Can you prepare taxes for people without having a degree? 

Answer by Wray Rives: Yes you absolutely can  There are virtually no minimum standards to be a professional tax preparer.  As Nathanael Pine notes you register with the IRS, pay your fee and you are a Registered Tax Preparer.  While most of the more reputable tax prep shops are going to require you to have […]

I am starting an online subscription service. Should I create an S Corp or C corporation? 

Answer by Wray Rives: If you intend to seek outside investors, a C Corp is typically the way to go.  S Corp offers some tax advantages for a closely held business, but there are limitation to ownership and you cannot have more than one class of stock.  Additionally the passthrough taxation is not appealing to […]

Of the U.S. states which levy sales tax, which of them hold “sales tax holidays” and when do they hold them? 

Answer by Wray Rives: First it is important to know that most of the sales tax holidays are limited in their application. The majority of the holidays are promoted as a "back to school" break and are timed to occur early to mid August and apply to things like clothing and in some other cases […]

How do I select a good accountant for my small business? What questions should I be asking? 

Answer by Wray Rives: Peter Baskerville has a really good answer (and not just because he gave me a shout out), but you should be choosing an accountant for a small business based on if they are adding value to your business.  In my experience small business owners fall into two categories #1 they have […]

What are the advantages and disadvantages of buying LLCs for rental property? 

Answer by Wray Rives: I assume you mean buying rental property in an LLC as compared to buying it as an individual. The primary advantage is the LLC will offer you some level of liability protection of your personal assets from any liabilities that may arise from the rental property. The primary disadvantages are: The […]

Do companies have to pay taxes on money from the sale of used equipment? 

Answer by Wray Rives: Yes, if the equipment is sold at a gain, then the gain is taxable. Business equipment is typically depreciated and the basis for tax purposes is the original cost less depreciation. If you sell the equipment for more than the basis, it creates a taxable gain. If you sell for less […]

What is an exempt payee on a W9? 

Answer by Wray Rives: An exempt payee for W9 purposes is any of the following: An organization exempt from tax under section 501(a), any IRA, or a custodial account under section 403(b)(7) if the account satisfies the requirements of section 401(f)(2); The United States or any of its agencies or instrumentalities; A state, the District […]

What is an accounting audit? And What happens during an audit? 

Answer by Wray Rives: An accounting audit is a review of a company's accounting records to determine if the financial statements of the company are accurate and fairly reflect the financial condition of the business. Most people think of audit as being when an outside accounting firm, sends people into the business to review the […]

What are the pros and cons of creating an LLC vs. an S corporation? 

Answer by Wray Rives: Actually an LLC and an S-corp are NOT comparable types of entities.  In fact the majority of S-Corps formed today are in fact LLC's.  An LLC is a legal type of entity created under the laws of your particular state while an S-corp is a type of tax entity for US […]

If I start my own business as a LLC, can I do a personal draw-down from my company bank account to my personal bank account as a salary? 

Answer by Wray Rives: Unless you make an election to have the LLC taxed as a corporation, then you can freely move money between the LLC's bank accounts and your personal accounts any time you wish.  It is not a salary as all the income of the LLC is your personal income and is the […]