Taxpayers commonly receive letters, sometimes known as “correspondence examinations” or “letter audits” but also referred to as “CP 2000 notices,” from the IRS demanding additional tax. For this reason, I want to talk briefly about why taxpayers receive these threatening letters and also about … [Read more...] about Responding to an Internal Revenue Service Letter Audit
Taxes
Rental Property Tax Benefits
Real estate investors typically see three types of rental property tax benefits: Benefit # 1: Depreciation Tax Deductions Federal and state income tax accounting rules allow investors to depreciate real estate improvements (such as the building) over either 27.5 years (in the case of residential … [Read more...] about Rental Property Tax Benefits
Setting Up A Washington LLC
Setting up an LLC, or limited liability company, in Washington State is extremely easy. You only need to step through a simple, online wizard (available here) or fill out and then submit a simple two page form (available here) in order to form the entity. And both the wizard and the form ask for … [Read more...] about Setting Up A Washington LLC
Accounting for Sales Taxes on Internet Sales
Historically, federal laws have prevented states from interfering with interstate commerce. Specifically, the interstate commerce clause in the U.S. constitution, statutes like P.L. 86-272 and the Supreme Court’s 1992 decision in Quill v. North Dakota, prevented some other state from making your … [Read more...] about Accounting for Sales Taxes on Internet Sales
Converting from Cash Basis Accounting to Accrual Basis Accounting
Sometimes businesses want to know how to convert from cash basis accounting to accrual basis accounting so they get more useful accounting information. Other times, as a result of tax laws, businesses may be required to figure out how to convert from cash basis accounting to accrual basis … [Read more...] about Converting from Cash Basis Accounting to Accrual Basis Accounting
Forming a Limited Liability Company: What, Why, and How
We want to provide a birds-eye view of what a limited liability company is, why you may want to form one, and then how you form one. Our experience is that many small business owners (especially new small business owners) benefit from knowing this stuff. And in many cases, real estate investors … [Read more...] about Forming a Limited Liability Company: What, Why, and How