Whether you want to change the business address, add a DBA to the registry, add or subtract an officer to the company, and even change the percentage of shares between the current owners, all of that can be done with an Amendment application for the registered corporation. There are a few steps that many people are not aware of when it comes to making these changes to a corporation that will not only expedite the amendment process, but also show how well you know your business and what is needed from you without being asked.
One myth to making amendments to a registered corporation is that you only need one signature to make changes, given that there is more than one owner to the corporation. The amendment form requires all signatures to be included with the changes that are part of the most previous filed form with the state. Usually these forms not only require all the signatures, but also that they may be notarized by a state approved notary. So make sure to bring all of the owners and their ID’s along to the office so that all may sign in front of the notary, or at least have the amendment form signed by a notary and brought along with copies of the owner’s identification cards. Make sure to bring the following with you:
- Identification Card (Drivers License of all officers)
- List of company names wanted (in case the first and second choices are not available
- Proof of Address
- Share Distribution between owners
Another myth that is popular amongst the accounting community is that people think registration fees for every state is the same, and businesses will just vary the price to make more money. Every state has their own specific fees based on what type of business you are registering, the industry are applying for, and even how many officers are actually being registered on the form. The prices are usually based on how many different forms are necessary to file and how long it takes on average to register that corporation in that specific state. The fees are usually almost always included in the final price of registering the company.
Now there is one thing that you wouldn’t find on a blog for a company that registers companies for a living, and that is helping the customer with information that could ultimately take away from the company itself. Many people are unaware that all of these registering abilities are available to the everyday person. Anyone has access to these state owned sites and ability to the fill out the necessary online forms to get the companies registered. The reason one comes to a company like Tax House is for the years of experience in registering corporations, figuring out the best possible structure for the individuals’ needs, and also the long term support that comes with every registration so that if anything happens, Tax House would be there to help with!
Starting your own business can sometimes be a difficult and tedious process. Many people think that one has to contact a corporate attorney or even a CPA to register a corporation in the State of Florida or anywhere else for that matter. The process is actually much simpler than one thinks. To start the process of course you need to figure out a few simple details:
- What type of business do you want to register the Employer Identification Number under?
- What name do you want to use for the business?
- The business address location
With these details in place, you can register a new corporation in the state of Florida within 48 hours. Of course there are a few things that can be asked of you to figure out the best corporate structure based on your business needs. If you are a United States resident or not will vary that information, and also how large of an income you project your business to have in the next few years will also vary the type of structure your business should have.
There are few states in the US that have tax breaks that many people don’t know about known as “tax havens” so that the primary shareholder and those registered under the corporation are not only protected through a “Corporate Shield” but are also getting the best tax breaks from the IRS. Registering in these kinds of states will also keep a door open for growing and expanding your business on a national level, and in some cases, an international level.
The key thing to remember is to always make sure that you trust your tax preparer and the company that is registering your corporation. An honest preparer will make sure that they have your company’s future in mind and that you can get the best results possible.
The IRS provides taxpayers with education credits that help the cost of higher education by lower tax owed on a return. There are two education credits available: American Opportunity Tax Credit and Lifetime Learning Credit.
There are 3 requirements to deduct education payments to an institution on your tax return. First, you or a dependent must have qualified education expenses for higher education that includes tuition and even books costs. An eligible student must be enrolled in an eligible educational institution, and of course, the eligible student must be yourself, your spouse, or a dependent listed on your tax return for that year.
To figure out which credit you may qualify is actually a lot simpler than most people know. The America Opportunity Tax Credit is more common then the other as it is closely associated with the initial first 4 years for a bachelor’s degree. You must meet the following requirements:
- Be pursuing a degree or other recognized education credential
- Be enrolled at least half time for at least one academic period* beginning in the tax year
- Not have finished the first four years of higher education at the beginning of the tax year
- Not have claimed the AOTC or the former Hope credit for more than four tax years
- Not have a felony drug conviction at the end of the tax year
Of course the amount of credit will vary based on the AGI (Adjusted Gross Income) of your return.
The Lifetime Learning Credit is targeted towards students taking higher education courses that meet the following criteria and credit amounts will also vary based on income:
- Be enrolled or taking courses at an eligible educational institution
- Be taking higher education course or courses to get a degree or other recognized education credential or to get or improve job skills
- Be enrolled for at least one academic period* beginning in the tax year
Regardless of which credits one is eligible for, these are great credits that many tax preparers forget to include and therefore many taxpayers lose out on these great additions to tax returns. A really great handy chart that includes a breakdown of both credits can be found here at the IRS website: http://www.eitc.irs.gov/Other-Refundable-Credits/educompchart
Both UBER and Lyft consider their drivers as independent subcontractors, not to be confused with W-2 based employees. But when it comes to reporting the income provided by them, the drivers are considered neither.
The IRS rule for Independent Contractors are that anyone receiving a cash/check based income directly from an employer that is above $600, needs to receive a 1099-Misc for that tax year. Traditional employers submit, to the IRS and the employees, a W-2 form for the income paid out and tax that was paid to the IRS throughout the year.
But people that work for UBER, Lyft, TaskRabbit, etc receive neither of those forms. If they get anything from them, it would be a 1099-K, a very new and sort of complicated addition to the 1099 tax form “family”, which is used mainly to report credit and debit card transactions through a merchant services.
Many drivers that had been employees for most of their lives and are now their own “bosses” and are making their own hours have no idea what kind of information they need to keep or how to even handle this 1099-K form. They have never filed a Schedule-C on their return, or ever paid self-employment tax, so this 1099-K form just adds to the confusion.
It’s also not clear as to why UBER sends out the form to everyone regardless of the amount (min. threshold is 200 transactions per month or exceed $20K) and Lyft doesn’t send one out until it reaches those minimums.
Either way, from a legal and ethical standpoint, the taxpayer needs to file ALL of their earned income throughout the year regardless of how the companies that paid them files.
Over the years many people have asked us who is considered a dependent when it comes to declaring that person on their yearly tax return and what it means to be a married filing jointly or head-of-household.
Of course, right off the bat, any child that you may have is automatically considered a dependent as long as they meet a few criteria. First off the child must be under 24 years of age and have been either living with you in the same household, or you support them 100% (students living in an on-campus facility for college). Of course the amount of eligible credit will vary depending on the age of the child, amount of time that you have supported them during the year, and also if the child has some sort of disability. Another thing to keep in mind is that there is a difference between the individual tax credit and dependent care credit. The Individual Tax Credit is a standard deduction for all socials on the return, while the other is assistance by the government given to those individuals that fit the above criteria.
Another type of dependent care credit are those individuals that are NOT your child, but can be included as a dependent on your return based on a few details. A good example, which is usually the case for many clients, is an elderly individual that is either the parent of the grandparent. For these you can deduct the standard deduction only, unless there is some kind of disability associated with that individual.