{"id":4577,"date":"2021-02-12T06:10:06","date_gmt":"2021-02-12T06:10:06","guid":{"rendered":"http:\/\/eliteactax.com\/?page_id=4577"},"modified":"2025-08-06T11:19:02","modified_gmt":"2025-08-06T11:19:02","slug":"frequently-asked-questions","status":"publish","type":"page","link":"https:\/\/development.zerosoft.in\/eliteactax.com\/resources\/frequently-asked-questions\/","title":{"rendered":"Frequently Asked Questions"},"content":{"rendered":"\t\t
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Frequently Asked Questions<\/span><\/h2>\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t
\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/i><\/span>\n\t\t\t\t\t\t\t\t<\/i><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\t\t\tWHAT ARE BUSINESS ENTITIES?<\/a>\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t

Business entities are organizations formed to conduct business or engage in a trade. There are multiple business entity types, including corporations (C-Corporations and S-Corporations), limited liability companies (LLCs), partnerships (general partnerships, limited liability limited partnerships, and limited partnerships), and sole proprietorships.<\/p><\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t

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\n\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/i><\/span>\n\t\t\t\t\t\t\t\t<\/i><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\t\t\tARE MEDICAL BILLS TAX DEDUCTIBLE?<\/a>\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t

Medical bills are tax-deductible if the taxpayer itemizes and does not elect to take the standard the deduction. In 2019, the IRS allowed all taxpayers to deduct the total qualified unreimbursed medical care expenses for the year that exceeds 7.5% of their adjusted gross income. Beginning in 2020, the threshold amount increases to 10% of Adjusted Gross Income (AGI).<\/p><\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t

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\n\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/i><\/span>\n\t\t\t\t\t\t\t\t<\/i><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\t\t\tCAN YOU PAY YOURSELF A SALARY IN A C-CORP?<\/a>\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t

Officers of corporations can receive payment in the form of a salary. Shareholders that are employees can also receive a salary for their work.<\/p>

Like officers in C-Corps, the salary received must be reasonable and not disguised as other forms of assets or dividends.\u00a0<\/p>

In either case, wages paid as a salary can\u2019t exceed the amount that someone outside of the C-Corp will receive as a wage. If so, there can be problems that violate reasonable compensation.<\/p>

If the IRS determines that you receive an excessive amount of income, it can administer a reasonable compensation test. This can result in the excess salary paid to officers and shareholders converted to dividends that will experience double taxation.<\/p><\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t

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\n\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/i><\/span>\n\t\t\t\t\t\t\t\t<\/i><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\t\t\tDO ACCOUNTANTS HANDLE PAYROLL?<\/a>\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t

Accountants assist clients in the process of setting up the payroll with the respective states. Once completed, there are specific quarterly and yearly forms that need to be filed in order to stay compliant. The accountant will assess the client of any changes and timely file all required forms on a timely basis.<\/p><\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t

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\n\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/i><\/span>\n\t\t\t\t\t\t\t\t<\/i><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\t\t\tDO I HAVE TO FILE ESTIMATED TAXES?<\/a>\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t

The need to make estimated tax payments is solely based on the taxpayer facts and circumstances. If your income is entirely comprised of wages, there will be withholding taxes taken out on your wages, so there should be no need to make quarterly estimated tax payments.<\/p>

If there is material income from other sources and no withholding taxes are taken out, then the need to make estimated tax payments has arisen. Tax projections can be prepared to determine the level of estimated taxes that are necessary for you to make.<\/p>

The quarterly estimated tax payment dates are April 15th, June 15th, September 15th and January 15th of the succeeding calendar year.<\/p><\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t

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\n\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/i><\/span>\n\t\t\t\t\t\t\t\t<\/i><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\t\t\tDO I NEED TO DECLARE MY ENTITY WITHIN 75 DAYS?<\/a>\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t

Insofar as the use of the term \u201cdeclare my entity\u201d, it is assumed you are referring to the filing of an S corporation election or, a C corporation election. Generally speaking, there is a seventy-five day rule that applies to each tax election.<\/p>

If you want the S -election to be effective from the date the entity was formed (entities are formed at the state level either by filing LLC Articles of Organization and corporate Articles of Incorporation), then you have 75 days from the date of formation to file the appropriate Federal election form.<\/p>

There is late filing relief available for both elections. There are IRS Revenue Procedures issued to cover the requirements for late filing relief. Revenue Proclamation 2013-30 and 2009-41 deal with the S-election and the C election respectively.<\/p><\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t

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\n\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/i><\/span>\n\t\t\t\t\t\t\t\t<\/i><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\t\t\tDO SMALL BUSINESSES NEED A WEBSITE?<\/a>\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t

While it\u2019s not a requirement to have a website for your business, you\u2019ll benefit from having a website for several reasons.\u00a0<\/p>

Small businesses with websites benefit from transparency. Having a website can allow you to add more information about your business, its history, and what you\u2019re trying to advertise.\u00a0\u00a0<\/p>

If you\u2019re willing to invest in SEO, your website could potentially reach a much wider audience than you would if you didn\u2019t use one.\u00a0<\/p>

A small business website will also help owners create another method of sales. If your small business would like for customers to contact you, having a website will help you. It will also facilitate advertising your small business products.<\/p><\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t

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\n\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/i><\/span>\n\t\t\t\t\t\t\t\t<\/i><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\t\t\tHOW AND WHERE DO I SEND AN INVOICE?<\/a>\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t

Invoicing can be done via email or, as an additional step, can also be mailed to the specific individual or company department responsible for the payment of all vendors. Of course, this will depend on the size of your client.<\/p>

Some additional tips:<\/p>

  1. Call after you\u2019ve sent your first bill.<\/li>
  2. Check they got your invoice and they understand what it\u2019s for.<\/li>
  3. Send your invoice in an un-editable format. Frauds have intercepted emailed invoices and added their bank account to the payment details.<\/li><\/ol>

    Take your billing completely online, as opposed to mailing invoices.<\/p>

    Whatever procedures one may employ, take into account that the goal is to timely bill customers or clients and collect the money due to your company certainly within 60-90 days.
    Before sending an invoice, double-check all the information to ensure it\u2019s correct and clear. Let your client know how to make a payment and the due date. Make sure you send out the invoice on time. If you mail the invoice, ensure that your client\u2019s correct address is on file. If you email the invoice, include a hyperlink to the payment system. This makes the process as easy as possible.<\/p><\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t

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    \n\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/i><\/span>\n\t\t\t\t\t\t\t\t<\/i><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\t\t\tHOW DO I CALCULATE CASH FLOW?<\/a>\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t

    You can calculate cash flow in three ways:\u00a0<\/p>