Tax Facts

Information to help individuals and small business navigate our complex Tax Laws. Not to be construed as tax advice. Contact your hired tax advisor for your specific tax situation and advice.

Florida 2016 Tax Extension Filers and Hurricane Irma


If you are living in Florida in any area designated by the FEMA as qualifying for either individual assistance or public assistance from Hurricane Irma, and you filed an extension for your 2016 individual or corporate tax return, the IRS has announced an additional extension for you. Taxpayers with valid extensions that normally run out on October 16, 2017 and businesses with extensions that ran out on September 15, 2017 will now have until January 31, 2018 to file returns.

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Defining a Long-Term Asset


Our small business clients often ask the difference between a long and short term asset - especially with regard to deduction and depreciation of that asset. We'll define a Long-Term Asset in this post.

The main distinction is to first ask the question: how long will this asset have a useful life in the business you are operating. So, don't get this confused with its actual physical life. The IRS generally sets the rules on what is reasonably expected to be the useful life of a particular long-term asset.

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S Corporation Officer - Employee

Small business owners who have elected to be taxed as an S corporation should be aware of and understand the law regarding corporate officers who perform services. By law, officers of corporations are employees for employment tax purposes and their compensation is considered wages. An S corporation with a single member is clearly an employee, since in order for the corporation to exist, some work had to be performed and it would be provided by that single member.

Regarding the law itself, the Internal Revenue Code does establish that a corporate officer is an employee of the corporation for federal employment tax purposes. IRC section 3121(d)(1), which is a chapter of the code on Employees, specifically states "For purposes of this chapter, the term 'employee' means any officer of a corporation..." Additionally, Code Sections 3306(i) and 3401(c) specifically define officers of corporations as employees for FICA (Social Security and Medicare), FUTA (Unemployment), and federal income tax withholding purposes.

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S Corporation Compensation and Healthcare Insurance Deductions

Health and accident insurance premiums that are paid for the greater than 2% shareholder-employees of S Corporations are deductible by the S Corp but they are also reportable as wages on the shareholder-employees' W-2s.  So, they are reported in Box 1 of the W-2 and are therefore subject to federal income tax withholding for the shareholder-employee.  However, they are not subject to the FICA taxes or FUTA tax and therefore should not be included in Boxes 3 and 5 of the shareholder-employee's W-2.

 There are some key issues that your tax advisor should be looking out for:

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