Online Event Archive Recorded January 18, 2023
This pre-recorded webinar serves as your guide to preparing for the tax season by offering practical tips to enhance your tax filing experience. It reveals valuable insights into tax efficiency, helping businesses discover what can be written off and explore intelligent tax preparation strategies, while understanding potential tax credits. In addition to navigating seamlessly through key business tax filing deadlines, gaining clarity on various business tax forms, and grasping the essentials for a smooth tax filing process, the session covers common mistakes and best practices. Tune in to this informative session to refine your tax preparation strategies!
Transcript:
NCRC video transcripts are produced by a third-party transcription service and may contain errors. They are lightly edited for style and clarity.
Speaker 1 0:00
Sure, welcome everyone to tax prep session. This is a great time to do this session because the IRS will be opening up officially tax season on January 23. So this is a great time to really dive into tax prep for those who’ve never found taxes for the first time. For those who have those who need further, need further help, this session will help you do that. Next slide. So general housekeeping, this is going to be a brief rundown of taxes for 2023. So I want you to keep in mind as we move into each slide that every business is unique, there is no one size fits all. If you have specific help me help, I’m just seeking professional advice, because I said, every business is unique. And I’m going to talk about that a little bit more as we move through the presentation. So you’re in the right place, if you just started your business, and you want to knock the 2023 tax season apart, or you’re an existing business. And you know, you want to make sure that you have been doing everything right. Because a lot of times when you work with a tax professional CPA or an accountant, that you want to make sure that you are on the same page with them. And you make sure that you understanding. Because end of the day, once you sign that tax reform, you’ll become liable for whatever’s on there for not the taxpayer that’s in yellow. So disclaimer, as always, you know, this, this information this session is not intended to be legal or tax advice is for training purposes only. I advise you again, if you need specific information about your situation, you should seek a tax advisor or tax professional or a tax attorney. I want to first say to give yourself a round of applause for taking the entrepreneurship leap. As you’ve already seen, if you’ve been in business from from either from day one, to day two to 10 years later, it is not for the faint of heart. So I just will always want you to give yourself flowers to congratulate you on yourself, because it’s not an easy task for somebody to take on, especially when it comes to this time of the year when it’s doing taxes. Next slide. So facts come Believe it or not, every year small business owners overpay their income taxes by more than $2 billion. The overpayments are made because the business failed to take deductions that they were legally entitled to take. So that means that the IRS determined that a lot of times we’re not taking full deductions a lot of times because one we don’t know about these deductions, too. We’re kind of scared, like, can we really write this off? For three, we don’t really have any guidance on what we should be writing off on our taxes. So that’s why they estimated about 2 million billion dollars is being left on the table. And it’s lagging. So I want to get into a brief introduction of like, what are the differences between business tax credits, and business deductions? I always people don’t understand the two. And so I kind of want to talk about a little bit of what is a tax credit and what is the deduction. So tax credit is something that reduces your tax bill. So a tax deduction is reduces your taxable income, let me explain. So say you still have your nine to five job and you have a W two. Those are the credits, that’s going to reduce the how much you owe. So like once you start getting your taxes, they start putting your taxes and your information into the system, they start putting your income your W two everything else and say that you owe. So what a what a credit will do it will deduct the amount that you owe. And some examples of tax credits I’m getting some a little bit later is for instance, everybody knows the big Child Tax Credit. Well, the Earned Income Tax Credit. A tax deduction is reduces your taxable income. That means it will reduce not what you owe, but it will do some amount of your income. Let me give an example. saying your you know your reporting income of $50,000. So say you had a negative 12,000 in expenses, what that’s going to do is now your income is going to be more like 48,000 I mean 38,000 versus 50,000. So that’s how it reduces your taxable income. So remember tax side is going to reduce the amount that you owe and the tax deductions and reduce the amount of your taxable income. So we’re all going to be taxed at an income in a tax bracket can really range between 22% and 32%. Based on your situation based on if you have Are you single or you may Eric Murray file St. Marie file single, very file jointly, head of household, those play a factor on your taxable bracket tax bracket, and how you’re taxed by the IRS. Oops, thank you. Okay. Next slide. So tax credits, so here’s some of the tax credits I talked about. So remember you all, for those who didn’t get the stimulus, for whatever reason it was an error or whatever like that you got last year with a call recovery rebate credit. So did you didn’t get that $1,400, then if you didn’t get it, it’s still not too late to get the recovery rebate credit. That was $1,400. So that’s going to do is that’s going to limit, say, if you owe 1400, but then you apply that rebate credit, you’re not going to be on that 1400 anymore. Earned income tax. And we talked about, one of the things I like is the American Opportunity, credit and the Lifetime Learning Credit. So if you have children in college, or even yourself, there’s a certain amount that you can deduct for learning that’s automatic is given to you. So think of tax credit is something that the government gives to you, you really didn’t earn it, but they’re giving it to you, to help you with some tax burden. A tax deduction is things that is based on things that you spent, that you want to try to use to reduce your income, which is like home office expenses, business mileage, charitable contributions. Next slide. So also, I want to talk about as we’re going to continue our conversation on deductions is that the IRS for those who just started your business, meaning that you started your business sometime between January 1 Last year, to December 31 of last year, until about 2022, you’re able to duck up to $10,000 in startup costs. So what that means is, is if if the expenses prior to you start, people always ask me, Stephanie, do you know, what is my start date? How does the IRS determine my start date, I always tell my clients think about the day when you actually done something legally to your business, meaning that if you got an LLC, or you got your EIN number, anything prior to that can be used, I will say is your startup. Once you officially make your business known, then you really not in the startup deduction phase. So examples of so basically, how do you take that 10,000? So what do you take the 10,000? Is you got business startup, fast 1000, organizational costs of 5000. So I’m gonna go more into that in the next couple of slides.
Speaker 1 7:52
Okay, so business startup costs, these are the costs that you get, before you start the business we all have is this number is always going to be different. It’s not a one size fit all. So in this particular gave you a scenario, this is Tim say, Hi, Tim, everybody, Tim just started a business called frosting. And so as you know, when you start a bakery, anytime bakery, you’re gonna have some expenses to get your business started, no matter what it is. So when you when you’re starting a bakery, you’re gonna have like, you’re gonna you’re gonna need stuff, you’re going to need pots, pans, scales, flour, all kinds of things, on website, aprons, all kinds of marketing stuff, this can be considered your five up to your $5,000 in startup costs. So what if you didn’t spend $5,000? That’s okay, you just got to deduct the amount that you spent. But what if you spent over 5000 in this category, what the IRS allows you to do is what they call amortization, which allows you do is you can roll over so like say, you end up spending 7000 in this category, you can roll over $3,000 In the next 15 years and Sue has been depleted. That is a good thing. So don’t have to you don’t have to sit there and worry like, I didn’t spend all my I didn’t deduct all the 7000 I’m sure no, you can roll it over. So key make sure you keep that in mind. Especially if you’re flipping taxpayers. I know clients that they use different tax preparers every year. And so they’re not going to know about the amortization less than look at your previous tax returns to see if you have what they call a 181 87 carryover that’s on your schedule, that’s when your tax return. Other than that, they’re not going to know that you had a carryover. So make sure that if you do have a carryover, whoever is doing your taxes every year you need to look no like I still have $2,000 or $3,000 that I didn’t use last year, and then you just keep rolling over until you fully got that deduction. And so, again, those are expenses that you can deduct as your startup. Next I’m slagging yellow. So before you start So I gave you some examples. I talked them a little bit before. But before you start, I wanted to give you some visual examples of things that you can write off before you start it. Some people do customer service surveys or focus groups, market research expenses, product research, advertising, that people will do Facebook ads, or Google ads or Instagram ads, set up ads on LinkedIn ads, professional consulting fees, maybe you paid a CPA in the beginning, maybe you got an attorney, maybe you got a business coach, things like that. Equipment feeds, we talked about what a bakery, you know, ovens stoves, you need all that type of stuff. So think about equipment, if you are even doing Bath and Body products, you’re gonna need mixers and things like that, you know, everybody’s gonna have different type of equipment. Some people like me, my equipment is computers, printers, you know, earphones, things like that commercial lease, some people have what they call a brick and mortar. So they’re gonna do a lease, you know, if you want to start in a gas station, or a carwash or air salon, that’s the sit in your commercial lease, and training. If you pay for some training, a lot of professions like delimiters, and things like that, you have to go undergo some training. So all that is considered in your before you start at the left column. You can’t really see it too well, but it’s an IRS publication called business expenses. So anything you want to know IRS has publications for everything. And so if you want to learn more about that, before you start, go get the IRS business expenses publication, or you can email me and I can send it to you directly. Next slide on yellow. So what is organizational costs, these are things that you learn you already have paid, especially the ones that I have spoken to a lot of my clients, the incorporation fees, when you got your LLC, your whether your LLC DBA. Got your BBL, which is the basic business license, or your heart, which is the home occupation permit, those things you can write off, up to $5,000 and your organizational costs, partnership filing fees, legal fees, accounting fees, business organization meetings. So these are things also 5000. So what if you didn’t spend all 5000 That’s okay, you to duck but you can, same thing applied here that apply to the startup costs is if you spent more than that. So if you spend like $7,000, don’t forget that 2000 You can roll over up to 15 years. So this is an example of I gave an example of the business startup costs. And now I’m giving you an example of organizational costs. Everybody’s gonna have similar especially if you got the LLC, you know, depending on the state, you will be paid $200 175, Florida’s $90 Different things like that. We’re all gonna have incorporation fees, partnership fees, legal fees, accounting fees, and business organization needs. Based on lesson meetings, I’ve said you and your partner when some lunch, Wendy’s, and you talk about how to plan, business planning meeting, those are considered business organization meeting, if you are S Corp. C Corp is part of your requirements. I have meetings and minutes. So those things that you had prior to starting is what they consider your organizational costs. Next slide in yellow.
Speaker 1 13:31
So I talked about the rule. This is actually Rob, I want to clarify living more products, the IRS guideline is that your expenses need to be ordinary and necessary for your business. And what does that mean? It means that it has to be ordinary, meaning that it’s something that I have to do, right is ordinary, because I have a specific niche, right. So it’s ordinary to me. So my business expenses are going to be different from Danielle, Liz and Danielle’s expenses are going to be different from Carolyn’s and Carolyn’s expenses is gonna be different from Suzanne’s expenses, because we all have different types of industries, right? necessary means I can’t do it, but I can’t do run my business without these expenses, that makes it necessary. And so it has to be ordinary plus necessary. So you know, you can’t have a hair salon without having chairs, a shampoo bowl, a seat towels, you can’t have that stuff. And so that makes it necessary. Daniela so common business type deduction, I want to give you just a few home office. So if you’re in your home office right now, look around and see what’s in your home office. Everything in that home office is deductible. You might say, well, Stephanie, I don’t have a home office. I just have a little desk in the corner. Good for you. Let me tell you why. The I rest doesn’t specify what a home office is. It can be as long as there’s a dedicated space. I’ve had some clients that turned a closet into a home office. They just want to place they have kids, they want to place a peace and quiet. They converted a closet, they have a desk in their computer that can shut the door to Rs as long as it just has to be dedicated space. Some people work out of a dining room. That’s okay, that show dedicated space. And it’s based on the IRS basic base, your home office deduction or square footage. And so if you’re used as like a second bedroom, the kids are gone. You’re empty nester, you got a second bedroom. Typically a second bedroom is a 10 by 10 space, which, which is going to give you 100 square feet. So that’s how you kind of do it. So we think about your home office. Just kind of think about your perimeter, how many square feet that you’re using Office Supplies, home, internet cell phone, if you’re using your cell phone, your personal cell phone to make business calls, guess what you can write off a portion or all of your cell phone bills. You have to determine how much percentage that you use it for business and how much percentage use it for personal education utilities mileage and business insurance are some common business deductions that you know I typically see business owners are making regularly. Daniella Tomic some business expenses, you can’t do that. Unfortunately, I’m sorry. You know, you paid into it. But unfortunately, the IRS says you can’t do it. And these are considered like political donations, hobby losses, remember, so if you are hobby versus business, when you are hobby, you cannot write off deductions. But when you are business you can. So if you take a loss as a hobby, you just can’t you cannot write off deductions, entertainment expenses a couple years ago, you used to be to write off it’s entertainment expenses, used to see, you know, people taking their clients to ball games to concerts and dinner, things like well, dinner, you can still write off like concert tickets, baseball games, football games, those expenses you no longer can write off, there was a time when you could write it off. But now you can’t write it off. fines, penalties say you had to pay a late fee or something like that. You can’t write that off, and commuting costs. What that means is if you go to the same place every day as a business, they considered as a commuting costs. But if I’m going to go meet Daniela for coffee and talk about business, and we don’t do it often, it’s not part of my regular commute. The expenses that I have with Daniella can be deductible. But if I was going to see Daniel every day as part of my job, I cannot write that off. Next slide. So it’s quiz time. So I want everybody to go to the chat. And we’re going to test your knowledge. I want to see what you have know so far, and to see and explain a little bit more. So Daniel, first quiz. I want you to just briefly put your answer in the chat. Again, next slide, Daniela. Okay, so true or false? I can deduct breast augmentation or breast implants. True or False? Write your answers in the chat really quick. That’s right, true or false? Okay, I see some fours. Okay. Give a couple more seconds for people to visit this site. Participate. Fast, fast, fast, okay. One more second. Almost gets false. Okay. So Danielle, Can you reveal the answer? Like you said, yes. Okay. The answer is true. So ever, most everybody put false. Believe it or not. You can write off breast augmentation. Let me tell you why. So, in a case versus test versus Commissioner, she was a exotic dancer. Her name was chesty love. And she kept getting breast augmentations. Because she said, this is the bigger, bigger breasts were the bigger the tips. So she tried to write it off and they said, No, you can’t do it. She challenged the IRS and said, basically what I was telling you she said the more her breasts got bigger. Believe it or not, y’all she went to a size 56 FF I didn’t know you go that far. But she’s had, the bigger her breasts were the more money she made. So she challenged the IRS and guess what, it was ordinary necessary for a business she was able to substantiate the expense and therefore she was allowed to write it off as a deduction. So thanks for base off the chest we love. If you are you have to do any cosmetic to your body that is going to help bring in more revenue. The IRS says it is deductible. I know. Just unbelievable, but it’s true. Next. Okay, let’s get back to the true and false. Can you write off a car as a business expense? True or False? Right in the chat real quick. Okay, false, false false. Somebody said I’m Daniella, their chat was disabled.
Unknown Speaker 20:33
I’ll try to enable that. Okay.
Speaker 1 20:36
False, false, false. Okay, false. Okay. So Daniela can we will reload the page? True? You can’t wait a minute, the slides that messed up? Okay, go back to that one. I don’t know what happened with the slide back. So go out to the trunk of the car one. So yes, people buy for cars to business expense. Yes, you can, um, as long as it is ordinary necessary for your business. But let me give you a key on this one. So the IRS recently expensive versus commissioned, it was a case that they heard over in June. They said the business expense, you can get anybody to get a car for your business. That’s no problem, the IRS, but can you write off as an expense. And so over the summer, there was a ruling by the IRS court that stated that the business expense business car expense has to be substantiated. And I talked about it earlier on. It’s like, you gotta make it make sense. So if you say you have a daycare? Would would they allow you to write off a bit? No, probably not. Because it’s not ordinary, say for your business. Now, if you had a daycare, and you bought like a passenger van, yes, you can write off the expense, it has to be substantiated. And so but then the IRS also said that if you use a personal guarantee to buy that business business, that car meaning that somehow he put your social security number now, and that car is showing up on your personal credit report, the IRS looks at it as a personal debt, not a business debt. So keep that in mind. And we can talk about that another time. More into like right now for business expense. But yes, you can write off a car as a business expense, if you substantiate it and as auditors. So for your business. Next slide. Just get to this one, I’m Daniela. Okay, can you deduct body oil true or false?
Speaker 1 22:40
I’ll give you some time to write that off to write it down. I got some true I got some true okay. Okay, okay. So I got some true Daniel, Can you reveal the answer? Possibly. Let me tell you why. So wherever versus the commissioner, so where was a body builder and this is an I learned I didn’t know that body does a requirement that they be ordered to show their muscles. But he was using gallons and gallons of body oil every year. The IRS first said no, you cannot do it and coy where I was like not only was he professional bodybuilder he modeled in like muscle magazine, and the war so like to show the definition of the muscles. Body Oil is a good way of showing that and that’s part of some of the requirements when you’re doing the scoring in bodybuilding. So he challenged at first I said no, you cannot write it off. They end up removing deduction he didn’t owe him because he went over the deficiency amount. And the IRS he came in and positioned himself to say hey, you know, this is a requirement even show evidence that it’s in the the judging criteria because of koi versus where whoever says the commissioner, body oil can be a write off if it is necessary for your business. Next slide. Okay, so back to the next slide. Go back on Memorial, Daniela. Okay, so the whole purpose of my here. So the whole purpose of this is I wanted you to see that when I talked about ordinary necessary, some of you all said false, you think in false because you would think in private like your business. But remember, that is ordinary necessary for your business. And so flour typically would not be considered a business deduction because we could typically use it for personal we could use it the bait to fry to make stuff. But if you’re a baker, or things like that, you’re going to need flour, right? So you got to remember again, all expenses are going to be ordinary necessary for your business. You’re going to have have what they call the burden of proof to prove that it is an expense. And so when you’re working with your CPA, your tax accountant or your bookkeeper to perfect pair for this, start thinking about that what expenses are necessary ordinary for your business? What can I, if I didn’t have this, can I still run my business, I just can’t think of like that, because I’m going to give you a little secret. A lot of times, when you go talk to a tax person, they’re not going to walk over, they’re not going to walk through this with you. They’re going to expect you to come they’re prepared with your list of expenses. They’re not going to sit there and be like, Oh, Tanisha, you’re missing stuff. No, this is why this training is so important. So now you can start thinking about, you know what, I need to think about what expenses that I have paid that are necessary for my business, so I can write it off. Because that’s not their job. If you want them to do that, they’re gonna charge you more per hour to do that. So that’s why I want you to be armed and informed so that when you when you’re ready to do your taxes this year, you can sit down thinking about expenses that are ordinary necessary to your business. Next slide. One is I want to talk about two is r&d credit. A lot of times business owners do not use this, they just don’t use it. And it’s like anytime you do anything research and development, you can write that off. If you’re experimenting, I’ve had clients this week talking about they were experimented on different parts that help with eczema, or emphysema, things like that. If you’re doing spending money on any research or excellent, you experimenting things like that, I have clients, I’ll always recommend them, if they’re going to be doing any type of plots that you put in your body in your mouth, I always recommend they go through product testing, send it to a lab. And that is what you do in the back. That’s an expense that you can write off on the r&d credit, that’s a credit you can get. But again, so you look at the um, how you can use it, your your gross receipts cannot be more than $5 million. It’s a five year tax period. And you cannot be read as a tax exempt organization means you can’t be a nonprofit. So that’s why I always encourage my clients to go get their products tested. Because one is it’s helpful for them make medicinal claims. But two, they can then try to use this r&d credit when they file their tax. Okay, this is very important know your deadlines. There’s several different deadlines that apply to every different type of business. So basically, if you have any 1090 knots, and this is important, because February one is coming from a friend, if you pay anybody over $600 last year, you need to file a 1099 to the IRS by February 1. And what you’re going to do is, you’re just going to report that you say you paid me $600. So you got to report to the IRS that you paid me definitely Magnus $600. So you’re going to give a copy of a 1099 to me, and then you’re going to file a 1099 in EC to the IRS. Right. There’s a lot of websites out there that you can do it to what did you do tonight now, because I filed tonight nine.com It’s going to cost like $12. But keep in mind, if you if you pay me over $600 You’re gonna have to file file a 1099. So that way I can claim it as income on my taxes. Now, if you miss the February deadline, let me just tell you something, the IRS charges you $50 late fee for each person every month. So like this figured out every 30 days that you didn’t turn it in. So the late fee is very great, where you could just pay that 1299 to a company to do it. So remind you if think about anybody you pay money over last year over $600 that they should get at 799 by February 1. So March 16. If you’re a partnership, or multi member, LLC, or SOC Corp, your tax filing date is due March 16. The reason why is that you don’t file these, these returns with your regular return. These are called separate entities. And so you’re either going to do a 1065 or you’re going to do 1124 is separate from what you would do with your 1040. Now everybody else is going to do April 15. When you file your regular personal tax return with your personal tax return, you want to include they call a Schedule C and then the Schedule C and it’s labeled profit and loss. And this is how you file your business tax return. If you’re a sole proprietor, or you are an LLC, Okay, this one we’re going to set out. So if you are nonprofit, you’re going to file your check your 990 on May 15. So it’s important not to take these deadlines lightly because at some point you’re going to be tricked or maybe charged a late fee. Even if you Oh say so it’s as if US you didn’t do it. You do it in June or July. You Oh, oh, they’re gonna still charge you interest in April. So you want to kind of try to make sure that you know your deadlines. If you file an extension, they usually give you a six month restriction to October. If you Oh, they’re gonna still go back to April, as far as interest Oh, so keep that in mind. And then it’s like, you know, 5% tax interest every month that you’re late. So think about if you didn’t do it in October, and it was due in April, they’re gonna go back and charge you those late those late fees, Daniela. Okay, so you want to pinpoint the right tax forms I talked about in the previous slide. So if you are a sole proprietor and unlimited clear, if your LLC per the IRS, you are still a sole proprietor, LLC is a disregarded entity with the with the IRS, meaning an LLC is just a state law on your state legislation. So every state has what they call a Limited Liability Act. That’s what that falls under, has nothing to do with the federal nothing to the IRS, with the IRS you either a sole proprietor, your partnership, your SOC Corp, or your nonprofit. So you will file a Schedule C. So how do you do provide your income you do they call it 799. And so that’s how you would support your income as a sole proprietor. If you are a corporation, you file a file 1120. If you are a partnership, or multi member LLC, you will do a form 1065 with a k one form. Next slide in yellow. Okay, so I talked about nonprofit if your nonprofit is a 990. And some people will still keep their LLC, but elected to be
Speaker 1 31:52
charged as an S Corp. and how they do it so they can make it so they can pay their self a salary. And so if you if your S corp election, you would file a Form 8832 to be classified as an S corp election, so that way you can pay yourself. Because remember, when you’re an LLC, you’re not allowed to pay yourself, because they call it double taxation, you’re already gonna be charged self employment tax, you don’t want have to dance around and play and pay income tax as well. And that’s like, and I can clarify in the q&a section. I’m just kind of given a rundown. But if you want me to clarify anything, drop your questions in the q&a, and I can elaborate a little bit more. So what you want to do now is if you have not prepared for your tax season, you want to start pulling your financial records, any profit and loss statement. So if you use like QuickBooks way, any type of financial system, they should be able to give you your profit and loss statement with a click of a button. Or if you have a bookkeeper, they try to give it to you, you want to also start looking at invoices and receipts. And let me tell you something, the biggest mistake I see is people’s not keeping their receipts. They’re just they’re just gonna go off of their business bank statement, and their business credit card statement. But I want you to tell you that when it comes to audit, bank and credit card statements is not going to suffice in the audit. Because the auditor is not gonna know what you bought. If you look at the bank statements just gonna say Walmart. They’re not gonna know what you bought from Walmart. For all they know, you could have bought groceries, you could have bought toys. They don’t know that it doesn’t say that you bought a computer or iPhone or things like that, or desk or lamp from Walmart, we’re just gonna say Walmart. So you’re gonna have to keep your receipts and it’s also the receipts are required for compliance. Suppose keep your receipts for three years right? Now, am I gonna give you a secret? Anything under $75 definitely not gonna care about it’s anything over $75. But that only that’s only when it comes to food, meals, gas and mileage, anything else? Any other expenses, you’re gonna have to justify any payroll of vendor payments. You, you have to report it, we talked about the 1099. So you want to make sure this is this that people are giving you the right forms as well as you give other people the right forms. bank and credit card statements I talked about a lot. They’re only good for reconciling your expenses at the month, but using it as receipts or for your expenses injections can cause you some headache down the line that you don’t want. So always keep your receipts. There’s different ways to do it. But yes, so next slide, Daniela so now it’s about receipts in the chat. quickly drop how you kept currently keep your receipts. Is it on your device? Is it some sort of box first pocket were made by box you have clients so they first drew up there? The first one that drawer system has boxes. Some people tell him he has received some people tell me in their kitchen you have a junk drawer nearby. The junk drawer is full of receipts so how do you keep your county keep it receipts you can drop it in the chat real quick. Okay. All right. So next slide and yellow. So what is the best way to keep receipts for me, I would say device. Because you don’t risk fading or losing, I’m losing it, you can always save it to the cloud. There’s different software out there you can do you can use to keep receipts. Or you could just snap on like lose your camera or snap the picture. And then you go, right. Reason why I don’t like the other ones because, as you know, like because it how many times you have gone to Walmart, and two days later received can’t read the receipt, is because some people used to call thermal printing with me is it’s going to fade, it’s gonna smear or lighting hits it. And so the best way to always keep your receipts is either scan them on your device, don’t put them in your pocket, don’t put them in your glove compartment. Because if they if they can’t read it, or doing an audit, they can’t read it, what’s going to happen, they’re going to remove that deduction, and you might end up owing. And so just try to get in best practice of doing this, of trying to take a picture of your receipt, scanning their schedule right now. Absolutely. To Have y’all seen this check. Shaquille O’Neal commercial, where he’s scanning receipts Epson makes a good receipt scanner as well. So cost you about three or $400. But there are receipt scanners, or your phone is free, just like you’re taking selfies and you you’re doing tic TOCs, whatever. Just take a picture of your of your receipt and keep it moving. Jama next slide. Okay, I’ve already told you the answer for this. I kind of skipped over it. But the answer is if you lose your receipt, your bank and credit card statements is good enough to the IRS Daniela move on. And it’s false, because as I talked about it, you have the burden of proof. A statement does not show what you actually purchase. For all we know you could build a pull chain. So no receipt could in the reverse of a deduction, which mean you can owe the IRS back. Next slide. However, this isn’t that they don’t tell you is the thing called the CO handbook. And I’m giving you a little secret jam here. So basically, it call hand challenged the Circuit Court of Appeals, even above the IRS, after they told him no, he went above and he appealed the decision to the to the Second Circuit Court of Appeals. Cole Han was traveling artists. And like a lot of us, I’m guilty of this too, I go to the gas station, I press for the receipt, I get off the street, and I forget the receipt, but I’m not gonna go back and get it. So same thing happens. And when you travel a lot, that’s when you really lose receipts. And so he challenged that he was like, it’s hard, I’m gonna vote all the time, I’m gone 20 days out of a month, he challenged it. So this is how the coal handbook came about. So let’s say about the coal hand rule, you can try to recreate the receipt, right. So I recommend googling last receipt affidavit. Some of you all are doing it now in your current nine to five, you know, you might have to do that when you lose every don’t can’t find a receipt. But under the cold hand rule, you can try to recreate the receipt. But it’s only applies to meals, mileage, gas travel, you cannot try to recreate a tax receipt, unless you go to app to Apple directly, they may get the receipt for you. But if you lost any type of receipt, you can do the under the call here and really try to recreate it. Now this way you can use your bank and credit card statements and say, Okay, I know on February 4, I went to Wendy’s. And I’m going to put on them as detailed as I can. That’s going to suffice in the audit, then you can challenge the you can save the call handle. So the lot of times they don’t tell you these things that just drive just gave you a gym that’s going to help you if you lose any those type of receipts, then yellow. So I’ve talked about before, how long should you keep receipts, three years. So there’s a publication 583 That is a good read because it breaks down everything I’m talking about today, and it’s the IRS puts it out. So three years to keep the receipts after three years you didn’t get it, you can tuck them away. And the reason why is three years because you can only be audited for three years unless they suspect fraud. So typically, audit can only go back three years. And so unless unless there’s fraud, so that’s why it’s a three year rule for receipts because the auditing is three years past can yellow. This is a good best practice because a lot of times if your memory is like my memory, I’m not gonna remember what I did. So on the left hand side, actually, I’m going to show you a receipt that I did. So I have lunch with Sabrina, and it was a PR meeting. This is what you want to kind of do. So when you if you’re just giving your receipts to a bookkeeper or virtual assistant, this is going to help them too. So you can also write on their app, this is best practice, write on a receipt, what who is legit yourself this would yourself? What was the purpose of the meeting? And what was the purpose of the travel? That way, when you give it to
Speaker 1 40:33
your bookkeeper, virtual system, your accountant, they can already see oh, this is gonna go into the PR category. Also, if you’re the audit, a lot of times you’re not gonna remember what happened three years ago. But if you vote on that receipt, it may remember it might trickle memory to an auditor, it’s like what’s this? Just $29? Oh, I remember I had meet with Sabrina, we talked about PR for this. And they’re going to put their hands on keep on going. So try to get into the best processes. And also it needs to be an itemized view. So on the left, you see that it breaks down what was bought, you know, we both had a fish sandwich chicken sandwich. You don’t we had we had fries. On the right hand side is what I typically see as a tax preparer as well is a person just keeps the credit part it doesn’t itemize what you bought. So try to keep in mind try to keep the itemized part, just having the slip that says you pay $29. Again, here’s another thing where the IRS is telling you, I don’t know what you bought, we know you went to Main Street restaurant, but we don’t know what you bought for us until we just told you you Discover card $29 Unless you kind of right on it. Sometimes I am guilty of that. I grabbed the wrong one, I grabbed that kind of thing. And I nearly tried to go and write on it what it was. Or I might go back to the waiter or waitress and say, Hey, I’m gonna do my itemized. Copy that Daniella. So again, always be prepared to prove your deductions. Next slide. So as you all probably heard, they had made this new rule last year, that if you use these third party companies cash app demo xhale. Pay Pal, that they were going to anything over 600 all they were going to do is going to send you a 10 99k Guess what they temporarily suspended that the Congress did because they say that this was a burden among small businesses. So now, what does it mean for you all it means that the requirement has been suspended doesn’t mean that they still can’t do it. It just saying that, that now they’re not bound by regulation to do it. So they still may do it. I know for one square is going to do it. Regardless, they just do a recall they’ve been doing it before the rules have changed. But keep in mind, it’s not a requirement for them to do it. But they still can do it. So keep in mind when you’re doing your tax returns, see if they’re going to log into your cash app, log into this and see if there is a 1099 that has been generated. Next slide. So upcoming changes to the tax law. So basically in December, the IRS up the standard mileage rate, which is now going to be 65.5 cents per mile. So if you’re creating mileage, meaning that you’re going on business, traveling business, you’re doing business ones business errands, you can deduct your mileage, and now they’ve increased it by three cents per mile. So now it’s 65.5 cents per mile. So keep that in mind when you’re doing your spreadsheet to get to your CPA or accountant or tax preparer. That is that you need to base it on the new mileage rate. Next slide. So all we say avoid common landmines. Remember, it’s business not personal, you won’t always remember your business expense. If it is personal, you cannot write it off. Set your structure from the start. So get prepared, like know what your structure is. If your LLC I ran down some of the requirements, some of the forms you need to know if you are a partnership, I ran that down if your SOC poor, so set your structure from the start. This is going to help you make your tax season go smoother and smoother, smoother every year where you’re gonna become the tax pro. And then when you go meet with your tax person, you are already going to be on it and quit because you’re going to you already know what you’re gonna need to be doing and pay your payroll tax properly. People always ask me, Should I pay quarterly or annually it’s really up to you. Just keep in mind that it’s always going to be interest attached to and so some people just want to pre pay their taxes. What happens Do you pay over your course you’re getting a refund, but if you are up payroll taxes, that means that you’d have employees, or if your SOC Corp or your the S corp election that you’re paying yourself, make sure that you pay your payroll taxes properly, because the fines and fees are very heavy on this subject. Next. So I want to kind of really quickly go over the Schedule C cheat sheet, because most of our clients are LLC. And so what you want to keep in mind, as you’re moving toward this tax season is start thinking about your goods and services that you have that you made a profit from, that’s going to be your income. So under the Schedule C, the first section is going to be your profit. That’s it, you made even owner’s contribution. If you put money into your business, that’s considered income, you mark it as a contribution. So anything goods and services in that it made you money that you put into your bank account is your income, that’s gonna be your profit. The next section of a Schedule C is going to be your loss, your loss is not going to be your loss. But it was mine, it was money that you had to put out from your what you gain to buying stuff. So for instance, if you bought if you bought a computer, you want food office supplies, printer, all those expenses. And what you’re going to do is get to that bottom number, which is mine 31, which is going to be your net profit. So always a member is going to be your income minus expenses equal your net profit. So if your net profit is a negative, that’s okay. Because what’s going to happen is that that net expenses is going to reflect on your 1040. So if you’re making 80,000, if you start your nine to five, you make $80,000 a year again, if you have a negative 10,000, you’re gonna be taxed at 70,000 versus 80. But let’s, let’s reverse it, your line 31, you got 7000, that 10,000 is gonna be added to that 80,009, you’re gonna be done, you’ll be taxed at 90,000 versus 80. This is why I said it’s so important to try to get as much deductions as possible, unless you really try to show an income. And that’s fine too. But just keep in mind whatever is on line 31 is going to have an effect on your 1040 adjusted adjusted income line. So you want to get in best practice of keeping a monthly cash flow forecast. So that way, that’s how you stay organized. If you do a month by month, I don’t want you to be wandering around. Chase like you know what your hair cut like a chicken, trying to get this done before the tax season before April 15 Unless you’re going to file an extension. So a monthly cash flow forecast is going to show you what you bought in every month and what you spent out every month to get that bottom line so you see where my arrow is. So if you look at this cash flow statement, it shows $108,000. But guess what, I had over 112,000 off the expenses. So I’m currently going to be in the hole. That’s how you can know you can always check stuff before you get to December to try to fix some things before December come around. Because once December 31 kind of come around, you can’t really make any adjustments because that’s the kind of cut off cut off for 2023 which was December 31. So this I’m gonna go really quickly, I want to really get into q&a. I’m genuinely trying to go through this fast I want to give you examples of things that you can write off in your home office. Next slide. This attention why when you bomb traveling, always say when you go to the gas station, pick up sit there and reflect what can I write off gas view. I have insurance on my car I have lease payments. The ignore the man has told you to malloc and free so I gotta reflect this in an upcoming PowerPoint. Repairs tune up and tires. I will suggest keep on mileage log in your car if you constantly on business travel a lot. Like if you’re a realtor. You a painter you a plumber or whatever you need to keep a mileage log in your car is no set. mileage log to the address they just want to detail reporting of your mileage you want to claim it. Next slide. When you traveling plane ticket baggage fees, next slide and yellow hotel Airbnb they treat them the same as our time people stay in the Airbnb they treat Airbnb the same as a hotel expenses. So that bill you get from the the Hilton in New York State can be deduction. This is the one thing people don’t know tips for services. Anytime you tip on business, you can write that off. So if I say you know you, you have the cat, I’ll give you $5 You’re my luggage I’ll give you $5 So keep a record of your tip because tips are one thing Iris RSS that you can write off. And a lot of times people don’t know This, but yes, anytime you tip somebody on business travel, just keep alive so you can write it off. Know these resources, I talked about these resources in previous slides. If you need a copy of that, you can just always email me. And then I can send them to you. But you want to know it breaks down everything I’m talking about, you know, record keeping business expenses, how to use your home office. Next slide.
Speaker 1 50:28
You survive. I know, it was a lot of information. I was trying to get through it as fast as I can, because I really wanted to get into the q&a. But you did survive. And we’re at the end. So Daniella, we can actually open up for q&a. Yes, so I have
Speaker 2 50:46
it on. I know we’ve had a few questions since the beginning. So I’m just going to okay, what should the first one I have a question about kind of LLC versus cop? Corporations. When I guess Melanie sullen Molina, you can ask your question live if you want to or you can be in chat. I was able to enable the chat as well.
Unknown Speaker 51:14
Yes, she has her hands waist.
Speaker 1 51:24
Milena, you can unmute and ask she she asked a question. She says we have one car and my husband I write off the same car for different businesses. This is a really good question. Molina. So yes, you can, you’re going to have to write off what percentage you use for business and what percentage you use for personal or both. So, so take take 100%. So firstly, to find out how much percent use for business, so say 5050? Did your husband use 25% and use 25%. And here’s the thing is because you are married, this is I’m assuming you’re filing married filing jointly. So you’re going to use the same tax return anyway, you will have different schedules sees because of different businesses. So what you’re gonna really have to do is figure out your percentage for business use, and his percentage of business use. That’s how it works. And then what percentage for personal so maybe you say, you know, it’s 5050? So out of that 50%? How much percent did you use? And then how much 50% Pay he used? I hope that makes sense. For example, you may only you may have used the vehicle 30% for business, but he may use it for 20%. And the other 50% was personal. I hope that makes sense. But yes, you can use it if you have one car, you can both write it off for businesses, because you all use different percentage of the vehicle for them before your business. Thank you, Stephanie. Oh, women got it horrible quick. That’s your mileage. Now? We’re talking about the purchase of a vehicle, right? That’s a little bit different. So I don’t know, I don’t know her situation, Daniela, I wanted to learn more about it. Because if you’re trying to write the purchase of the vehicle, was it in? Was it purchased jointly? Or was it purchased under one person? So I need a little bit more before? If that’s if that’s part of the question, I believe I will need a little bit more. And millionaire you
Speaker 2 53:17
can always email us at You can email Stephanie at legit my business. Or you can just email me or go to our website and schedule a one on one session with Stephanie and kind of go through that as well. I will put the email in the chat shortly. Stacy as well will be able to rewatch this even for a short time. Definitely I will be sending the videos, the webinar video to you guys. After the session. Lizzie asks, Are all these quarterly dates for any expenses or income from 2022? Or is it ongoing in 2023?
Speaker 1 53:58
The dates are ongoing, it’s going to change based on a holiday. So if it’s something that’s due on a holiday, it’s going to be due the next day. But typically the when the IRS dates are the same, they don’t change unless if it falls on a holiday. It could be over falls on a Saturday. It could be Tuesday because typically, if a holiday falls on a Saturday, Monday becomes the holiday and it’s Tuesday, but typically it’s the same day depending on if it’s a holiday or not. Thank you.
Speaker 2 54:27
Thank you. Kelly asks, What if you started your company in the same year you work for another company and you will receive a W two from them? Do you need to file a 1040 or sorry, an and eight a 32 form?
Speaker 1 54:44
So I’m assuming she started at 32. She has the S corp election. You still have to file a 1040 because you have a W two. If you don’t file a tin foil you get w two you don’t get that letter from the IRS saying that you failed to file to claim income. So if you got a W too, you still gotta file a 1040. Regardless, the template is your personal. Now, if you’re doing an 83 to again, I’m assuming that you are asking for because you mentioned that form, you still have to file that separately. And that’s going to be the 1120 s form that you’ve got to fill out. But I’m not knowing that the total situation here, I don’t know what business entity that Katie has. But yes, the answer the first part A W two, you’re gonna have to fill out the 1040. Because if not, the W two is gonna, it’s gonna be reflected on your wage and income transcript, the IRS, which you can always pull up every July. If that shows up, you trust and believe you’ll get that white envelope with a window on it. And from the IRS, they’re gonna say, Hey, Katie, you failed to report income, guess what we’re going to include it, they’re going to give you their estimation, and telling you that two weeks to respond. So you don’t want that issue. So remember, if you have a W two, that company has reported income to the IRS, that means you have to do that balance and 40. Thank you, Stephanie.
Speaker 2 56:06
Lucas asked, please clarify if the car being written off should be in company names. Okay. Hi, Kia,
Speaker 1 56:13
how are you? So that means Okay, so if you the car does not have to be in the company name to be written off. But it has to be 100% business use, right. But keep in mind, I talked about personal guarantee. So if you personally guarantee that car, you can’t write it off at all. That means if you use your social security number, and the car is being reported on your personal what I mean by Equifax, Experian, and Transunion, the IRS made a ruling a year or so ago that says that that’s to fit a personal guarantee. In their eyes, it’s a person. So But again, as I showed you, in the true or false, anything can be challenged, right? As long as you can substantiate and say, Hey, yes, it’s in my business name. So you’re gonna have to have the burden of proof to show that that car was 100% for business. Meaning you got to show like, like, okay, maybe some travel receipts, maybe you might have, you might have had in your personal name. But when you went to Jiffy Lube, you put your business name down for the receipt. So I guess I proved to you in previous slides, that anything can be challenged with the IRS, you have the burden of proof. So even though you can say it’s my personal name, you’re gonna have to unequivocally show 100%, that that car was was 100% from the business. And then again, you have the burden of proof to pull that so you got to pull out for all kinds of tricks out of the hat to pull that off. But keep that in mind when you if it’s not in your business name, if that makes sense. Thank
Speaker 2 57:58
you, we have a question again from Katie says you only had to send vendor 1099 forms if you paid them 600? Or more correct?
Speaker 1 58:07
That’s correct. Yes, 600 or more, this is for your vendor payments. So like, if you pay a virtual assistant, a bookkeeper, lets us focus on the 1099. Hopefully, you first heard from the W nine first, as you need to collect their information. So if you have not gotten the W nine, you can just send it to him now. So you can hire you because you’re gonna need to get the business name in the in the EIN number. So typically, what you want to do best practices that if you have anybody that you’re going to pay over $600, bookkeeper, Assistant virtual assistant is that whatever you make sure you get the W nine first because that W nine is going to be the capture their business name in their EIN number, or they’re going to let you use their social security number you need to collect so those things so hopefully you have that if don’t in order to attend it. Now you have to go back to that vendor and say hey, I need your information.
Speaker 2 59:01
Next question from Margie. Can you Linda slash vide of the expenses charged by services my square the percentage of each transaction?
Speaker 1 59:14
Oh no, you can also if this if this if using square for totally business that percentage know that 2.29 or whatever it is, you write the whole thing off? If you only use a square for business, that’s 100% deduction. Does that make sense? Now of using squares that like with your with other people know you got to figure out what percentage is for business. But yes, interest bank charges, monthly maintenance fees. Typically all that’s 100% Did you just you write the whole the whole percent thing if it’s one a business account, so if you use a square foot total 90% business that never reporting you’ll find out like okay, I gave were $35 Last year in transaction fees, then when you go to file your taxes $35, same. Great.
Speaker 2 1:00:07
Next question for Melina and Sami we are over well, you know, we went a little bit over, but I just want to make sure we answer this question. What is more beneficial LLC or Corp, a single member LLC person case? In other words, at what point is it more financially beneficial for me to switch over to?
Speaker 1 1:00:28
Well, again, this is something is based on your needs and what your goals are. One thing I can tell you was as an LLC, you can’t take a salary. Right? If you’re if you want to take a salary you will do you would definitely want to move to a corporation status. That’s the first part. So a lot of people want to show income, whether because it’s really hard to get things like, like buy real estate, or buy a car if you don’t have income? If not, they don’t want to see like six months of bank statements and things like that. So it depends on your goals, or what you’re trying to do in the future. Now, at what point is it financially beneficial for you switch to a core? Well, it’s up to you, you know, I wouldn’t I was I was like down the pros and cons of both. One thing is about being a corporation you got to know is, it’s more paperwork, you’re expected to have shareholders, you’re expected to have board meetings, a corporation kid, there’s a lot to do with it. When with the LLC, you have more autonomy, how you spend the money. As an LLC, you can always just draw out your money. No, no questions asked you to take out when you want to write, but a corporation, you have to counsel everything, it’s a little bit more, it’s a little bit more heavy on the requirements. Even on the state side, you just look at the state legislation. So LLC is under the Limited Liability Act. But an S Corp is under Subchapter S of a Corporation Act. And under that it tells you record keeping the minute she does have certain amount of shareholders. So I tell people, it’s really up to you and how much work you want to do. So we have some amazing companies out here that are still s doesn’t still LLC, Amazon, Sony. They’re all LLCs last time, and they do they do they call series LLC, they have different divisions under there. But it really depends on you. I can tell you now, if you’re not Google’s record keeping, you’re not Google’s compliance. You don’t want to do minutes, shareholder meetings, then you may not want to go to the S Corp. Now, if you want to pay yourself a salary, and things like that, you may move to the S Corp. So it really depends on your individual needs and goals for your business. Thank you, Stephanie. Next
Unknown Speaker 1:02:43
question is,
Speaker 1 1:02:44
are there any free resources where I can generate a 1099 for vendors? Or do you know if that service is included in QuickBooks is included in QuickBooks is included in square, square payroll does it I mentioned earlier as a system call, if you go with like 1099 forms.com, it doesn’t charge you $12 per vendor or something like that. There are different options you can use, you can actually do it manually if you want, where you go, go to irs.com Get the form. It’s a PDF fillable. And then you can mail it to the IRS and that’s free. Just I mean, just types of arms, postage, I don’t know your budget to recommend one thing or other, um, you set free so for me free meaning it’s doable paper is to print go to irs.com go to get the tonight noun form, fill it out and just mail it to the IRS. That’s the free version. Or this the cheaper than QuickBooks I mentioned. It’s called because like 1099 forms.com, or some like that, and they charge like $4 per vendor, and they and they actually put it $12 They send the form to the IRS for you as well. So those are just some different options for you. Um, but yes, QuickBooks way, Gus. Zero, all of them have that functionality to do it, but you got to pay for it.
Speaker 2 1:04:06
Okay, thank you, Stephanie. Next question, and I’m just making one. I have a single member LLC, I would have a a W two for the job for the most of 2022 by the end of September. What is it that you mentioned about income? I didn’t quite catch it. I access my LLC will be my sole source of income in 2020.
Speaker 1 1:04:28
Hey, Carolyn, Karen was one of my clients. So Carolyn, tell us so basically, you know, you’re gonna have to file that the W two because you gotta remember I talked about somebody else asked that question above a W two is going to be reported to the IRS. So you are going to have to claim that as income, right. And so for next year, Corona, you have to work on that and one of our sessions is to talk about you know, there was self reporting. So when you when you when you are straightforward time entrepreneur, you have to sell for four on your schedule C. And that is, so the first line of your tinfoil is gonna be blank because the first time monofin, fourth is w two, if once you become full entrepreneur, you don’t worry about that it’s like in the middle of the same for is when you input your self employment income. So you still gonna have to do a 1040, even with full time entrepreneur, is that the line one would ask for a W two income, it’s going to be blank, you’re only gonna fill a line that says other income.
Speaker 2 1:05:37
Net next question is if I have a residential rental business and working also part time on K 12 teaching, do I how do I do my taxes? Is there a counselor I can talk
Speaker 1 1:05:49
to him? Yes, it’s anonymous. I don’t know who this person is. You can you can schedule Danya. Can you provide the information?
Speaker 2 1:05:56
Yes. So I did put on our website on the chat. And so you can just register a DC wbc.org. And you can schedule a session with Stephanie, and she can walk you through that? Next question is if I started my business in January 2023, do I start paying quarterly on February 1 2020 to 23 or March 16 of this year? So
Speaker 1 1:06:24
let’s see this was a really painless. Um, this is a really good question. Because you just started your business in January 2023. So what are you estimating? I would say, I always tell my clients wait until the second quarter, to see how well you’re doing. Because if you just started your business, you don’t know what you really gonna be making it right. So this is kind of a tough situation, because you just started and we only insipid 18 days into January. Unless you have a really good planned out budget. I will say that, but I don’t understand like, you know what you mean by paying your quarterly taxes? Because you didn’t do that you haven’t made any money? And are you basing your quarterly taxes on pre on assumed income coming in? So let’s say in our session, we can talk a little bit you schedule a session. Let’s talk a bit more about this because I want to understand what your goal for 224 2023 is. Great.
Speaker 2 1:07:29
Next question from Tunisia is I used a Shopify vendor located in Canada, when I send them a nine, W nine. So feel now to prepare the 1099 they informed me that they don’t feel now why is because they are not a US company?
Unknown Speaker 1:07:48
That’s correct. That’s correct.
Unknown Speaker 1:07:51
Should I agree? Yeah. So you
Speaker 1 1:07:53
don’t, you don’t. So basically, you’re gonna have to date us for the record as a business expense. So what you would do is the amount of money you paid for the Shopify vendor, you would just record it as a business expense. They’re not by law required to claim it as income. So what you want to do is under inventory on the category inventories where you want to drop this in, and just and then and so because it’s an international, we don’t have international trade agreement with Canada and things like that. So what you want to do is just file it as an expense under your on your expenses. And then I will even create a chart of account. If you don’t have one called inventory, and then drop it, because I’m assuming that you say Shopify vendor is for inventory.
Speaker 2 1:08:45
Last two question. I’m not quite sure what this person asks who in 4d,
Speaker 1 1:08:53
I got it. So so good. Yeah. So basically, if you have a W two, you got to follow Tim for it. As if you don’t, every jank every July, they get the wage and income report to the IRS. And what happens is October comes in you they found in October, they start sending these calls statutory notice of deficiency. And so what’s going to happen is because this is really definitely having to July turning all income reports to the IRS. That’s why if you look at your wage and earning transcript report right now it’s blank. And so if somebody reports a W two to the IRS and you didn’t report it, trust and believe in October, you don’t get this letter of the statutory letter cp 575. notice from the IRS that says, Hey, you didn’t you fail to file the W two. So always remember, if you get a W two, you’re gonna have to file a 1040 because that means the other party has already sent the income to the IRS.
Speaker 2 1:09:54
Thank you, Stephanie. Last question, Who is responsible if the LLC is being sued? Is it The owner or the LLC,
Speaker 1 1:10:01
the LLC. Now, let me backtrack that quick, Daniela, real quick independence. Let me let me tell you why. It depends if you have done your proper maintenance on your LLC. Meaning is, if your LLC is understanding, you had a separate bank account, you had a sued you treat the LLC like a business than the LLC is getting sued, you’re going to be summoned as a, as a, as a officer of the LLC, or member of the LLC, but typically, it’s going to be the LLC. Now, let me tell you what happens if your LLC the time you’ve been sued, and you are not in good standing with your LLC, you as the owner will be sued because you cannot slash the LLC back because it was not the same. So keep that in mind that if you did not do your annual fee. In, for instance, in Maryland, other states is every year, DC is every two years after the first year. So if your LLC is not just standing, you as the owner are going to be sue because you were we weren’t in good standing, so they can’t sue the LLC. That’s when that’s why they call it limited liability. Because there’s there’s a there’s a thin line we have to draw, right. And so if your LLC is not understanding, then you’re fine. But they go and they go to file a lawsuit and they realize that you’re not defending your LLC means does not exist anymore. You’re not even an LLC, because you’re not understanding the need to talk to the owner.
Speaker 2 1:11:37
Good. That’s that was all the questions we had for today. Again, if you just want to follow up with Stephanie, you want a one on one session with her to kind of go through some of these, you can go to our website at DC WBC dot o RG, you register for a session if you’re having any issues, you can just email me at DD J iogn@nclc.org. Or you can email us at info at DC WBC dot o RG. And we will be able to follow up with you as well. Thank you so much for for sticking with us. Like standing with us. Thank you, Stephanie force, so much information. And I really look forward to people reaching out to you as well to kind of get more in our knowledge towards resources as it relates to tax planning. Thank you so much and have a
Speaker 1 1:12:35
say thank you all and that you know, I’m saying that’s what my notes look like this. So I really wanted to make sure I get this done because tax season is going to open up next week. And so I didn’t want to miss this. But yes, you know, somebody wants you I hope you got a lot out of it. I know I’ve ran through a really quick because I’m not gonna be selling good but I didn’t want you all missed opportunity to have this session. Thank you, Stephanie.
Unknown Speaker 1:13:01
You have a wonderful day everyone.
Unknown Speaker 1:13:03
Bye
