IRS Code 162: What Is an Ordinary and Necessary Business Expense?
Amy Northard, CPA – The accountant for creatives
by Amy Northard, CPA
1w ago
One of the most litigated tax issues every year is business expense deductions related to tax code 162(a). In today’s post, I’m breaking down everything you need to know about code 162(a) so that you can follow the letter of the law and keep on deducting those business expenses like the boss that you are. What is IRS Code 162? The Internal Revenue Code (IRC) are the laws the Internal Revenue Service (IRS) applies when collecting federal taxes. IRC section 162(a) is the law that deals with business deductions for expenses that are deemed ordinary and necessary in a trade or business. Specifical ..read more
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How Do I Live Off Just Dividends?
Amy Northard, CPA – The accountant for creatives
by Amy Northard, CPA
3w ago
Living solely off income generated by money you already have is an exciting and attractive idea. But can it really be done? Yep! In today’s post, I’ll explain the steps you can take to live off dividends. What are dividends? Before we get to how you can live off dividends, we need to address what dividends are. Basically, when you buy stock in a publicly-traded company, you become a shareholder in that company. If that company has profits or earnings, it can choose to distribute those earnings to its shareholders. When the money is distributed to you, the shareholder, those are called dividend ..read more
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Rental Property and the 199A Deduction
Amy Northard, CPA – The accountant for creatives
by Amy Northard, CPA
1M ago
If you have income from rental property, then today’s post is for you! I’m breaking down everything you need to know about the Section 199A rental property deduction, including how you can use it to save big on taxes. What is the Section 199A deduction? When the Tax Cuts and Job Acts (TCJA) was passed in 2017, it created the Section 199A deduction, which is also known as the Qualified Business Income (QBI) deduction. This deduction allows eligible taxpayers to deduct up to 20% of their QBI from a pass-through entity like an S-Corporation or limited liability company (LLC). What types of busine ..read more
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Can I Put Unused 529 Money into a Retirement Account?
Amy Northard, CPA – The accountant for creatives
by Amy Northard, CPA
1M ago
Starting in 2024, qualified unused money in long-held 529 plans can be rolled over into a Roth IRA without incurring tax penalties. That’s great news! Or is it? In today’s post, I’ll run through the details, pros, and cons of the new 529 plan rollover rules. What are the new 529 plan rollover rules? The Secure 2.0 Act, which was signed into law in 2022, created new rules to allow unused money from a 529 account to be rolled over into a Roth IRA without incurring tax penalties. These new rules went into effect January 1, 2024. The idea behind this is that if people know they won’t incur tax pen ..read more
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Can My Business Deduct Meals and Entertainment Expenses?
Amy Northard, CPA – The accountant for creatives
by Amy Northard, CPA
2M ago
A business meeting is always more fun when there’s a latte and scone involved. But is that business meal tax deductible? And what about deducting those yummy appetizers you purchased for the employee party? In today’s post, I’ll help you suss out which business and entertainment expenses are tax deductible. Are business meals and entertainment deductions different for tax year 2023? I want to make sure I start this post by explaining what went down (or up) when it comes to meal and entertainment expense deductions in recent years. Basically, at the very end of 2020, the Consolidated Appropriat ..read more
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Are Stock Certificates Required for S-Corporations?
Amy Northard, CPA – The accountant for creatives
by Amy Northard, CPA
2M ago
Congrats on setting up an S-Corporation for your business! Many of my clients with new S-Corporations often ask me if stock certificates are required for their business. If you’re also wondering about this requirement, come along as I explain everything you need to know about stock certificates for S-Corporations. What are stock certificates? Let’s start with the basics and define what stock certificates are. In the past, stock certificates were physical documents that showed who held ownership in a corporation. These certificates usually included details about each shareholder, such as their ..read more
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How to Change Accounting Methods Using IRS Form 3115
Amy Northard, CPA – The accountant for creatives
by Amy Northard, CPA
2M ago
Most businesses are allowed to choose either the accrual accounting method or the cash accounting method (or a combo of the two) as long as the Internal Revenue Service (IRS) knows ahead of time which one they’re using. If your business wants to change your accounting method after you’re already in business, you’ll use IRS Form 3115 to get that done. In today’s post, I’ll walk you through everything you need to know about how to change accounting methods using IRS Form 3115. What is the difference between accrual and cash basis accounting methods? In a nutshell, the difference between the two ..read more
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How Much Should I Contribute to My 401(k)?
Amy Northard, CPA – The accountant for creatives
by Amy Northard, CPA
2M ago
Contributing to your 401(k) is a smart financial move that can set you on a path toward a secure future. But should or could you contribute your entire paycheck or salary to your 401(k)? In today’s post, I’ll explain some factors to consider if you’re thinking about contributing your entire paycheck into your 401(k). What is a 401(k)? Before we get started, I first want to define a 401(k). A 401(k) is a type of retirement savings plan that is offered by many employers. When you contribute to your 401(k), you’re contributing a portion of your salary to help save for your future. The money you c ..read more
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Free Meeting Minutes and Bylaw Templates for S-Corporations
Amy Northard, CPA – The accountant for creatives
by Amy Northard, CPA
2M ago
My S-Corporation clients often ask me questions about what they need to do to meet requirements for their board of directors, annual meeting minutes, and bylaws. In today’s post, not only will I fill you in on everything you need to know, but I’m even providing some free templates to make creating bylaws and meeting minutes a breeze! Does an S-Corporation have to have a board of directors? If you’ve chosen an S-Corporation as your business structure, then hopefully you already know that you must have a board of directors. You should also know that the board must hold “regular meetings” with re ..read more
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How Hiring Bloggers, Affiliate Marketers, and Social Influencers Can Create Sales Tax Nexus
Amy Northard, CPA – The accountant for creatives
by Amy Northard, CPA
3M ago
Having a presence on the web usually equates to more customers and more money, so of course it makes sense for small businesses to hire bloggers and other influencers to promote their products to a wider audience. However, while this marketing strategy can pay off big time, it can also come with unexpected sales tax consequences. In today’s post, I’ll explain how hiring a blogger to promote a product can create sales tax nexus and why that matters to your business. What is sales tax nexus? When you hear someone say, “that will give you sales tax nexus,” you might be thinking that sounds like a ..read more
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