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Corporate Opportunities

Corporate Opportunities

Does the Rule Apply to Real Estate? If you invest in and/or syndicate real estate what are the duties to your investors? You owe them a duty of loyalty. But how far does that go? The issue of corporate opportunities is important. I wrote a whole chapter on it (from...

Checkbook IRA

Checkbook IRA

A recent case has shed light on one of the riskiest retirement plan strategies put forth by promoters. In McNulty v. Commissioner (157 T.C. 10) a U.S. Tax Court brought clarity to the scheme of using self-directed IRAs for personal investments.

Piercing the Corporate Veil – How to Avoid It

Piercing the Corporate Veil – How to Avoid It

50% of piercing the veil court cases nationwide succeed because owners are failing to properly follow corporate formalities. This exposes business owners to personal liability - meaning they can lose their possessions. What is the Corporate Veil? What is the corporate...

10 Steps for Payroll Compliance

10 steps for payroll compliance

Payroll definitely requires good bookkeeping and a healthy paper trail. Whether you are hiring a bookkeeper or a bank or payroll service or not, you must make certain that all of the employee payroll-related documentation is on file. The W-4 and I-9 forms signed by employees when they’re brought on board must be on hand.

The W-2 sent to employees on wages earned or the 1099 forms sent to independent contractors for services performed for the company each year must be sent out, and a copy kept in your files.

To comply with all of the rules and regulations on payroll withholding and reporting you will need to follow the ten steps listed here:

  1. File IRS Form SS-4 to get your federal Employer Identification Number (“EIN”).
  2. With your EIN and articles of incorporation open a bank account.
  3. Get each employee an IRS Form W-4 (Employee’s Withholding Allowance Certificate) and have them fill it out. Keep this on file. (All of the IRS forms referenced here can be found at IRS.gov.)
  4. Visit your state’s employment division office, register your business and make the required unemployment insurance payments.
  5. Institute a payroll plan for making payroll tax deposits on a regular basis. Either a staff member or an outside service must be responsible for this.
  6. File the Employer’s Quarterly Federal Tax Return (Form 941) at the end of each quarter (March 31/June 30/September 30/December 31).
  7. At the end of each tax year report your federal payroll tax payments on either Form 940 or 940-EZ.
  8. At the end of each year report each employee’s annual wages and health care information to the IRS (always required) and state (if required) on Form W-2.
  9. At the end of each year file and report payments of $600 or more to each independent contractor on Form 1099-MISC.
  10. Take a deep breath. Acknowledge that while this is a lot of work every other legal business out there is going through the same thing. They are doing it. So can you.

For more information on this and other payroll compliance issues as you start your new company, please read Run Your Own Corporation.

Corporate Opportunities

Corporate Opportunities

Does the Rule Apply to Real Estate? If you invest in and/or syndicate real estate what are the duties to your investors? You owe them a duty of loyalty. But how far does that go? The issue of corporate opportunities is important. I wrote a whole chapter on it (from...

Checkbook IRA

Checkbook IRA

A recent case has shed light on one of the riskiest retirement plan strategies put forth by promoters. In McNulty v. Commissioner (157 T.C. 10) a U.S. Tax Court brought clarity to the scheme of using self-directed IRAs for personal investments.