491 plain-English guides on small business & bookkeeping, each one ending in what to do next.
Page 13 of 21, newest first.
Partnership breakups trigger mid-year income allocation, hot asset rules under IRC 751, and potential gain recognition on liquidating distributions.
Small Business & BookkeepingWhen a partnership dissolves, a partner has gain only if cash received exceeds outside basis, but IRC 751 hot asset rules can turn gain into ordinary income.
Small Business & BookkeepingA partnership is a pass-through entity that files Form 1065 and issues K-1s to partners. Formation is generally tax-free under IRC 721.
Small Business & BookkeepingPartnerships (including multi-member LLCs taxed as partnerships) are the most flexible but also the most complex business entity for tax purposes.
Small Business & BookkeepingPartnerships (including multi-member LLCs) are pass-through entities that file Form 1065 and issue Schedule K-1 to each partner.
Small Business & BookkeepingOver 30 states now offer a pass-through entity tax election that allows S-Corps and partnerships to pay state income tax at the entity level.
Small Business & BookkeepingThe pass-through entity tax (PTET) is a state-level election that allows S-Corps and partnerships to pay state income tax at the entity level instead.
Small Business & BookkeepingHow the PTET works: Without PTET (traditional approach): 1. S-Corp earns $500,000 2. Income passes through to owner on K-1 3.
Small Business & BookkeepingIRC 469 prevents taxpayers from using passive activity losses (rental properties, limited partnerships) to offset active income (W-2, business profits).
Small Business & BookkeepingPassive activity losses can only offset passive activity income, not wages or active business income. active income (the three income buckets): | Income.
Small Business & BookkeepingPassive activity losses can only offset passive activity income (IRC 469). Material participation requires 500+ hours per year.
Small Business & BookkeepingThe passive activity loss rules under IRC 469 prevent taxpayers from using losses from passive activities (businesses in which they do not materially.
Small Business & BookkeepingThe IRS classifies real estate investors into three participation levels, each with different tax treatment. Three levels of real estate participation: |.
Small Business & BookkeepingThe most common payroll mistakes are late deposits, misclassified workers, incorrect W-2s, and failure to file Form 941.
Small Business & BookkeepingEmployers must withhold federal income tax and FICA (7.65%) from employee wages, match the FICA, file Form 941 quarterly, deposit payroll taxes on time.
Small Business & BookkeepingPayroll tax compliance is the area where small businesses face the most severe penalties for errors. Payroll tax rates (2025).
Small Business & BookkeepingEmployers must deposit federal payroll taxes (income tax withholding, Social Security, Medicare) through EFTPS on a monthly or semi-weekly schedule.
Small Business & BookkeepingEmployers must withhold federal income tax and FICA from employee wages, deposit them on time, and report on Form 941 (quarterly).
Small Business & BookkeepingThe Trust Fund Recovery Penalty (TFRP) under IRC 6672 makes business owners personally liable for unpaid employee withholding taxes.
Small Business & BookkeepingSmall business owners pay both income tax and self-employment tax (or FICA). Most small business owners focus on their income tax bracket and overlook.
Small Business & BookkeepingEvery dollar of business income faces up to two federal taxes: income tax and payroll tax (also called employment tax or self-employment tax).
Small Business & BookkeepingEmployers are responsible for withholding federal income tax, Social Security tax (6.2%), and Medicare tax (1.45%) from employee wages.
Small Business & BookkeepingC-Corporations where 50% or more of stock is owned by 5 or fewer individuals and 60% or more of income is passive face a 20% personal holding company tax.
Small Business & BookkeepingThe personal holding company (PHC) tax under IRC 541 imposes a 20% penalty tax on undistributed personal holding company income.