate as allowance for housing is determine beforehand. It should be included in a board approved resolution and properly documented in the church records. Most of the time, it is reviewed and adjusted before the beginning of each new budget year.

Social Security and Medicare Taxes –
Federal Insurance Contributions Act (FICA)
FICA taxes consist of Social Security and Medicare taxes. Wages paid to employees of churches or religious organization are subject to FICA taxes unless, wages are paid for services by a ordained, commissioned or licensed minister or a church, pays the employees wages less than $108.28 in a calendar year or the church is opposed to the payment of Social Security and Medicare taxes for religious reasons files IRS Form 8274.

Withheld employee income tax and FICA taxes are reported on IRS Form 941, Employer’s Quarterly Federal Tax Return or an annual Form 944, depending on your required filing status.

Federal Unemployment Tax Act (FUTA)
Churches and religious organization are not liable for FUTA tax.