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Seattle Tax Law Blog

Could filing your business taxes cause trouble with the IRS?

Business owners often have to perform a wide range of tasks for the company that they start and run. While you may not have had any experience with financial record-keeping before you started the business, you may start to perform minor accounting tasks as a way of keeping costs low for your company.

Software can make it easy to track account balances and withhold the proper amount of employment taxes. It's only natural that those who handle their own financial records may also decide that filing their own taxes for the business would be an affordable alternative to paying hundreds of dollars for professional accountants to prepare the tax return.

What happens if you receive a letter of deficiency from the IRS?

If you are like most Americans, you pay your taxes, but you try to avoid overpaying them by making sure you get all the right deductions and tax credits. After all, who wants to send Uncle Sam more money than he's entitled to from the paycheck you work so hard for?

Trying to minimize tax obligations and be smart about what you file and what you write off can help you financially, but it can also open you up to potential issues in the future. For example, you could accidentally pay less than you owe, leaving you vulnerable to action by the Internal Revenue Service.

IRS can take your passport if you have high tax debt

Delinquent tax debt can be a heavy burden for you to bear. The IRS can put a lien on your home or garnish your wages. They can often do this automatically or without the use of a court order. They can also revoke your passport.

If you have what the IRS calls “seriously delinquent tax debt,” the IRS can ask the state department to revoke your passport or deny an application or renewal. Until you can satisfy your debt, you will not be able to use your passport for international travel.

How will my choice of entity for my new business affect my taxes?

When you start a new business, you have to take many choices into consideration. Each decision you make will take into account the type of business you plan to run and how you plan to run it. As you plan your new business structure, one major decision will be which type of business entity you want to create.

Each type of business entity offers different tax benefits. Understanding how your business runs will help you understand which tax structure benefits you the most.

Overturned tax law could mean income taxes in Washington state

Businesses and residents of Washington may have to start paying more income taxes. A recent decision by the Washington state Court of Appeals has left the door open for a local income tax.

A 1984 law prohibited cities and counties from collecting net income tax. The court has now ruled that law unconstitutional. Lawmakers will try to decide if Washington needs a new law banning local income taxes.

What to do if you receive a tax audit notice

The reason that the IRS conducts tax audits is to uncover inaccurate tax returns. If your tax return contains inaccurate information, you may be subject to an audit. During the audit, the IRS will determine if there is any reason to penalize you for inconsistencies on your filing or return.

The process

Quarterly payments can help you move your business forward

Owning a business can be an excellent means to support your family, develop a niche for yourself and bring your dreams to fruition. And although business ownership may provide you with the right to determine your schedule and free you from answering to a boss, it comes with some added responsibilities.

Whether you work alone or have employees reporting to you, you need to maintain financial records for your company. And as opposed to people working for a W2, you must pay quarterly taxes. But when finances are tight, you might wonder whether making quarterly taxes is beneficial.

Sales tax exemption reform could affect Washington businesses

Washington businesses may soon experience decreased sales due to new state tax legislation. Under Senate Bill 5997, which narrowly passed over the last weekend of April, Oregonians shopping in Washington may no longer be able to claim sales tax exemptions at the register by simply presenting their IDs. Washington business owners are concerned that this change in policy will drastically affect their business as fewer Oregonians will be willing to make purchases in Washington.

 

What you need to know about taxes if you have a side hustle

For many Americans, a side hustle is a great way to earn some extra income. It can also help you transition into a new career, perhaps as a small business owner. There are many reasons you may choose to work as a freelancer, and while there are perks to the gig economy, things can get complicated at tax time. Here is what you need to know about filing taxes for your side gig this year.

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