Comparison for LLC and C-Corporation in Delaware

Comparison for LLC and C-Corporation in Delaware   This article will compare the difference between Delaware-Corporation and LLC from structure, registration requirements, and tax treatment.   Structure     Corporations Limited liability Companies No. of Shareholder/ Member At least 1 Shareholder At least 1 Member No. of Director 1 N/A Characteristics 1. Corporations are intended to provide limited liability; shareholders are generally not individually liable for the debts and obligations of the company. 2. Corporations are assessed corporate taxes on their own profits. Shareholders are taxed separately, if the company distributes dividends to them (or if it pays them a salary, in the case of employee owners). 3. Corporations are allowed to keep $250,000 in retained earnings without accumulated earnings tax. 1. LLCs are intended to provide limited liability for founders; moving liability for debts and obligations of the business from the entrepreneurs into the company itself. 2. LLCs offer […]

Comparison for LLC and C-Corporation in California

Comparison for LLC and C-Corporation in California   This article will compare the difference between California-Corporation and LLC from structure, registration requirements, and tax treatment.   Structure     Corporations Limited liability Companies No. of Shareholder/ Member At least 1 Shareholder At least 1 Member No. of Director 1 N/A Characteristics 1. Corporations are intended to provide limited liability; shareholders are generally not individually liable for the debts and obligations of the company. 2. Corporations are assessed corporate taxes on their own profits. Shareholders are taxed separately, if the company distributes dividends to them (or if it pays them a salary, in the case of employee owners). 3. Corporations are allowed to keep $250,000 in retained earnings without accumulated earnings tax. 1. LLCs are intended to provide limited liability for founders; moving liability for debts and obligations of the business from the entrepreneurs into the company itself. 2. LLCs offer […]

U.S. Tax Deadline for Individuals Extended to May 17

U.S. Tax Deadline for Individuals Extended to May 17   On March 17, 2021, the Treasury Department and Internal Revenue Services announced that the federal income tax filing due date for individual for the 2020 tax year will be automatically extend from April 15,2021 to May 17, 2021.   Individual taxpayers can also postpone federal income tax payments for the 2020 tax year due on April 15, 2021, to May 17, 2021, without penalties and interest, regardless of the amount owed. This postponement applies to individual taxpayers, including individuals who pay self-employment tax. Penalties, interest, and additions to tax will begin to accrue on any remaining unpaid balances as of May 17, 2021. Individual taxpayers will automatically avoid interest and penalties on the taxes paid by May 17.   You do not need to file additional forms or call IRS to qualify for this automatic extension. Individual taxpayers who need […]

Comparison for LLC and C-Corporation in New York

Comparison for LLC and C-Corporation in New York   This article will compare the difference between New York-Corporation and LLC from structure, registration requirements, and tax treatment. And give you couple of examples of tax calculation for your reference.   Structure     Corporations Limited liability Companies No. of Shareholder/ Member At least 1 Shareholder At least 1 Member No. of Director 1 N/A Characteristics 1. Corporations are intended to provide limited liability; shareholders are generally not individually liable for the debts and obligations of the company. 2. Corporations are assessed corporate taxes on their own profits. Shareholders are taxed separately, if the company distributes dividends to them (or if it pays them a salary, in the case of employee owners). 3. Corporations are allowed to keep $250,000 in retained earnings without accumulated earnings tax. 1. LLCs are intended to provide limited liability for founders; moving liability for debts and […]

U.S. Tax Tips When You Got a PPP Loan

U.S. Tax Tips When You Got a PPP Loan Paycheck Protection Program (PPP) loan is intended to help small businesses maintain payrolls and continue necessary payroll-related payments like rent and utilities. And if you meet the criteria, the loan may be forgiven. However, some small business owners do not know how to deal with this PPP loan forgiveness when they file the tax return. This article will give you some tips.   Congress specified, and the IRS clarified, that forgiven PPP loans will not count as taxable income. This applies whether your entire loan is forgiven or just a portion.   For the expenses paid with PPP loan, IRS initially stated that those expenses cannot be deducted if the loan was or will be forgiven. However, that changed with the coronavirus relief act signed into law on Dec. 27, 2020, which specifies that deductions should not be denied simply due […]

Tax Changes You Need to Know Before Filing Your U.S. 2020 Tax Return

Tax Changes You Need to Know Before Filing Your U.S. 2020 Tax Return   There are several tax changes or annual inflation adjustments for tax year 2020. This article will give you a short checklist of tax changes you need to know before you file the 2020 tax return.   Stimulus Checks   During 2020, as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act’s $2 trillion relief package, the government sent up to $1,200 in the form of a stimulus check to millions of Americans. But do you know how to report your stimulus checks income when you file the tax return? The good news is your stimulus check will not count as taxable income. Eligible Americans who did not receive the first or second payment can claim a Recovery Rebate Credit based on their 2020 income on the 2020 tax returns.   Standard Deduction   Standard […]

Why I Receive the US Form 1099-INT?

Why I Receive the US Form 1099-INT?   If you received interest more than $10, you would get a Form 1099-INT. A 1099-INT tax form is a record that a person or entity paid you interest during the tax year. You may not have to pay income tax on all the interest it reports, but you still need to report this information on the return.   The Internal Revenue Service requires most payments of interest income to be reported on tax form 1099-INT by the person or entity that makes the payments. This is most commonly a bank, other financial institution, or government agency.   The form 1099-INT will include your Social Security Number or Taxpayer Identification Number and the amount you received. When you file your tax return, you don’t need to attach the copies of the form 1099-INT you receive, but you need to report the information from […]

Prepare for Your U.S. Tax Return

Prepare for Your U.S. Tax Return   The tax season is coming. Kaizen highly recommend you gather and prepare you tax documents in advance for your 2020 tax return. The sooner you file the tax return, the sooner you will get you refund. This article will give you a checklist of basic documents you should prepare.   Personal Information Social Security numbers and dates of birth for you, your spouse and other dependents on your tax return. If someone does not have a Social Security number, you will need their tax identity numbers instead. Copies of last year’s tax return, if possible.   Income Information Income from employment: you should receive the Form W-2 from your employer. Investment income: Various Form 1099, such as1099-INT or 1099-DIV. Income from state and local income tax refunds and/or unemployment: Forms 1099-G. Alimony income: taxable alimony received (only appliable to divorces finalized before January […]

U.S. Second Round of Economic Impact Payments

U.S. Second Round of Economic Impact Payments The IRS and the Treasury Department began issuing a second round of Economic Impact Payments, often referred to as stimulus payments, late December 2020. This article will give you a summary of the second round of economic impact payments.   How Can I Receive the Second Payments?   According to the IRS, there is no action required by eligible individuals to receive this second payment. The payments are automatically sent to the eligible individuals.   Am I Eligible for the Second Payments?   Generally, U.S. citizens and resident aliens who are not eligible to be claimed as a dependent on someone else’s income tax return are eligible for this second payment. Eligible individuals will automatically receive an Economic Impact Payment of up to $600 for individuals or $1,200 for married couples and up to $600 for each qualifying child. Most people who have […]

Returning an IRS Erroneous Refund

 Returning an IRS Erroneous Refund   Sometimes taxpayers may receive the erroneous refund by IRS’s mistake. The “erroneous refund” is the refund you are not entitled to at all or for an amount more than you are entitled to. If you receive the erroneous refund, you have the legal obligation to repay the amount to the IRS. And the sooner the better – holding onto the money for too long could result in the need to pay interest or penalties. For example, millions of stimulus checks were sent out to the unqualified taxpayers (nonresident aliens) by mistake, and the taxpayers are required to return the payments immediately to the IRS.   If your refund was a paper Treasury check and has not been cashed, you should write “Void” in the endorsement section on the back of the check and attach a note stating, “Return of erroneous refund check”. Then you […]

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