Making withdrawals from your closely held corporation that aren’t taxed as dividends

Making withdrawals from your closely held corporation that aren’t taxed as dividends Do you want to withdraw cash from your closely held corporation at a minimum tax cost? The simplest way is to distribute cash as a dividend. However, a dividend distribution isn’t tax-efficient since it’s taxable to you to the extent of your corporation’s “earnings and profits.” It’s also not...
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Important tax aspects of operating your business as a sole proprietor

Important tax aspects of operating your business as a sole proprietor If you’re in business for yourself as a sole proprietor, or you’re planning to start a business, you need to know about the tax aspects of your venture. Here are eight important issues to consider: 1. You report income and expenses on Schedule C of Form 1040. The net income is taxable to you regardless of whether you...
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Keeping meticulous records is the key to tax deductions and painless IRS audits

Keeping meticulous records is the key to tax deductions and painless IRS audits If you operate a business, or you’re starting a new one, you know you need to keep records of your income and expenses. Specifically, you should carefully record your expenses in order to claim all of the tax deductions to which you’re entitled. And you want to make sure you can defend the amounts reported on...
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