Lanman Rayne Library

The Importance of Maintaining Corporate Records

Keeping corporate records is an important part of maintaining your corporation. Many states require that corporations keep certain records, but it is a good idea for any business, regardless of whether it is a corporation, LLC, or partnership. Every business is different and will have different record-keeping needs, but here is a list of general items that should be part of every corporate record:

New Method for claiming the IRS Home Office Deduction

Today, more and more people are making the choice to work from home. Technological advances have made it easy for people to set up home offices and high speed Internet has enabled access to virtual networks and telecommuting.

The IRS allows a tax deduction for use of a home office but until recently, the deduction has been confusing and the IRS was often suspicious of those claiming it. Even people who were rightly allowed the deduction sometimes worried about claiming it out of fear of triggering an IRS audit.

Payroll Taxes and The Trust Fund Recovery Penalty

When an employer pays his employees, he doesn’t pay the entire amount earned directly to the employee. The employer has the responsibility of withholding income tax, social security, and medicare from the employee’s paycheck. Technically this money belongs to the employee, even though these withholdings are paid to the IRS, or Treasury, instead of being paid directly to the employee.

Getting A Tax Identification Number

A key step in forming a business entity such as a Corporation, S-Corporation, LLC, Partnership, or Sole Proprietorship is obtaining a tax identification number for your new business. Also called an employer identification number or EIN, this is equivalent to a social security number for your business. Your EIN is unique to your business entity and helps the government identify your business. You will need an EIN to obtain credit, pay taxes, and open a bank account in the name of the business.

Choice of Entity: Legal Classification vs. Tax Classification

What's the difference between the legal classifications and tax classification of an entity? Two of the most important parts of creating an entity are deciding what legal type of entity to form and then selecting how that entity will be taxed. Over time I have witnessed a lot of confusion over these two pieces of the entity formation process and how the two issues are related.

Asset Protection: Real Estate

While real estate can be a great financial asset, it may come with some huge liabilities. Consider a rental property, such as a multi-unit apartment building—if a tenant is injured while residing on your property, you are one of the easiest potential targets of a lawsuit. Even without doing any type of asset search, the tenant already knows that you have at least one asset: the property you are renting to him. 

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