Rives CPA worldwide clients

Change in process to obtain an EIN affects non-residents

IRS news release IR-2019-58 announced a change in procedures for obtaining an Employer Identification Number (EIN )for a US business entity.  This will impact non-residents with US based entities. Beginning May 13, 2019, only individuals with a Social Security Number (SSN) or International Tax Identification Number (ITIN) will be able to request an EIN.  The Read more about Change in process to obtain an EIN affects non-residents[…]

I am starting an online subscription service. Should I create an S Corp or C corporation?

Answer by Wray Rives: If you intend to seek outside investors, a C Corp is typically the way to go.  S Corp offers some tax advantages for a closely held business, but there are limitation to ownership and you cannot have more than one class of stock.  Additionally the passthrough taxation is not appealing to Read more about I am starting an online subscription service. Should I create an S Corp or C corporation?[…]

Of the U.S. states which levy sales tax, which of them hold “sales tax holidays” and when do they hold them?

Answer by Wray Rives: First it is important to know that most of the sales tax holidays are limited in their application. The majority of the holidays are promoted as a "back to school" break and are timed to occur early to mid August and apply to things like clothing and in some other cases Read more about Of the U.S. states which levy sales tax, which of them hold “sales tax holidays” and when do they hold them?[…]

How do I select a good accountant for my small business?

Answer by Wray Rives: You should be choosing an accountant for a small business based on if they are adding value to your business.  In my experience small business owners fall into two categories #1 they have a good technical skill they are able to sell or #2 they are just really good salesmen.  Rarely Read more about How do I select a good accountant for my small business?[…]

What are the advantages and disadvantages of buying LLCs for rental property?

Answer by Wray Rives: I assume you mean buying rental property in an LLC as compared to buying it as an individual. The primary advantage is the LLC will offer you some level of liability protection of your personal assets from any liabilities that may arise from the rental property. The primary disadvantages are: The Read more about What are the advantages and disadvantages of buying LLCs for rental property?[…]

Do companies have to pay taxes on money from the sale of used equipment?

Answer by Wray Rives: Yes, if the equipment is sold at a gain, then the gain is taxable. Business equipment is typically depreciated and the basis for tax purposes is the original cost less depreciation. If you sell the equipment for more than the basis, it creates a taxable gain. If you sell for less Read more about Do companies have to pay taxes on money from the sale of used equipment?[…]

What is an accounting audit? And What happens during an audit?

Answer by Wray Rives: An accounting audit is a review of a company's accounting records to determine if the financial statements of the company are accurate and fairly reflect the financial condition of the business. Most people think of audit as being when an outside accounting firm, sends people into the business to review the Read more about What is an accounting audit? And What happens during an audit?[…]

If I start my own business as a LLC, can I do a personal draw-down from my company bank account to my personal bank account as a salary?

Answer by Wray Rives: Unless you make an election to have the LLC taxed as a corporation, then you can freely move money between the LLC's bank accounts and your personal accounts any time you wish.  It is not a salary as all the income of the LLC is your personal income and is the Read more about If I start my own business as a LLC, can I do a personal draw-down from my company bank account to my personal bank account as a salary?[…]