How much do you pay in taxes if your company is registered in Nevada but live in New York City?

Answer by Wray Rives: Mark Rigotti is correct.  Just because you register you LLC in one state does not mean that the LLC is not subject to taxes in other states as well.  It is a commonly held misconception that you can register an LLC in a relatively low tax state and avoid taxes in Read more about How much do you pay in taxes if your company is registered in Nevada but live in New York City?[…]

Why do accruals increase expenses and prepayments reduce expences when referring to change in profits in Accounting?

Answer by Wray Rives: Because when you accrue an expense you are recording an expense that you have not yet paid for, but know that you have a liability to pay in the future, so you are increasing the current period expenses for money that will be paid out in the future. Recording a pre-paid Read more about Why do accruals increase expenses and prepayments reduce expences when referring to change in profits in Accounting?[…]

I sent a 1099-MISC of $13,000 to my business partner, does the IRS deduct this from my taxes?

Answer by Wray Rives: Your first problem is as others have noted the IRS is not going to automatically adjust the tax return you filed for yourself, just because you sent them a 1099.  You will have to file an amended return. Your possible second issue may be more important, because you refer to this Read more about I sent a 1099-MISC of $13,000 to my business partner, does the IRS deduct this from my taxes?[…]

Benefits of S Corp vs sole owner for freelancing

Answer by Wray Rives: When freelancing, the primary benefit to S Corp vs sole proprietor is that you may be able to save significant self-employment taxes.  Sole proprietors pay 15.3% SE tax in addition to income tax on the net profit from their business.  S Corps pay their shareholder/owners a salary which is effectively subject Read more about Benefits of S Corp vs sole owner for freelancing[…]

Am I obligated to file an amended return if a contractor delivered a 1099-MISC to me well past the deadline and I have already filed my r…

Answer by Wray Rives: Yes you absolutely are required to amend your tax return and report the additional income.  What is reported on a 1099 does not determine what you are obligated to report on your tax return.  You should have reported all of your income, even if you received no 1099 forms. If you Read more about Am I obligated to file an amended return if a contractor delivered a 1099-MISC to me well past the deadline and I have already filed my r…[…]

Are computers, computer networks and their programming that much less complicated than US tax code?

Answer by Wray Rives: Mike Emeigh and Richard Fritzler make some very good points in their answers.  I would just add one more perspective.  In college I was required to take classes in Fortran and Basic, so I have a very rudimentary skill at computer programming and can even write a really simple program and Read more about Are computers, computer networks and their programming that much less complicated than US tax code?[…]

As a non-U.S. resident alien (citizen and resident of India), if I form a single member LLC in Delaware with no U.S. presence or U.S. sou…

Answer by Wray Rives: First I would have some questions about your situation and some of the assumptions you present. You say owners.  An LLC with multiple owners could not be a disregarded entity.  An LLC with multiple owners where one or more of the owners is not a US resident or citizen would only Read more about As a non-U.S. resident alien (citizen and resident of India), if I form a single member LLC in Delaware with no U.S. presence or U.S. sou…[…]

What are the top 3 legal tax shelters to reduce Airbnb federal tax income?

Answer by Wray Rives: My first suggestion is that you should contact a tax professional to help you with your taxes.  No offense, but from the way you phrased parts of the question, my assumption is accounting and taxes is not your primary area of expertise.  Unfortunately Turbo Tax has done a great job of Read more about What are the top 3 legal tax shelters to reduce Airbnb federal tax income?[…]

Since DOMA was struck down, can same-sex couples who were legally married in their state refile their taxes as married filed jointly?

Answer by Wray Rives: The answer is yes a same sex couple who are legally married in a state or foreign jurisdiction that allows same sex marriage can file an amended return to file as married filing jointly (MFJ) or married filing separate (MFS) as long as the 3 year statute of limitations has not Read more about Since DOMA was struck down, can same-sex couples who were legally married in their state refile their taxes as married filed jointly?[…]

My wife has never been to the US. I am currently a tax resident alien in the US. Can I claim my wife as a dependent and file my tax retur…

Answer by Wray Rives: You can file married filing jointly if you choose to treat your wife as a US resident alien for the entire tax year even though she has not resided in the US.  That means she will be taxed on foreign sourced income in the US.  So if she has no foreign Read more about My wife has never been to the US. I am currently a tax resident alien in the US. Can I claim my wife as a dependent and file my tax retur…[…]