How long should I keep my tax records?
Generally speaking, you should keep most tax records for at least 3 years from the date you filed your return or the due date of the return—whichever is later.
What’s the difference between a tax deduction and a tax credit?
A tax deduction reduces your taxable income. A tax credit reduces your tax liability.
What are the requirements to take a home office deduction?
To qualify for the home office deduction, you must meet specific requirements set by the IRS. The deduction is available to self-employed individuals, independent contractors, or business owners—not employees. The space must be used for regular and exclusive use and as a principal place of business. Eligible expenses include rent or mortgage interest, insurance, maintenance and repairs, property taxes, and utilities. Homeowners are also able to deduct depreciation on the portion of the home used for business.
Do I need to pay estimated tax payments?
You may need to make estimated tax payments if you receive income that isn’t subject to withholding—such as self-employment income, interest, dividends, rental income, capital gains, or certain retirement income.
Should I operate as an LLC, S-Corp, or C-Corp?
Deciding whether to operate as an LLC, S corporation, or C corporation depends on your goals around taxation, ownership structure, profit distribution, and administrative complexity.
What expenses is my business eligible to deduct?
Your business can deduct ordinary and necessary expenses paid or incurred in the course of operating your trade or business, according to IRC §162. Ordinary has been defined as meaning common and acceptable and necessary defined as appropriate and helpful to your business.
What is tax planning, and when I should start it?
Tax planning is the process of analyzing your financial situation or business structure in advance to legally minimize your tax liability. It involves taking advantage of deductions, credits, entity structures, timing strategies, and retirement planning—all to reduce the amount of taxes you owe, either now or in the future.
The best time to start tax planning is before the year begins—but the second-best time is now.
What should I do if receive a letter from the IRS?
If you receive a letter or notice from the IRS, don’t panic—but do not ignore it either. The IRS sends millions of notices each year, and many are routine or easily resolved. What you should do is open it immediately, read it carefully, and compare it with your records before responding. Alternatively, forward the correspondence to your tax professional.
What triggers an IRS audit?
The IRS doesn’t publish its exact audit algorithms, but several red flags and triggers are known to increase the chances of an audit—especially when your tax return contains inconsistencies, unusually large numbers, or patterns that differ from IRS norms for your income level. Common triggers include high income, unreported income, large deductions relative to income, cash-based businesses, home office deductions, large deductions for meals, and travel, round numbers, large losses from business activities that might be considered hobbies, foreign accounts, amended returns, and random selection.
How far back can the IRS audit me?
The IRS can typically audit your tax return for up to 3 years—but certain circumstances can extend that period significantly
Do I have to file taxes in multiple states?
You may need to file taxes in multiple states if your income is connected to more than one state. This can happen more easily than people realize—especially for business owners, remote workers, landlords, or investors.
Do you work with clients remotely?
Yes. We have worked with clients across the US, and in various foreign countries. The important thing to know is we have probably prepared corporate, fiduciary, individual and partnership income tax returns for every state.
How secure is your client portal?
All of our technology is cloud-based and complies with IRS standards. A copy of our Written Information Security Plan (“WISP”) is available upon request.
What’s the difference between a CPA and an enrolled agent (EA)?
Both CPAs (Certified Public Accountants) and EAs (Enrolled Agents) are federally or state-authorized tax professionals who can represent you before the IRS—but they differ in licensing, scope, training, and services offered. CPAs are licensed by the states, EAs are licensed by the IRS. CPAs specialize in tax, and financial reporting, whereas an EA is more likely to focused exclusively on tax.
I just started a business. What should I know about my potentially new tax compliance requirements?
Congratulations on starting your business! Along with the excitement comes tax compliance, which is critical to avoid penalties and build a healthy foundation. Areas to consider include choice of entity, understand your tax compliance obligations, know the tax due dates, and setup good bookkeeping early.